Swiss America Blog Archive

9.12.17 - Debt Ceiling: Conservatives' Last Bullet

Gold last traded at $1,332 an ounce. Silver at $17.89 an ounce.

NEWS SUMMARY: Precious metal prices stabilized Tuesday on a flat dollar as investors digested Hurricane Irma's aftermath. U.S. stocks rose as financials got a boost from rising yields ahead of Apple's new iPhone release.

A $150 Billion Misfire: How Disaster Modelers Got Irma So Wrong -Bloomberg
"Estimates for the damage Hurricane Irma would inflict on Florida kept mounting as it made its devastating sweep across the Caribbean. It was poised to be the costliest U.S. storm on record. Then something called the Bermuda High intervened and tripped it up. 'We got very lucky,' said Jeff Masters, co-founder of Weather Underground in Ann Arbor, Michigan. If Irma had passed 20 miles west of Marco Island instead of striking it on Sunday, 'the damage would have been astronomical.'....By one estimate, the total cost dropped to about $50 billion Monday from $200 billion over the weekend....Still, when it comes to damage, Irma may bump Andrew...The most recent estimate is for $49.5 billion in Irma costs for Florida; Andrew’s were an inflation-adjusted $47.8 billion. The price tag for Hurricane Harvey, which struck southeastern Texas on Aug. 25, could end up between $65 billion to $75 billion, according to AIR Worldwide, a Verisk Analytics risk modeler based in Boston."

debt ceiling Congress Exploits Hurricane to Raise Debt Ceiling -Paul/Mises
"Former White House Chief of Staff Rahm Emanuel famously counseled politicians to never let a crisis go to waste. Sadly, this week President Trump and congressional leaders of both parties showed that they have taken this advice to heart when they attached a debt ceiling increase and an extension of government spending to the over 15 billion dollars Hurricane Harvey relief bill. This maneuver enabled Congress to avoid a contentious debate over whether to pass a clean debt ceiling increase or to pair it with spending cuts. After all, few members of Congress want to be accused of blocking a bipartisan deal to help those suffering from Harvey over what the media will spin as a 'right-wing anti-government' crusade....A refusal to raise the debt ceiling would not cause the government to default; it would simply force Congress to set spending priorities and make real spending cuts. In contrast, raising the debt ceiling allows Congress to continue to run up more debt in order to grow the government. The American people will pay for these deficits either directly through an increase in the income tax and other federal taxes, or indirectly through the inflation tax....At some point, probably sooner than most expect, this continued dollar devaluation will cause a global revolt against the dollar’s world reserve currency status. The result will be an economic crisis that could make the Great Depression seem like a mild downturn....New spending for legitimate emergencies must be paid for with spending cuts."

Conservatives' Last Bullet -Bonner/Bonner and Partners
"Today, we have 20 times as much national debt as we did when Reagan came into office. But we have only six times as much GDP. In other words, debt has increased three times faster than output. And today, instead of having debt equal to about 30% of GDP - as we had when Reagan took office - it now equals more than 100% of output. And there are hardly any old-time conservatives left. Year after year, spending increases. Most of it is more or less automatic - driven by aging Americans retiring at the rate of 10,000 per day. Each one costs the government $35,000 a year. Over the next 10 years, spending is scheduled to outstrip tax receipts by about $1 trillion a year. Bankruptcy is practically guaranteed. But conservatives always had one last-ditch weapon...That was the importance of the debt ceiling....The debt ceiling is the one and only thing that might prevent the bankruptcy of the U.S. government. It is the only ammunition fiscal conservatives (the few of them still in Congress) have left. When the going gets tough, Congress could use the debt limit to find its backbone and tighten its belt. That’s why the big spenders and Deep Staters wanted to get rid of it. Mr. Trump may shake things up after all - in a way almost no one expected. He has proposed to take away true conservatives’ last bullet."

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9.11.17 - Equifax Data Breach Gets Even Worse

Gold last traded at $1,335 an ounce. Silver at $17.90 an ounce.

NEWS SUMMARY: Precious metal prices retreated Monday on profit-taking and a firmer dollar. Stocks lifted as Hurricane Irma fears and insured damage estimates declined.

Wave Good-Bye To The Dollar’s Reserve Status -Investment Research Dynamics
"Paper Money Eventually Returns To Its Intrinsic Value -Zero" - Voltaire - "Set aside all other financial, economic and political concerns continuously shoved in our collective faces by the mainstream media. It’s a distraction - to a large degree intentional. These are the ONLY events that matter right now: this, 'China Begins To Reset The World's Currency System,' and this, 'Venezuela Is About to Ditch the Dollar in Major Blow to US: Here's Why It Matters.' Once the dollar is no longer regarded or used as the reserve currency, third-world poverty will engulf everyone in this country below the upper half percent wealth stratum…except those who possess a fair amount of physical bullion....'Money is gold and nothing else' - JP Morgan’s 1912 Congressional testimony. Trump has suggested permanently removing the Treasury debt-ceiling. The Treasury debt-ceiling is the last remaining barrier to the ability of the Fed and the Government to create an infinite amount of fiat currency....The continuous issuance of an increasing amount of credit of any type is no different that outright currency printing....Removing the debt-ceiling gives the U.S. Government, in conjunction with the Fed, the power to print an unlimited amount of Treasury notes."

data breach The Unseen Storm: It Could Put America Underwater Forever -Pontification Blog
"We have seen the devastation of Hurricanes Irma and Harvey, and this week we marked the anniversary of history-changing terrorist attacks on September 11, 2001 that destroyed America's World Trade Center towers and murdered 3,000 people. But a potentially even more destructive attack has just happened, almost unnoticed because it produced no dramatic television images. This attack struck 143 million Americans (most of whom have not yet felt it) and could put our nation underwater for years to come - perhaps even drown our personal and national economy and prosperity. Call it Financial Storm Equifax. This Atlanta-based company - one of America's three giant credit reporting agencies - announced this September that hackers had penetrated its computers and stole data for at least 10 weeks before being detected on July 29....What did Equifax do when it discovered the hack of its computers? It delayed notifying its 143 million 'customer' victims for more than a month...Equifax executives did act quickly, however, to sell at least $1.8 Million of their company stock shares before the bad news became public....People claiming to be the hackers, meanwhile, sent a dark web statement that they 'are two people trying to solve our lives and those of our families. We did not expect to get as much information as we did, nor do we want to affect any citizen.' These hackers promise to destroy the data if Equifax helps them 'monetize the information' by September 15th by paying them a mere 600 Bitcoins, a cryptocurrency - 600 of which are presently worth approximately $2.6 Million."

The size and velocity of new cyber-attacks are growing quickly. This recent attack on Equifax could be followed by attacks against the U.S. banking system, power grid and/or transportation systems. 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.

The Equifax data breach is worse than you can imagine -LA Times
"Another day, another massive data breach. Except this one involves Equifax, one of the credit-monitoring companies you might expect to be ultrasensitive to the importance of safeguarding your personal information from hackers....Firms like Equifax are much more concerned about collecting personal information than protecting it....'The fact that the breached entity (Equifax) is offering to sign consumers up for its own identity protection services strikes me as pretty rich,' security expert Brian Krebs observed on his website....The most important lesson in the Equifax breach is an old one: Consumers whose information is held by Equifax are not its customers or clients - they’re the product, and their personal information merely raw material to be exploited by the firm for its own profit. Equifax and its two major competitors in the credit-monitoring game, Experian and TransUnion, make their money by compiling detailed files on individuals and selling them to credit card firms, banks and marketers. In short, they don’t care about you, except so far as you’re an entry in their databases....Security experts recommend going beyond signing up for account monitoring services, and placing a security freeze on your credit lines. This can be done through Equifax and the other agencies, though there may be a fee. The freeze prevents anyone from opening a new credit or loan account in your name."

Trump, first lady lead moment of silence on 9/11 anniversary -TheHill
"President Trump and first lady Melania Trump Monday led a moment of silence from the White House on the 16th anniversary of the September 11 attacks. It is the first anniversary of the attacks since Trump became president. The moment of silence was observed at 8:46 a.m., the time the first plane struck the World Trade Center's North Tower. Trump will also take part in the observance of Sept. 11 at the Pentagon."

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9.8.17 - Cyber-attack Hits 50% of Americans

Gold last traded at $1,351 an ounce. Silver at $18.12 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 1-year highs Friday as investors sought safe harbors from the approaching storms. U.S. stocks headed for a weekly loss as insurance stocks declined on hurricane Irma risk.

Dollar Deepens Dive as Caution on Currency Grows -Wall Street Journal
"The dollar was hit by fresh selling in Asian trading Friday, a day after notching a 2½-year low, as reasons for caution on the currency continued to mount. The Wall Street Journal Dollar Index was off 0.4% in Asia to 84.38, putting it down 9.2% for the year....A litany of factors is putting fresh pressure on the dollar. Doubts that the Federal Reserve has the firepower, or the will, to raise interest rates again this year, given soft inflation, only grew when the country’s fourth-largest city was flooded by a massive hurricane - and with the prospect of an even-stronger storm cutting through the length of Florida, the country's third-biggest state by population....Haven moves are also at play, with rallies in gold and government debt. Gold is at its highest level in a year, topping $1,350 a troy ounce, while there has been broad buying of global sovereign debt in recent days....'The dollar can't find any loving at the moment,' said Rodrigo Catril, a foreign-exchange strategist at National Australia Bank in Sydney. Given the unresolved fiscal issues in the U.S. - debt-ceiling measures 'kicked down the road again' - and political wrangling between President Trump and his own party, he adds, it isn’t hard to understand why."

Hurricane Season Investors are bailing on insurers -CNBC
"Investors are ditching insurance stocks as Hurricane Irma pounds the Caribbean, even though industry leaders say companies will be able to handle the financial impact. 'There is an abundance of capital,' said Steve Bowen, chief meteorologist at Aon, one of the few insurers whose shares haven't taken a beating during hurricane season. 'The industry should be able to absorb the losses from not just what Irma ends up causing, but what we saw last week from Hurricane Harvey.'....Nevertheless, investors are heading for the exits....Given Irma's Category 4 status, investor jitters are to be expected. Credit Suisse already has estimated that the insured losses could hit $125 billion or more, making Irma easily the costliest hurricane in U.S. history....'Florida insurers are well-capitalized, but I think you might see more of an impact on the reinsurance world instead of the private world,' said Howard Mills, global insurance regulatory leader at Deloitte....For Mills, the situation gets scarier when realizing that the worst could be yet to come. 'This is really worrying that we're still very early in the hurricane season,' he said. 'The industry's got to be prepared and has to assume there will be more losses to come.'"

Gold Rallies to a One-Year High and Spurs Record Trading Volume -Bloomberg
"Gold has pulled in traders like never before on its way to the highest price in a year. Volume on the Comex in New York, the largest bullion futures exchange, hit a record in August as North Korean tensions and a weaker dollar boosted demand for the metal. Some 6.55 million contracts - worth almost $900 billion now - changed hands last month, more than when Donald Trump was elected U.S. president or during substantial price spikes and slumps....Inflows were back with a vengeance the first week after the summer break as investors piled into everything from gold and government bonds to equities and high-yield credit. Global funds that invest in gold, equities and bonds netted inflows of $11.6 billion for the week ended Sept. 7, Bank of America Merrill Lynch said in a research report, citing EPFR Global data. Precious-metal funds added the most in 30 weeks, while bond portfolios posted a 25th straight week of inflows."

Equifax Says Cyberattack May Have Affected 143 Million Customers -New York Times
"Equifax, one of the three major consumer credit reporting agencies, said on Thursday that hackers had gained access to company data that potentially compromised sensitive information for 143 million American consumers, including Social Security numbers and driver’s license numbers. The attack on the company represents one of the largest risks to personally sensitive information in recent years, and is the third major cybersecurity threat for the agency since 2015....'This is about as bad as it gets,' said Pamela Dixon, executive director of the World Privacy Forum, a nonprofit research group. 'If you have a credit report, chances are you may be in this breach. The chances are much better than 50 percent.'....Credit card numbers for 209,000 consumers were stolen, while documents with personal information used in disputes for 182,000 people were also taken....'On a scale of 1 to 10 in terms of risk to consumers, this is a 10,' said Avivah Litan, a fraud analyst at Gartner....Using the data stolen from Equifax, identity thieves can impersonate people with lenders, creditors and service providers, who rely on personal identity information from Equifax to make financial decisions regarding potential customers."

Sunday is Grandparents Day; Why We Celebrate -Refinery29
"This Sunday, September 10, you're encouraged to call up your grandfather or make a lunch date with your grandma. But, in the original spirit of Grandparents Day, you could spend the day with any elderly person who's made an impact on your life. In 1970, Marian McQuade, a mother of 15 from West Virginia, set out to raise awareness for elderly nursing home residents. Fearing that these people were missing out on important family bonding due to their need for intensive care, she petitioned the government for an official day of observance. Campaigning on a message that we have a lot to learn from the entire elderly community, McQuade first established Grandparents Day as a statewide holiday in West Virginia, with the help of local officials and community leaders. By 1978, President Jimmy Carter declared it a national holiday, urging 'each citizen to pause and to reflect on the influence his grandparents have had in shaping his own destiny.'....In keeping with McQuade's belief that the elderly mustn't be forgotten, you can 'adopt' a grandparent and spend the day with a nursing home resident who might not have grandchildren of their own."

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9.7.17 - Will Trump Reshape The Fed?

Gold last traded at $1,350 an ounce. Silver at $18.11 an ounce.

NEWS SUMMARY: Precious metal prices rushed to one-year highs Thursday on safe-haven buying and dollar weakness. U.S. stocks slipped on rising unemployment and falling bank stocks.

Gold hits one-year peak as dollar drops on weak U.S. jobs data -Reuters
"The price of gold rose to a one-year peak on Thursday after the dollar tumbled on the back of weak U.S. jobs data and an unchanged growth and inflation outlook from the European Central Bank....The number of Americans filing for unemployment benefits jumped to its highest level in more than two years last week amid a surge in applications in hurricane-ravaged Texas....'The weaker U.S. economic data pushed the odds for a rate hike to ground. Clearly the Fed cannot be comfortable with weaker job market and the fact is that worse is still yet to come,' said Naeem Aslam, chief market analyst at Think Markets....'Geopolitical tensions remain elevated surrounding North Korea, so I'd expect that would keep gold pretty well supported in the short term and in the week ahead,' said Jonathan Butler, commodities analyst at Mitsubishi in London."

gold 401k To 'Pay' For Tax Reform, Congress May Tax Retirement Savings -Real Clear Markets
"Top Administration officials are considering taxing deposits into 401(k) savings plans up front. The short-term fiscal benefit to the tax collector would be significant. But the cost to the economy could be enormous. Taxpayers have been taking advantage of 401(k)s to save for retirement since 1981. It was an unintended consequence of a law enacted three years earlier to allow taxpayers a break on taxes on deferred income, and its impact has been tremendous: As of March of this year, 401(k) plans held $5 trillion in assets on behalf of about 55 million active participants and millions of retirees. Trillions have poured into markets, providing ready access to capital, deeper, more liquid markets, and a more secure retirement for millions at a time of rising life expectancy and falling birthrates....Treasury and White House advisors may think they have discovered a potential windfall in tax revenue. But a Joint Economic Committee study determined there is a bigger pot of gold at the end of the rainbow than the beginning, concluding that deferring taxes on a mutual fund's capital gain ultimately increases federal government revenue by producing larger account balances and higher tax revenues when sold. In other words, taxing 401(k)s at the front end will result in more short-term pain for the taxpayer, and less long-term gain for the tax collector."

Another Landmine on the Path to Tax Reform -Bonner/Bonner And Partners
"Yesterday, the Dow fell 234 points - or roughly 1%. No big deal. Commentators said investors were worried about disasters - both natural and man-made....Curiously, the natural disaster may help delay the man-made kind. Congress was setting up for a bloody fight on the debt ceiling increase. Now, according to this morning's headlines, it may be able to slip the debt ceiling increase into the pocket of a bill to provide disaster relief to the Texas coast....The debt ceiling will be raised one way or another. This is an economy and a government that live on credit. Since the bottom of the 2008 financial crisis, federal debt has increased five times faster than the economy that supports it. And stock prices have been going up 10 times as fast. There is no way the Deep State would ever allow its credit to be cut off....Stocks measure not today's values… but tomorrow's. If investors pay record prices today, they must see an even brighter future tomorrow. But where? How? We squint. We put on our glasses. Try as we might, we can't see it. What we see is a polished floor, with marbles scattered all over it. And there, coming in the front door, with big feet and a small head, is Mr. Government....When the flat feet find the round marbles - watch out."

Here’s How Trump Can Reshape the Fed -Bloomberg
"Stanley Fischer's surprise early exit from the Federal Reserve makes President Donald Trump's biggest economic decision of the next few months even starker: whether to preserve continuity at the top of the nation’s central bank - or not. Chair Janet Yellen's term expires in February, and her reappointment hasn’t been seen as likely. Fischer, the vice chairman, announced Wednesday he will leave the Fed in October. Both are former economics professors and longtime central bank officials....Previous presidents have gone for continuity in Fed appointments because it usually pays a big dividend: stable financial markets. If confidence in the Fed is lost, falling stock and bond prices can exert a massive penalty on White House popularity and the economy....'Trump is obviously unpredictable. He has run his whole campaign and presidency as flying in the face of past practices,' said Mark Spindel, co-author of a new book on the Fed titled The Myth of Independence. 'But maybe he understands something about interest rates.'....Yellen is Trump’s most obvious continuity choice. However, he has also mentioned that he is considering Gary Cohn - his top White House economic adviser, and a former Goldman Sachs Group Inc. president - for the job."

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9.6.17 - One Nation Under Gold

Gold last traded at $1,333 an ounce. Silver at $17.88 an ounce.

Precious metal prices steadied near one-year highs Wednesday on rising uncertainty and a falling dollar. U.S. stocks were lifted by investor hopes that a debt ceiling shutdown might be avoided.

12 Reasons Gold Is Better Than Bitcoin -Forbes
"The world has gone wild for the cryptocurrency known as Bitcoin. One Bitcoin would set you back $4,425 at the time of writing. That's up from less than $600 a year ago, according to CoinBase. But a word of caution: Gold is still a better bet for anyone who wants to own a time-tested asset. Here's why: 1) Gold has a 5,000-year history as a long-term store of wealth. 2) There is always a ready and liquid market for gold. 3) Gold can protect you from nuclear gamma radiation. 4) Gold is safer. 5) You can wear gold as jewelry. 6) Gold is a superb electrical conductor. 7) Gold has never been out of fashion. 8) You don't need a web connection to use your gold. 9) Gold never tarnishes. 10) Gold is an aphrodisiac. 11) Bitcoin is clearly in a speculative bubble. 12) 'Bitcoin is still experimental,' according to Not so much for gold."

ONUG Book Review: James Ledbetter's 'One Nation Under Gold' -Benko/Forbes
"James Ledbetter, the editor of Inc. magazine, recently published a weird and wonderful book, One Nation Under Gold: How One Precious Metal Has Dominated the American Imagination For Four Centuries.....The book is wildly entertaining as well as informative....Ledbetter has written a delightful book, one that succeeds in capturing, among other things, much of the loopiness that has undeservedly tarnished the reputation of the true gold standard....Ledbetter: 'It is almost impossible to overstate the dislike that most of the Founding Fathers, and indeed most of the American ruling class, had for paper money in the late eighteenth and early nineteenth century. The currencies issued by most states depreciated to the point of being worthless.' That depreciation left an indelible impression....One Nation Under Gold then takes us through deeply interesting stories of FDR's policies toward gold: the revaluation of the dollar from $20.67/oz to $35/oz, the indefensible forced expropriation of gold, and the prohibition of private ownership (outside of jewelry and coin collections). The story as he tells it is fascinating, and useful, if not always quite as 'sound as a dollar.'....Ledbetter's account of how it became legal again for Americans to own gold, under President Ford, is a treasure. This is great reporting. He properly gives credit to Senator Jesse Helms for this small but important triumph....One Nation Under Gold is a must-read book for anyone with even modest interest in the gold standard, in gold, or simply in the human comedy."

Antifa and a North Korean Nuclear Winter -Pontification Blog
"The latest North Korean blast was, by one estimate, up to 10 times bigger than the atomic bomb that destroyed Hiroshima. Worse, this weapon may have been not only an atomic fission device but also a hydrogen-fusion explosive, an H-bomb small enough to be carried by an intercontinental ballistic missile....We have centralized our power and population in large cities and systems, like the banks that hold our bank accounts merely as electronic blips in giant computers. A nuclear blast would emit an electromagnetic pulse (EMP) that could fry our computer chips, blind military offensive and defensive systems, erase our banking records and economy, and return us to being a near-Stone Age country in a heartbeat....North Korea's technological threat of possessing an EMP weapon is clear, as Craig R. Smith and I show in our books Don't Bank On It! and The Great Debasement. But even more frightening, as we explore in Money, Morality & The Machine, is that our welfare state and deficit spending have destroyed honest money, self-reliance, and the values, morality and patriotism of millions of our government-addicted fellow Americans." Full story

People Over 60 More Content In Life Than All Other Adults -Survey Finds
"Is life in and of itself like a fine wine, that is, does it get better with age? While many of us fear what's to come in our elder years, a new survey finds that most older adults are actually more content than their younger or middle-aged counterparts. Researchers at AARP conducted a survey with over 2,600 young (i.e., aged 18 to 39), mid-aged (40 to 59), and older respondents (those 60-plus) to gauge attitudes on the phenomenon of aging. Forty-seven percent of the younger group expressed that it's 'normal to be depressed when you are old,' while only about 10 percent of those aged 60 or older said that one's elderly years are truly a 'depressing stage of life.' Overall, 67 percent of older respondents reported being 'satisfied' or 'very satisfied' with their life, compared to only 61 percent of those aged 18 to 39 and 60 percent of those aged 40 to 59. Perhaps 60 really is the new 30....All in all, the survey's main takeaway may be that fear of getting older is just an antiquated thought."

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9.5.17 - Will 'Petroyuans' Kill 'Petrodollars'?

Gold last traded at $1,338 an ounce. Silver at $17.87 an ounce.

NEWS SUMMARY: Precious metal prices hovered near one-year highs Monday on geopolitical worries and a weaker dollar. U.S. stocks fell sharply as tension between North Korea and the West sent shivers down investors' spines.

China Begins To Reset The World's Reserve Currency System -Investment Research Dynamics
"A report released by the Nikkei Asian Review indicates that China is prepared to release a yuan-denominated oil futures contract that is convertible (backed by) physical gold. The contract will enable China's largest oil suppliers to settle oil sales in yuan, rather than in dollars, and then convert the yuan into gold on exchanges in Hong Kong and Shanghai....Since 1973, OPEC oil has been quoted and traded using to U.S. dollars, otherwise known as 'petrodollars.' The 'recycling' of petrodollars into U.S. Treasuries has been the life-blood of the U.S. economic and political system. In addition to reducing a major source of funding for the the U.S. Government’s enormous deficit spending, the introduction of a gold-backed yuan oil futures contract is an important step toward removing the dollar as the world's reserve currency. More significantly it reintroduces gold into the global monetary system. While the new gold-backed 'petroyuan' will allow oil producers to sell oil for gold rather than Treasuries. It's a strategic step toward not only ridding the world of its dependence on dollars, but also of reducing the ability of the U.S. to exert global economic and financially tyranny. I would also argue that it’s one of the primary reasons behind the inability of the western Central Banks to drive the price of gold lower recently."


The American Spirit Is Alive in Texas -Noonan/Wall Street Journal
"Give Texas what it needs. It has endured a disaster without precedent. Washington must move quickly, generously....This is an emergency. This is no time to threaten government shutdowns. It's no time to be dilating on debt ceilings. This is the time to know as never before that everything that holds us together as a nation must be strengthened wherever possible, and whatever sinks us in rancor avoided and shunned....When the trauma is over, there'll be plenty of time for debate. Do we need to hold more in reserve for national disasters? Do local zoning laws need rethinking? All worthy questions - for later. There is such a thing as tact. It has to do with a sense of touch - an ability to apprehend another's position or circumstances, and doing or saying the right thing....Politicians, don't use this disaster to score points or rub your ideology in somebody's face or make your donors smile by being small, not big. Give Texas what it needs. Keep the government up and running. Don't even consider doing otherwise....We are a great nation. We forget. But what happened in Texas reminded us. It said: My beloved America you’re not a mirage, you're still here."

Will Cryptocurrency Crackdown Spark a Rush to Gold? -Bloomberg
"Mark Mobius is sensing danger in the explosive growth of cryptocurrencies. Governments will begin clamping down on digital currencies because of their use in illicit financing, with terrorist groups to drug dealers contributing to their rise, Mobius, executive chairman at Templeton Emerging Markets Group, said in an interview in Hong Kong Monday. 'Cryptocurrencies are beginning to get out of control and it's going to attract the attention of governments around the world,' Mobius said. 'You're going to get a reversion back to gold because people are going to wonder, can I really trust these currencies?' And the crackdown may have already started - at least in China, home to the majority of bitcoin miners. The People's Bank of China said Monday that initial coin offerings are illegal and that all related fundraising activity should be halted immediately....Bitcoin fell more than 10 percent on Monday, after news of the PBOC curbs."

The Looming Fight Over 'Tax Reform,' Explained-CNBC
"An overhaul of the tax code would, Trump promised, 'bring back Main Street by reducing the crumbling burden on our companies and on our workers.' Meanwhile, Paul Ryan's been touring the nation waiving around a vaguely postcard-shaped piece of paper that he believes Americans will be able to use to file their taxes once the simplification nirvana of tax reform is enacted. Congress is facing a crowded September full of 'must pass' bills to keep the government open, replenish FEMA's Harvey-depleted coffers, and avoid a debt ceiling crisis. But when those deadlines are in the rearview mirror, tax reform is the next Republican policy priority....This basic 'reform' process of lowering tax rates while broadening the tax base could, in theory, be applied only to corporate income taxes or only to individual income taxes or to both simultaneously."

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9.1.17 - August: Ugly Jobs & Wage Report

Gold last traded at $1,330 an ounce. Silver at $17.81 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on momentum buying despite a firmer dollar. U.S. stocks rose following a weaker-than-expected jobs report on the likelihood the Fed will postpone projected interest rate hikes.

Gold Is Hot: The Real Deal or Fool’s Rally? -Barrons
"Gold has been on a tear since early July, rising from roughly $1,200 per troy ounce to and through chart resistance at $1,300....Most of the time, gold and the dollar move in opposite directions because gold is priced in dollars. The weaker the greenback, the stronger the metal with all else being held constant....Last week, the dollar did not react well to Fed Chair Janet Yellen’s remarks at Jackson Hole. The market took her lack of concrete language as being dovish, and the dollar dipped below very important long-term chart support....Gold bugs also cite tensions with North Korea as reason to shift money into safe-haven assets such as gold and U.S. Treasuries. When that country fired a missile over Japan overnight Monday, it caused the dollar to drop and gold to soar....The key will be whether the dollar can maintain its new-found strength. If it gives up recent gains then I will have to admit defeat on gold and look for $1,400 as the next stop."

Macro Winds Fill Gold's Sails -Market Anthropology
"While the perennial skeptics popped their heads out earlier in the week to again profess their disbelief in gold’s performance, supportive macro conditions behind the nascent and discreet bull market in precious metals continue to advance. Although contempt for gold still remains with a deep scar from the long cyclical bear market in the face of what was perceived by many as exceedingly beneficial market conditions, i.e. massive QE, the precious metals sector has outperformed the S&P 500 since their respective cycle lows in late Q4 2015."

gold chart

"Precious metals have strongly outperformed as the US dollar index made its way back down to the lows from last year. With the dollar index breaking through those lows on Monday, gold took notice and broke above its yearly range and beyond $1300/oz....All things considered, the backdrop for fresh cycle highs in gold this month looks very encouraging."

Watch Out: The Weak Dollar Gives Shareholders Money Illusion -Wall Street Journal
"The S&P 500 is up 10%, bringing happy feelings to those who peek at their 401(k) plans. At the same time, the dollar has plunged 8.4% against other major currencies. American investors might be tempted to shrug their shoulders, at least those not planning a foreign holiday, and think about the dollar only in terms of its relatively minor economic impact. That would be the wrong approach, as their cousins in London quickly learned. The dollar has been of vital importance to stock prices this year, and provides a better explanation for the S&P’s rise than other positive factors such as low interest rates, economic growth or the recovery in earnings....This should leave U.S. investors pondering two big questions: Will the dollar remain so important to company performance, and if it does, is the greenback going further down or will it recover?....History suggests the dollar will continue to matter hugely to individual company performance."

Ugly Jobs Report: August Payrolls Miss, Slide To 156K; Hourly Earnings Also Disappoint -Zero Hedge
"The BLS reported that in August just 156K jobs were created, a big miss to the 180K expected, and following a sharp downward revision to June and July, which were revised to 210K and 189K, respectively, a 41K drop combined. But don't worry, the more disappointing the economic data, the less likely the Fed will hike in September, December, or ever for that matter. And keep in mind, today's data did not include the Harvey devastation, which will assure no rate hikes from the Fed for months, if not decades to come....The unemployment rate also disappointed, rising from 4.3% to 4.4%, while the avg hourly earnings missed, increasing by 2.5% Y/Y in August, below the 2.6% estimate and the same as July....While the labor force participation rate remained unchanged at 62.9%, the number of Americans not in the labor force increased once again, growing by 128K in August to 94.785 million."

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8.31.17 - Home Buyers 'Fight Over Scraps'

Gold last traded at $1,322 an ounce. Silver at $17.57 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying and a flat dollar. Gold is on track to end August 3.5% higher with a 15% gain YTD. U.S. stocks inched higher as investors digested economic data with the major indexes ending the month flat.

Gold Is Winning New Fans -Bloomberg
"After nosing above $1,300, gold is winning new fans as tepid U.S. inflation anchors Federal Reserve policy and President Donald Trump’s growth agenda risks running into the sand. The metal should trade above that level in 2018 as the dollar weakens and the Fed sticks to just two rate hikes, in December 2017 and then March, according to Luc Luyet, a currency strategist at Pictet Wealth Management, a unit of the Pictet Group, which managed $500 billion as of the end of June. 'The dollar should be penalized next year by the weaker growth outlook and by the less active Fed, so we would expect the dollar to gradually weaken and that should support gold,' Geneva-based Luyet said in an interview this week....Other bulls include billionaire Ray Dalio, who leads the world’s largest hedge fund at Bridgewater Associates, recommends investors place as much as 10 percent of their assets in gold as a hedge against political and economic risks. Bullion could rise to $1,400 by early next year, buoyed by lower long-term U.S. interest rates and lack of progress by Trump in delivering economic reform, according to Bank of America Merrill Lynch."

Yes, gold is gaining new fans daily as the reality of life's uncertainties dominates the daily news. Highly respected market analyst Louise Yamada told Bloomberg news this week she believes gold is headed to $1,400 an ounce this year. We agree. Watch AMTV host Christopher Greene explain why personal preparedness for both natural and financial disasters is so vital right now.

home prices The return of the high-risk mortgage -Financial Times/CNBC
"As a veteran underwriter of subprime mortgages, Dan Perl had seen enough by April 2007 to know that there was serious trouble ahead....But now he is back in the game, leading a small band of lenders making subprime loans once more. Or 'nonprime', as they prefer to call it these days. For every comfortably off professional who could walk into a branch of Chase or Wells Fargo and get a home loan without any fuss, they argue, there are many more who would struggle. People who are self-employed or on variable incomes, for example, may not check all the boxes a big bank needs. Ditto new immigrants with thin credit histories, or people with a few scratches and dents in their files. 'Making credit available to borrowers who are subprime is national policy and it is an important part of economic growth,' says Julian Hebron, head of sales at RPM Mortgage in Alamo, California. But what's worrying some economists is a feeling that we're on a slippery slope; that the same forces which fed the crisis last time round - rampant demand for yield among investors, skewed incentives on Wall Street and a government determined to relax regulatory restraints - could feed another....Fitch, the credit rating agency, expects $3bn of issuance of nonprime mortgage-backed securities (MBS) this year, up from about $1bn over the previous 18 months."

Buyers 'fight over scraps' in ever-pricier housing -CNBC
"Not only are home prices continuing to rise, but the gains are accelerating. Couple that with record-low supply of homes for sale, and you would think demand would fall off. So far, it has not. Bidding wars are to be expected with most offers, especially in larger metropolitan areas and their suburbs. 'It's a new normal in the housing market,' wrote Cheryl Young, senior economist at Trulia, in a response to new price reports. 'Ever rising prices being met by insatiable demand.' The supply of homes for sale at the end of July was 9 percent lower compared with July of 2016, according to the National Association of Realtors. Homes are selling faster and faster each month, especially those on the lower end of the market where supply is lowest and where demand from first-time buyers is very high....New single-family homes priced between $200,000 and $250,000 were the fastest-growing segment for homebuilders in the second quarter of this year...Existing home sales were down 1.3% in July."

A Decade of Central Bank Collusion -NomiPrins
"Since the global financial crisis, the biggest G7 winners have been the Big Six US banks that profited from access to cheap money. They benefited from central bank purchases of their securities that exaggerated the value of the remaining securities on their books. They used 'printed' or electronically crafted money to stockpile cash and fund buybacks of their own shares and pay themselves dividends on those shares. By producing and distributing artificial money, central bankers distorted reality in global markets. Multi-national banks were co-conspirators in that maneuver....As we approach the ninth anniversary of the collapse of one of my former employers, Lehman Brothers, and the 10th anniversary of the beginning of central bank collusion into the financial crisis, there has been - no change - in global G7 central bank monetary policy....Big US banks are bigger than before the crisis. They float atop a life-raft, among other things, of $4.5 trillion Fed asset book, as part of a total $14 trillion G7 central bank asset book....Take the composite of all that and what are you left with? Ongoing G7 central bank monetary policy collusion, zero percent interest rates globally, unlimited QE potential, and major asset bubbles."

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8.30.17 - Bear-Market Signals Multiplying

Gold last traded at $1,314 an ounce. Silver at $17.50 an ounce.

NEWS SUMMARY: Precious metal prices eased back Wednesday on mild profit-taking and a firmer dollar. U.S. stocks rose on upbeat GDP and jobs data as tech giant Apple's stock hit a record high.

US revised second-quarter GDP up 3.0% vs 2.7% rise expected -CNBC
"Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said in its second estimate on Wednesday. The upward revision from the 2.6 percent pace reported last month reflected robust consumer spending as well as strong business investment. Growth last quarter was the strongest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists had expected that second-quarter GDP growth would be raised to a 2.7 percent rate....With GDP quickening in the second quarter, the economy grew 2.1 percent in the first half of 2017. That was up from the 1.9 percent reported last month. Republican President Donald Trump has set an ambitious 3.0 percent growth target for 2017, to be achieved through a mix of tax cuts, deregulation and infrastructure spending....Consumer spending, which makes up more than two-thirds of the U.S. economy, grew at a 3.3 percent rate, but stronger consumer spending came at the expense of saving amid sluggish wage gains. The saving rate slipped to 3.7 percent from 3.9 percent in the first quarter."

gold Did North Korea Just Trigger $1,900 Gold Prices? -The Street
"Gold enjoyed its best day of the year Monday, gaining more than $27 and moving decisively over the $1,300 mark. This impressive advance over the $1,300 level should signal a major breakout to the upside as the gold market heads into the seasonally favorable fall months. Market consensus for the climb is the latest missile launch by North Korea over Japan. While this may explain the short-term catalyst, gold's fundamentals have been in place for some time to support a move of this sort. There are several fundamental factors in place, which will continue to support gold's move substantially higher. The first is uncertainty. Gold's value as sound money comes into focus most clearly in times of political and economic uncertainty....Gold is also moving higher as the dollar continues to weaken. This trend has been in place for almost a year now and shows no signs of abating....Global monetary moves away from the dollar by major trading blocs, from the Chinese and Russians to the European Central Bank, also support gold and diminish the dollar....Finally, interest rates are always a major driver of gold prices. Low real rates support gold as investors choose to leave riskier monetary instruments when they are not being paid to hold them through higher rates....Enjoy the ride. It should be a long and fruitful one."

From Stocks to Bonds, the Bear-Market Signals Are Multiplying -Bloomberg
"Risks are stacking up for markets attempting to recover from the latest provocation by North Korea and the mounting damage of Tropical Storm Harvey. Citigroup Inc. strategists including Jeremy Hale cite 'worrying developments' that may signal the approach of a correction in stocks, while Commerzbank AG finds growing evidence of bearish sentiment in bond funds. Here are some of the red flags: The pairwise correlations between the S&P 500 and its industry sectors have fallen near levels that preceded the last two bear markets, according to the Citigroup strategists....Underperforming transport stocks are another concern....Fund flows show bond investors are also shunning risk."

In our free CRISIS TIMELINE report we explain why a growing number of bear-market signals and cyclical economic risk factors are all converging within the next 24 months. Don't wait to prepare; prepare and then wait.

Will the Dollar Stay Dominant? -New Yorker
"'Banknotes depend on confidence,' Larry Felix, the former director of the Bureau of Engraving and Printing, told me. (Our paper bills are called banknotes because they are, technically, promissory notes - formal I.O.U.s - issued by the Federal Reserve.) 'You accept a banknote because you figure the person you will hand it to will also accept it.' This is the essential circular mystery of money: its value comes from each of us believing that everybody else will continue to believe in its value....This basic faith in currency has collapsed in other countries, most famously in Weimar Germany and, more recently, in Zimbabwe, Iraq, and Brazil....Yet the dollar emerged dominant, showing that a currency doesn’t have to be great to be trusted - it just has to be the least bad. (Wall Street traders refer to the dollar as 'the cleanest dirty shirt.')"

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8.29.17 - Money Isn't a Gift from the State

Gold last traded at $1,318 an ounce. Silver at $17.51 an ounce.

NEWS SUMMARY: Precious metal prices spiked near 10-month highs Tuesday on safe-haven buying amid rising geopolitical fears. U.S. stocks traded mixed as investors digest the North Korea threat and financial impact of Hurricane Harvey.

Most Harvey flood victims uninsured, face big bills alone -Associated Press
"Homeowners suffering flood damage from Harvey are more likely to be on the hook for losses than victims of prior storms - a potentially crushing blow to personal finances and neighborhoods along the Gulf Coast. Insurance experts say only a small fraction of homeowners in Harvey's path of destruction have flood insurance. That means families with flooded basements, soaked furniture and water-damaged walls will have to dig deep into their pockets or take on more debt to fix up their homes. Some may be forced to sell, if they can, and leave their communities. 'All these people taken out in boats, they have a second problem: They have no insurance,' said Robert Hunter, director of insurance at the Consumer Federation of America....With Harvey, only two of 10 homeowners have coverage, Hunter estimates....'There's going to be a huge uninsured economic loss here,' said Pete Mills, a senior vice president at the Mortgage Bankers Association."

Texas Three Financial Lessons from Hurricane Harvey -Daily Reckoning
"As our nation sits riveted to the massive storm Mother Nature has served up, I’m reminded of the danger of an economic storm on the horizon. Today, I want to share three key takeaways from Hurricane Harvey… takeaways that could go a long way towards protecting your wealth from a stock market hurricane…Takeaway #1: Research & Understand the Risks....Traditional investors are infatuated with stocks like the FANG group (Facebook, Amazon, Netflix and Google), and they’re also willing to put massive amounts of capital into index funds - regardless of the price. This leaves many popular stocks over-priced and vulnerable to a sharp decline. If you understand these risks, you’re much more likely to have a plan to avoid losing money when the next economic storm hits....Takeaway #2: Have a Plan, and EXECUTE that Plan...It takes a lot of discipline to sell overpriced stocks even when they continue to move higher… or to buy precious metals and other 'safe' investments even when they are out of favor....Over the past few months, we’ve been talking a lot about avoiding inflated stocks, and investing in resources like gold and silver. Hopefully you’ve already taken action. Takeaway #3: Selling Insurance is Most Profitable AFTER a Storm....After a storm has hit, people are more likely to recognize the need for insurance, and make the decision to buy protection....If gold prices spike sharply higher, you can sell some of your gold to lock in an excellent profit."

Gold Extends Rally to 2017 High -Bloomberg
"Gold rose to the highest this year after North Korea fired a ballistic missile over Japan, boosting haven demand and extending a rally fueled by declines in the dollar. An index of precious-metals mining stocks touched a four-month high. The greenback fell for a third day to its lowest since January 2015 and stocks slumped around the world as North Korea’s ballistic missile test rattled markets. 'Gold prices have rallied to their highest level since U.S. elections' in November, analysts at Goldman Sachs Group Inc. including Abhinandan Agarwal said in a note to clients. 'Expect precious-metal stocks to outperform today.'....Gold has surged 15 percent this investors weigh the possibility of conflict in Asia, with Kim Jong Un’s regime pushing on with missile tests....Prices have also climbed as the Federal Reserve is expected to go slow on further interest-rate increases. Low rates are a boon to non-interest-bearing precious metals....Demand for haven assets also rose as Wall Street and Washington braced for the repercussions of Tropical Storm Harvey in Houston, expected to be the costliest U.S. natural disaster since Hurricane Sandy in 2012."

Money Isn't a Gift from the State -White/FEE
"I’ve begun working on a new book on the gold standard. In the first chapter I plan to discuss the origin of money, as a preliminary to discussing how silver and gold became the world’s dominant commodity monies. The topic of the origin of money has become controversial in recent years. The dominant view among economists (for good reason), suggested by Adam Smith in the eighteenth century and fleshed out by Carl Menger in the nineteenth, is that money is a market-born institution....But this view has lately been challenged by a resurgence of the 'state theory of money,' also known as Cartalism, which argues that governments played an essential role in the establishment of money....As textbooks during the nineteenth century emphasized, the precious metals have a number of properties that make them superior media of exchange...silver and gold score high on (1) portability or preciousness, allowing you to carry around high purchasing power with little bulk; (2) durability, not spoiling between the date of acquisition and a later date of spending; (3) divisible and fusible, like any metal, allowing pieces to be made in a range of sizes to suit a range of transactions, and allowing small change to be given; (4) stable in value across the seasons, unlike foodstuffs that are cheap right after the harvest but dear six months later. These properties enhance their widespread acceptance....Once sovereigns monopolized the mints they took advantage of the propaganda value of stamping their own faces on the coins, of course. But as far as we know coins were already in use among merchants before that happened."

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8.28.17 - A Global Middle Class Uprising

Gold last traded at $1,315. Silver at $17.52 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Monday, with gold prices touching 10-month highs, on safe haven buying and a weaker dollar. U.S. stocks fell on rising economic uncertainty after Hurricane Harvey devastated the greater Houston area.

Gold hits $1,300/oz. after central bankers' comments -Reuters
"Gold rose to its highest in more than a week on Monday as the dollar weakened and the euro powered ahead after the head of the European Central Bank refrained from talking down the single currency at a meeting of central bankers. At the meeting in Jackson Hole, Wyoming, the ECB's Mario Draghi said the bank's ultra-loose monetary policy was working and the euro zone's economic recovery had taken hold, refraining from commenting on the euro's recent strength. That pushed the euro to its highest in more than 2-1/2 years against the U.S. dollar, while the dollar index fell to its lowest since May 2016....At Jackson Hole, U.S. Federal Reserve Chair Janet Yellen made no reference to U.S. monetary policy but instead focused on financial regulations, leading traders to expect interest rates to be raised more slowly."

gold Buy Gold As Washington "Stumbles" Advise Blackrock -Zero Hedge
"Not for the first time this year, Blackrock's Koesterich has spoken about his faith in gold during times of both financial and political instability. Those times are now, the world's largest money manager believes. Since the beginning of the year Koestrich has been adding to the gold position of the $39bn Global Allocation Fund. Gold is now the fund's second-largest position. Koesterich said earlier this month, 'There has been a Pavlovian response by investors to disregard any piece of bad news or any spike in volatility, and that has been a very profitable strategy but we do think that there are risks in the world that are not being priced in.' Currently there is heightened geopolitical risk across the world, with a focus on how the US will manage....Koesterich does not claim to 'have any special insight into the Greek drama that is modern day Washington.' But he is clear in his conviction that a 'bet on gold’s diversifying properties rather than political stability' is the way to trade right now."

Tax Reform: ‘Keep It Simple, Stupid’ -Moore/Washington Times
"One of the most enduring lessons from the Obamacare fiasco, is that to win a political battle it is best to keep the message simple. If there are too many moving parts to a plan, if Americans don’t understand what the politicians are doing, or if there are parts of a bill they don’t like, it probably will go down in flames. Most people don’t like Obamacare, but when they couldn’t understand the Republican alternative, they chose the devil they knew versus the devil they didn’t. Which brings us to the tax cut fight. Larry Kudlow, Steve Forbes and I have been pleading with Congress to keep the debate focused on three simple reforms: 1) cut tax rates for large and small businesses to 15 percent to make America competitive and create jobs. 2) repatriate $2.5 trillion of money held by American companies back to the United States at a 10 percent tax rate. 3) double the standard deduction for every family and individual tax filer. And that’s it. Hard stop. No border tax. No carbon tax. No surtax on rich people. No end of popular tax deductions. You can’t get the tax base broadened without a single Democratic vote helping you do it, so don’t try to roll this boulder up the hill."

The Uprising of the Global Middle Class -The Atlantic
"Economic progress and increased prosperity do not always buy more political stability. What might a farmer in Iowa, a graphic designer in Chile, a pensioner in the U.K., and an assembly-line worker in China have in common? They are members of a socioeconomic class that includes people whose supposed frustrations have helped fuel dramatic political events in some places - whether it’s the election of Donald Trump, violent protests, or Brexit - and could well do the same even in closed societies like China. The conventional wisdom is that, in many places across the developed world, members of the middle class are railing against a stagnation or even decline in their standards of living. According to this view, a toxic mix of globalization, immigration, automation, inequality, nationalism, and racism can fuel the frustrations that encourage voters to punish 'establishment' ideas and politicians. The 'middle class' is, of course, a category encompassing billions of people worldwide, many of whom do not consider themselves frustrated or aggrieved....What’s in store for the future? It is clear that we will continue to see dramatic, and, at times, radical change being pushed by members of the middle class...the revolt of the middle classes in rich countries, and the furies of middle class in poor and middle-income countries are also boiling, with unpredictable consequences."

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8.25.17 - Gold Climbs After Yellen's Speech

Gold last traded at $1,297. Silver at $17.04 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on dollar weakness following Fed Chairman Janet Yellen's speech. U.S. stocks were lifted by rising investor confidence in Fed hopes and tax reform dreams.

Are Central Banks Nationalizing the Economy? -Mises
"The Financial Times recently ran an article that states that 'leading central banks now own a fifth of their governments’ total debt.' The figures are staggering. Without any recession or crisis, major central banks are purchasing more than $200 billion a month in government and private debt, led by the ECB and the Bank of Japan. The Federal Reserve owns more than 14% of the US total public debt. The ECB and BOJ balance sheets exceed 35% and 70% of their GDP. The Bank of Japan is now a top 10 shareholder in 90% of the Nikkei. The ECB owns 9.2% of the European corporate bond market and more than 10% of the main European countries’ total sovereign debt. The Bank of England owns between 25% and 30% of the UK’s sovereign debt. A recent report by Nick Smith, an analyst at CLSA, warns of what he calls 'the nationalization of the secondary market.'....It is called financial repression for a reason, and citizens will always try to escape from theft....It is a clever Machiavellian system to end free markets and disproportionately benefit governments through the most unfair of competitions: having unlimited access to money and credit and none of the risks. And passing the bill to everyone else."

central bankers Central Bankers Know Nothing About Modern Money -Snyder/Real Clear Markets
"It is late August and for central bankers it means Jackson Hole on the itinerary....Before the 2007 conclave, practically no one outside of the political class of Economists paid much attention. One reason is simply that much of what is said there is forgettable....The ultimate result would have to be where the US dollar, as that nation, would become too much for a global reserve to meet its gold obligation. This is what happened, generally speaking, when in August 1971 the Nixon administration defaulted by ending dollar convertibility. For many people, that was the end of the story, the beginning of the era of floating rate currencies 'freed' from the chains of gold (from the perspective of economists and policymakers)....Interest in especially international monetary arrangements withered in a new age of monetarism without money....The dollar did not replace gold in 1971. The eurodollar did long before 1971....The topic of this year’s Jackson Hole congregation is predictably absurd and offensive: Fostering a Dynamic Global Economy. A better topic would be, How Can We Explain A Lost Decade? That would have saved everyone the trouble of traveling so far out West and from far-flung corners of the globe, obviating any need for any conference at all. The answer to such a question is for the world’s monetary authorities exceedingly simple; they know nothing about modern money and it shows."

Yellen: System is safer now, though 'all-too-familiar' risks remain -CNBC
"Federal Reserve Chair Janet Yellen, looking back a decade after the onset of the financial crisis, said Friday the financial system is safer now than it was then though some adjustments to regulations may be needed. The central bank chief spoke at the Fed's annual conference in Jackson Hole, Wyoming. Though the speech is closely watched in financial markets, Yellen offered no clues about the future of monetary policy, instead focusing on the history of the crisis and what regulators have done in response....Her review came less than six months before her term ends in February. President Donald Trump has been circumspect about whether he will reappoint her, and Yellen has refused to speculate about her future....Yellen cited the likelihood of 'the all-too-familiar risks of excessive optimism, leverage and maturity transformation re-emerging in new ways that require policy responses.'"

Gold climbs as Yellen’s speech offered no clues on monetary policy -Marketwatch
"Gold prices moved higher Friday, buoyed by a weaker dollar that came on the heels of a speech by U.S. Federal Reserve Chairwoman Janet Yellen that didn’t offer clues on the central bank’s monetary policy investors hoped for. In a speech at the much-anticipated Kansas City Federal Reserve Bank’s symposium in Jackson Hole, Wyo., Yellen steered clear from questions about current interest-rate policy....Following Yellen’s speech, the dollar weakened. The greenback, as measured by the ICE U.S. Dollar Index was trading down 0.5% at 92.83, after touching a three-week low....For now, 'the rebound in gold prices likely reflect speculators testing the highest price levels for this year and focusing on continued policy uncertainty and risks of a debt ceiling showdown for the U.S. government,' said Rob Haworth, senior investment strategist of U.S. Bank Wealth Management."

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8.24.17 - A Recession Within 12-18 Months?

Gold last traded at $1,292. Silver at $16.96 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday ahead of statements from meeting in Jackson Hole on Friday. U.S. stocks inched higher on retail earnings which beat very low investor expectations.

Gold price waits for rates clues from Jackson Hole -TheWeek
"The gold price is trading in a tight range but is within touching distance of recent highs, as attention turns to the meeting of central bankers at Jackson Hole, which begins today. Last week the metal moved into the low $1,290s an ounce in the wake of the stock market sell-off following terror attacks in Spain and ongoing political turmoil in the US....Naeem Aslam, chief market analyst at Think Markets, told Reuters the political unrest in Washington, resulting from Donald Trump's threat to shut down the government if he is not granted funds to build a wall on the Mexican border, is generally positive for gold....If Yellen offers a more dovish tone on the impact on financial stability of ultra-low rates, gold could break higher and set a new high for the year so far, said Reuters analyst Wang Tao."

Why We'll Face A Recession In 12–18 Months -Maulden/MauldenEconomics
"Total debt is close to where it was at the beginning of the last recession....Real value added is the inflation-adjusted version of gross-value added. Here’s how Michael Lebowitz explains it: 'GVA is a measure of economic activity, like GDP, but formulated from the production side of the economy. It measures the dollar value of all goods and services produced less all the costs required to produce those goods or services. For example, if 720Global buys $100 worth of wood, $20 worth of other materials, and employs $30 worth of labor to build a chair, we have produced a good for $150. If that good is sold for $200, 720Global has created $50 of economic value. Over time, GVA tracks nominal GDP closely, but they can diverge in the short run. That is happening right now. Three of the last four quarters brought Real GDP growth - albeit not much - while RVA was negative. RVA below zero, as plotted below, is closely associated with the onset of recessions.'"

real value chart

"Maybe this time is different, but we know from all kinds of other data that a recession should strike soon - by which I mean that one is quite possible in the next 12–18 months."

John Maulden is yet another independent and credible voice suggesting a financial recession and market correction is imminent. In our free CRISIS TIMELINE Report we explain similar, cyclical economic risk factors converging within the next 24 months: "Prof. William R. Thompson from Indiana University has studied 1,000 years of how one cyclic pattern affects society; he sees us moving from a 'recession' to a' depression' in an 'economic winter' that could last until approximately 2020."

Debt Ceiling ‘Brinksmanship’ Could Test U.S. Top-Notch Credit Rating -Wall Street Journal
"Fitch Ratings said Wednesday that a failure to raise the U.S. debt limit in a 'timely manner' would prompt a review of the country’s credit rating, which is currently at AAA - the highest possible. The ability of lawmakers to meet two key fiscal deadlines next month will serve as a litmus test for 'coherent fiscal policy making and cooperation,' according to the bond-rating firm. 'Brinkmanship over the debt limit could ultimately have rating consequences, as failure to raise it would jeopardize the Treasury’s ability to meet debt service and other obligations,' wrote Charles Seville, James McCormack and Mark Brown on Fitch’s sovereign rating group. The Treasury Department has employed extraordinary measures to pay its bills since March, when the previous suspension of the debt limit expired and the new ceiling was set at nearly $20 trillion. If Congress doesn’t raise the debt ceiling to allow new borrowing, the U.S. could default on its debt or miss payments of benefits and salaries....S&P Global Ratings removed the U.S.'s triple-A credit rating in 2011, on the heels over raising the debt-ceiling fight on Capitol Hill, an action that roiled financial markets."

The Truth About the Fort Knox Gold -Rickards/Daily Reckoning
"What about the gold in Fort Knox? Is it actually there? There is a lot of confusion on this subject. First off, Fort Knox was built in 1937 partly to house gold that the Treasury was scooping up after the Gold Reserve Act took effect....Many gold bugs and conspiracy theorists say there is no actual gold in Fort Knox. They say the reason the government will not audit the gold, for example, is because the gold is not there. But the truth is quite the opposite....Yes, the gold is there. I actually have some evidence that the gold is there from military sources. Incidentally, most people think all the Treasury gold is in Fort Knox. But that is not correct. A little more than half the gold is at Fort Knox, but the rest is stored at West Point on the Hudson River in New York....Now, some people like billionaire precious metals trader Eric Sprott argue that the gold could very well be at Fort Knox, but it’s been leased out to commercial banks....Now, that’s not a problem unless all 100 parties show up at once and ask for their gold. The first person may get the gold, but the other 99 people are going get their contracts terminated....A lot of the gold could very well be leased out, and that leads to confusion about whether or not the government actually has the gold. But all the evidence tells me that the gold is in Fort Knox and at West Point."

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8.23.17 - "Never Buy or Sell in a Panic"

Gold last traded at $1,294. Silver at $17.04 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks fell amid downbeat housing data and government shutdown worries.

Wall Street Banks Warn Downturn Is Coming -Bloomberg
"HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle. Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop....Just like they did in the run-up to the 2007 crisis, investors are pricing assets based on the risks specific to an individual security and industry, and shrugging off broader drivers, such as the latest release of manufacturing data, the model shows. As traders look for excuses to stay bullish, traditional relationships within and between asset classes tend to break down....Citigroup analysts also say markets are on the cusp of entering a late-cycle peak before a recession that pushes stocks and bonds into a bear market....'Bubbles are common in these aging equity bull markets,' Citigroup analysts led by Robert Buckland said in a note Friday."

stock market When There is Blood in the Streets -OfDollarsAndData
"There is a famous quote by the 18th century banker Baron Rothschild: 'The time to buy is when there’s blood in the streets.' Rothschild made a lot of money in the panic that followed the Battle of Waterloo using this exact motto. However, his advice is far easier said than done....Imagine being 1 year into the Great Depression. By our definition, there was 'blood in the streets' as there had already been a 30% drawdown in the U.S. stock market. However, the market would continue to decline for another 2 years, with a 64% decline in the last year! Though you might start buying when there is blood in the streets, you may soon realize that a lot of that blood is your own. This is the fundamental problem with buying big during a crash. It’s incredibly difficult to call the bottom....If there is any advice I would follow during a panic, it would be to not react to it. By reacting you are far more likely to make a decision that loses you money than one that will help you."

"Never buy or sell in a panic," has been Swiss America founder Craig Smith's motto since launching the firm 35 years ago. "To resist this temptation it is necessary to prepare wisely BEFORE a panic strikes," says Mr. Smith. Every day another major warning signal of an impending stock market decline comes to light. To get prepared early we suggest watching Mr. Smith's latest Crisis Timeline video discussing what to do right now.

Gold edges higher as focus shifts to central banker meeting -Reuters
"Gold prices edged up on Wednesday, drawing some support from political uncertainty in the United States before a major central banking conference there this week....'Gold's kind of hanging in there before this Jackson Hole meeting. It is in a wait-and-see mode but we should have a better idea of direction by the end of this week,' Fawad Razaqzada, a technical analyst at, said....Markets are focused on a meeting of central bankers in Jackson Hole, Wyoming, starting Thursday. Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on Friday, on the outlook for monetary policy and interest rates."

Wal-Mart and Google Partner to Challenge Amazon -Fox Business
"Google and Wal-Mart Stores Inc. are joining forces in a partnership that includes enabling voice-ordered purchases from the retail giant on Google's virtual assistant, challenging rival Inc.'s grip on the next wave of e-commerce....Consumers will be able to order Wal-Mart goods from the retailer's stores by speaking to Google's virtual assistant, which sits in phones, Google's voice-controlled speakers and soon other devices. Wal-Mart said it will share consumers' purchase history with Google to enable users to quickly reorder items, a primary function of voice-controlled orders for commodity shopping....The increasing importance of voice shopping suggests Wal-Mart and Google, part of Alphabet Inc., need each other to compete against Amazon. Voice-controlled ordering is a small but rapidly growing share of online sales, analysts say, and one of the top uses of Amazon's virtual assistant Alexa and its Echo speakers....The battle between Wal-Mart and Amazon has recently taken on new intensity, most notably with Amazon's planned acquisition of Whole Foods, which heightens their competition in groceries."

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8.22.17 - Are We Fiddling While Rome Burns?

Gold last traded at $1,291. Silver at $16.98 an ounce.

NEWS SUMMARY: Precious metal prices eased back Tuesday on profit-taking and a firmer dollar. U.S. stocks rose amid upbeat Boeing earnings and tax reform hopes.

Speculators haven’t been this bullish on gold since October -Marketwatch
"Gold remained a hot commodity last week, with speculative investors such as hedge funds and money managers increasing their holdings in the haven metal for a fifth straight week. According to the weekly Commitments of Traders report from the Commodity Futures Trading Commission, net long positions in gold soared 30% for the week ended Tuesday to 179,537 contracts from 138,566 the week before. That marks the highest level of net longs among speculators since October....Gold on Friday briefly jumped above $1,300 an ounce for the first time since November, boosted by haven demand following a week of continued White House turmoil and a terror attack in Barcelona, Spain....The Dow Jones Industrial Average lost 1.9% over the past two weeks, while the CBOE Volatility Index has soared after trading around historic lows. That in turn spurred a flight to haven assets, such as gold."

investors Our Inner Investing World Doesn't Reflect Reality -Ritholtz/Bloomberg
"If the events of recent weeks (or years) have you asking yourself, What is wrong with these people?, the answer is: not very much. They simply suffer from a small but crucial error in the way their brains create models of the world around them. That is the conclusion of 'The Unpersuadables: Adventures with the Enemies of Science.' The insights of author Will Storr are applicable not only to the current political mayhem but to traders and investors....Storr quotes Jonathan Haidt, the New York University professor of ethical leadership, who notes that the world is 'not really one made of rocks, trees, and physical objects; it is a world of insults, opportunities, status symbols, betrayals, saints and sinners.' In other words, beliefs. You can see this in the investing debates that take place every day. It is how people rationalize their current holdings. They 'talk their book' because portfolios reflect their mental models. Whether you are a value investor or an active trader, you believe you have an understanding of how markets and economies function, and deploy your capital accordingly....Regardless of where you fall in the Federal Reserve debate, or if you think stocks are cheap or expensive, or if this market is too old or has room to run, your mental models are at work. Be aware of how their imperfections might be driving your investing decisions."

Offensive Valuations Totally Divorced from Reality -Hussman/Hussman Funds
"Over the next several years, investors are likely to face a profound and unpleasant downward adjustment in their assumptions about growth; GDP growth, revenue growth, earnings growth, and growth in their own investments. Given that the most historically reliable measures of market valuation we identify already range between 140% and 170% above their historical norms, this adjustment in growth assumptions is likely to be accompanied by one of the most violent market declines in U.S. history, even if interest rates remain depressed....Given current valuation extremes, both for the S&P 500 Index itself and across every decile of stocks; given the repeated emergence of the most extreme 'overvalued, overbought, overbullish' syndromes we define; and given clearly deteriorating market internals, we estimate extreme downside risk across virtually every corner of the stock market over the completion of the current speculative market cycle. Investors have responded to low interest rates by driving stocks to obscene valuations, with little recognition of their implicit (and incorrect) assumption that economic and corporate growth rates remain unchanged from post-war norms...Given current valuation extremes, the associated market losses are likely to be predictably brutal."

Are We Fiddling While Rome Burns? -Smith/ZeroHedge
"It turns out Nero wasn't fiddling as Rome burned - he was 60 km away at the time. The story has become short-hand for making light of a catastrophe, either out of self-interest or out of a mad detachment from reality....Are we fiddling while Rome burns? I would say yes - because we're not solving any of the structural problems that are dooming the status quo....Here's a short list of structural problems we should be tackling: 1. Soaring inequality and the institutionalization of economic privilege....2. The central state (government) has one default setting: endless expansion into every nook and cranny of daily life...democracy is reduced to an auction that excludes the bottom 99.9%....3. Finance has detached from the real-world economy, distorting every function via financialization, which concentrates income and wealth in the hands of the few....4. Our educational system is obsolete but the the current system is incapable of transformation for structural reasons....Solutions abound, but they require the retirement of obsolete systems that defend entrenched interests and soul-crushing inequalities....The status quo is coughing up blood, and the situation is dire. Denial won't fix what's broken, and neither will magical thinking (the economy is 'recovering,' symbolic gestures and virtue-signaling will fix everything, etc.)"

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8.21.17 - 50% Stock Plunge 'Conceivable'

Gold last traded at $1,296. Silver at $17.01 an ounce.

NEWS SUMMARY: Precious metal prices rose to 2-month highs Monday amid ongoing geopolitical worries. U.S. stocks traded near flat line as financial and technology stocks declined.

Stars Are Aligning for Gold Bugs -Wall Street Journal
"Gold looks poised to run the table. The precious metal has crept higher for the past month and a growing number of bulls say a late-summer market ruction will push gold to new highs....Analysts say that topping $1,300 could spark the momentum-based buying that has recently eluded the metal. Gold is up 12% in 2017, all but recouping losses from late last year. As is often the case, gold has benefited from geopolitical turmoil this year, most recently saber-rattling between the U.S. and North Korea....Meanwhile, persistently low inflation readings in the U.S. have left the timing of the next interest-rate hike by the Federal Reserve in doubt. That’s another plus for gold, since investors sacrifice less yield by owning the metal in lieu of government bonds....With both stocks and bonds looking richly priced, and the political landscape highly uncertain, now looks like a decent time to up the ante on gold."

politics Will President Trump Go for Broke? -PontificationBlog
"On his Inauguration Day, Donald Trump may have become the richest President in American history. Only seven months later, he may be the poorest – not in personal wealth but in shrinking political capital. As Republican lawmakers and fellow business executives distance themselves from him, and as just-departed senior advisor Steve Bannon tells the press that 'this presidency is over,' President Trump appears weakened. But President Trump, if he stays in office, could have a huge impact on our politics....Three surprising Trump options could change the game, however, and greatly affect your money, investments, and future. President Trump could: (1) Become more of a RINO Republican who supports open borders for cheap labor, globalism, and ever-bigger government — a hybrid that is half-Trump, half-Jeb Bush – a 'Trush.'....(2) Make Democratic lawmakers offers too good to refuse about trillions for infrastructure and social spending, more jobs, higher taxes on the rich, and pro-immigration reform....(3) Launch a third party, a Populist-Nationalist party, with himself as its head....By 'Trumpangulation,' the incumbent President could make both major parties compete to support him. He could make and take credit for positive economic and social policies. He could, with luck, win re-election. Full story

Ron Paul: 50% stock market plunge 'conceivable' -CNBC
"The former Republican Congressman from Texas believes escalating dysfunction in Washington will create even more pain for Wall Street. 'A 50 percent pullback is conceivable,' Paul said on 'Futures Now' recently. 'I don't believe it's ten years off. I don't even believe it's a year off.' According to his calculations, it would cut the S&P 500 Index in half, to 1212, and the blue-chip Dow Jones Industrial Average would collapse to 10,837. Paul noted that there's a lot of chaos in Washington right now, with an "unpredictable president" and those who are inclined to "tear him apart" but if the market takes that big of a tumble, he doesn't see it as Trump's fault. 'It's all man-made. It's not the fault of Donald Trump in the last week. If the market crashes tomorrow and we have a great depression, he didn't do it in six months. It took more like six or ten years to cause all these problems that we're facing' he said....'I see the foundation of our system built on sand, and a big wind comes along to blow it down,' Paul said."

Wells Fargo troubles shift from phony bank accounts to real ones -Reuters
"A Reuters review of the regulator's complaints database found several instances of customers reporting financial hardship in recent years after Wells Fargo unexpectedly froze or closed their accounts. Some of the complaints described fraudulent deposits of unknown origin. Others said they were victims of identity theft and Wells Fargo closed their accounts and refused to reopen them or open new ones....The complaints had consistent themes of confusion about why accounts were frozen or closed, and reflected desperation over being unable to access money, as well as frustration over not getting help from Wells Fargo's customer service. 'I moved money from my mother's savings account into her checking account the day before she passed away,' one Wells Fargo customer wrote. 'This checking account has been 'locked' by the fraud department for almost 3 months ... Now her debts are delinquent and mortgage about to go into foreclosure.'"

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8.18.17 - How Will Tomorrow Judge Us?

Gold last traded at $1,291. Silver at $17.00 an ounce.

NEWS SUMMARY: Precious metal prices touched 2017 highs Friday amid political turmoil. U.S. stocks fell then rebounded on news that President Trump has decided to remove White House chief strategist Steve Bannon, White House chief strategist.

Gold tests $1,300 level for first time in 9 months -Marketwatch
"Gold prices on Friday traded above $1,300 for the first time in 2017, though it is off its highest levels, as precious metals drew haven demand, sparked by selling in global equities, a terrorist attack in Barcelona and concerns about President Donald Trump’s pro-business agenda....A flight to assets perceived as safe has been underpinned by Thursday’s selloff in equities, highlighted by the worst downdraft for the Dow Jones Industrial Average and S&P 500 index since May 17....'The terror attacks in Spain are reminding investors of the need to hedge their portfolios against geopolitical risk,' said Maxwell Gold, director of investment strategy at ETF Securities....Weakness in the U.S. dollar, buffeted by the trove of risk factors, including concerns that the Federal Reserve will be hesitant to lift interest rates further this year, also has helped to elevate gold."

lady liberty After 10 years, policy makers still haven't learned the right lessons from the financial crisis -Market Watch
“'Ten years ago this month, the French bank BNP Paribas decided to limit investors’ access to the money they had deposited in three funds. It was the first loud signal of the financial stress that would, a year later, send the global economy into a tailspin. Yet the massive economic and financial dislocations that would come to a boil in late 2008 and continue through early 2009 — which brought the world to the brink of a devastating multi-year depression — took policy makers in advanced economies completely by surprise. They had clearly not paid enough attention to the lessons of crises in the emerging world....Unfortunately, these problems are yet to be fully resolved. In fact, there is a growing risk that politicians — many of whom are distracted and sidestepping their economic-governance responsibilities — may be missing the biggest historical insight of all: the importance of an economy’s underlying growth model. Indeed, advanced-country politicians today still seem to be ignoring the limitations of an economic model that relies excessively on finance to create sustainable, inclusive growth. Though those limitations have been laid bare over the last ten years, policy makers did not strengthen adequately the growth model on which their economies depend."

7 signs the stock market is ready to run smack into a wall -Marketwatch
"The stock market’s relentless rally to records may soon be facing a key test. A number of indicators point to a steady, halting deterioration of some of the factors that have helped Wall Street equities score a steady stream of all-time highs. Peek beneath the hood of the action, and market technicians point to some unsightly problems within the market’s machinery. Here are a few: 1). Russell 2000 falls into downtrend....2). Correlation breakdowns....3). Wall Street’s volatility gauge, the VIX....4). Gold rally....5). Dow transports break down....6). Bad market breadth....7). Trump agenda."

Stability concerns focus at Fed ahead of Yellen speech -Reuters
"Minutes of the July Federal Open Market Committee meeting released this week flagged a division among policymakers focused on weak inflation as a reason to stall further rate increases and those who feel still loose financial conditions pose a risk the Fed needs to counter. Two officials this week, including vice chair William Dudley who has in the past taken a more dovish approach to policymaking, said the fact that financial conditions have recently eased despite Fed rate increases is a reason to keep plans to tighten policy in place. When the Fed said Thursday that Yellen next week would use a keynote speech at Jackson Hole to address 'financial stability,' it was a clue to some that she may agree."

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8.17.17 - Is President Trump Killing the Dollar?

Gold last traded at $1,292. Silver at $17.05 an ounce.

NEWS SUMMARY: Gold rose on safe-haven buying despite a firmer dollar. U.S. stocks fell sharply on concerns President Trump's recent controversies will limit passage of anticipated business-friendly legislation.

The Investment Bank Tipping Gold to Hit $1,400 -Bloomberg
"Gold prices are set to jump to a four-year high of $1,400 an ounce by the end of the year over mounting tensions between North Korea and the U.S., and surging demand in the world’s biggest consumers, according to the head of precious metals at a Russian investment bank. Bullion could rise to $1,360 within three months before climbing higher, fueled by global political risks and buying from China and India, said Evgeny Ananiev at VTB Capital JSC, the investment-banking unit of Russia’s second-largest lender VTB Group....Prices have climbed 12 percent this year, driven by worries over a potential nuclear conflict between the U.S. and North Korea, and subdued inflation in the U.S., which is cooling chances of a further increase in interest rates. President Donald Trump has intensified warnings to North Korea, promising a massive response to any strike against the U.S. or its allies. Hedge fund billionaire Ray Dalio recommends investors place 5 to 10 percent of their assets in gold."

markets The Great Disconnect: Markets Vs. Economy -Zero Hedge
"Looking at the current economic backdrop as compared to asset prices we find a very large disconnect. Since Jan 1st of 2009, through the end of June, the stock market has risen by an astounding 130.51%. However, if we measure from the March 9, 2009 lows, the percentage gain explodes to more than 200%. With such a large gain in the financial markets we should see a commensurate indication of economic growth - right? The reality is that after 3-massive Federal Reserve driven 'Quantitative Easing' programs, a maturity extension program, bailouts of TARP, TGLP, TGLF, etc., HAMP, HARP, direct bailouts of Bear Stearns, AIG, GM, bank supports, etc., all of which total more than $33 Trillion, the economy grew by just $2.64 Trillion, or a whopping 16.7% since the beginning of 2009....Unfortunately, while Wall Street has benefited greatly from the Fed’s interventions, Main Street has not....So, while the markets have surged to 'all-time highs,' for the majority of Americans who have little, or no, vested interest in the financial markets their view is markedly different....Eventually, the current disconnect between the economy and the markets will merge. My bet is that such a convergence is not likely to be a pleasant one."

Why Cryptocurrencies Will Never Be Safe Havens -Mises
"Every further new high in the price of Bitcoin brings ever more claims that it is destined to become the preeminent safe haven investment of the modern age - the new gold. But there’s no getting around the fact that Bitcoin is essentially a speculative investment in a new technology, specifically the blockchain. Bitcoin and each new initial coin offering (ICO) should be thought of as software infrastructure innovation tools, not competing currencies....Cryptocurrencies are a very significant value-added technological innovation that calls directly into question the government monopoly over money....However, unlike physical assets such as gold and silver that have unique physical attributes endowing them with monetary importance for millennia, the problem is that there is no barrier to entry for cryptocurrencies; as each new competing cryptocurrency finds success, it dilutes or inflates the universe of the others. The store-of-value component of cryptocurrencies - which is, at a bare-minimum, a fundamental requirement for safe haven status - is a minuscule part of its value and appreciation....Cryptocurrencies are a very important development, and an enormous step in the direction toward the decentralization of monetary power. This has enormously positive potential, and I am a big cheerleader for their success. But caveat emptor - thinking that we are magically creating new stores-of-value and thus a new safe haven is a profound mistake."

Is Trump Killing the Dollar? -Cohen/Project-Syndicate
"For nearly a century, the US dollar has been viewed as the financial world’s ultimate safe haven. No other currency has promised the same degree of security and liquidity for accumulated wealth. In past times of trouble, skittish investors and prudent central banks have all piled into dollar-denominated assets, not least US Treasury bonds. This may no longer be the case. US President Donald Trump’s chaotic administration has severely undermined confidence in the greenback....The dollar is about to face a serious test. Will global investors continue to put their money in a country whose leader loudly provokes the Hermit Kingdom with threats of 'fire and fury,' or will they find financial refuge elsewhere? Not since World War II has the safety of the dollar been in such doubt....The dollar’s popularity as a store of value confers an 'exorbitant privilege' to the US....There will be nothing 'great' about an America that has sacrificed its dominant position in the global financial system."

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8.16.17 - Forbes: "Every Investor Must Own Gold"

Gold last traded at $1,282. Silver at $16.94 an ounce.

News Summary: Precious metal ended higher Wednesday as President Trump disbanded business advisory groups. U.S. stocks struggle after release of Fed minutes.

In The Age Of Cyber-Terrorism, Every Investor Must Own Gold - Forbes
"Take it from 'Dr. Doom': own some physical gold and keep it out of the banking system....In a recent Metal Masters interview... he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the U.S. power grid. In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today....The Fed largely ignores gold as an asset, he says, because 'gold is an embarrassment to central banks.' Regarding a possible war, Faber believes it’s unlikely that anyone will ever invade China or the United States. He thinks the true vulnerability lies in 'wars that are fought not with tanks—they are fought by, say, somebody could switch off the light in New York, or the electricity, or the Internet. If you switched off the Internet, what would happen?' This is where the merits of gold bullion become obvious, he says: 'In these times, you actually want to have access to something physical that is a recognized medium of exchange.'"

central banks Central banks hold a fifth of their governments' debt - Financial Times
"Leading central banks now own a fifth of their governments’ total debt, a sign of the scale of the challenge they will face in unwinding unprecedented stimulus measures deployed over the past decade. Since the financial crisis emerged, the world’s biggest central banks have carried out large-scale purchases of bonds and other securities in a bid to boost the global economy by driving down borrowing costs for households and businesses. In total, the six central banks that have embarked on quantitative easing over the past decade — the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England, along with the Swiss and Swedish central banks — now hold more than $15tn of assets, according to analysis by the FT of IMF and central bank figures, more than four times the pre-crisis level. Of this, more than $9tn is government bonds — one dollar in every five of the $46tn total outstanding debt owed by their governments."

Trump abruptly ends manufacturing council after CEOs disband strategic and policy forum - CNBC
"In a private phone call Wednesday afternoon, CEOs who were part of a strategic council to Trump agreed to disband the group and condemn Trump's confrontational response to a violent white supremacist rally in Charlottesville, Virginia. Shortly after CNBC and other broke the news that the council was disbanding, Trump took to Twitter to say he was ending that forum and another featuring manufacturing leaders. By the time Trump made his statement, several executives had left the manufacturing group this week....The events mark the biggest falling out yet between Trump and corporate America, which largely cheered his pro-business stances when he took office....In a statement, the Strategic and Policy Forum members said they 'believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans'"

Is Historically Low Volatility About To Surge? - Zero Hedge
"You have probably noticed it already: stock market volatility has recently all but disappeared. This raises an important question for every investor: Has the market established a permanent plateau of low volatility, or is the current period of low volatility just the calm before the storm?...Many investors are currently betting on a further decline in volatility. In view of its already very low level and the negligible additional downside potential it offers relative to the substantial upside potential, this is probably not the best idea ever. Moreover, as shown above, October is the month in which volatility typically reaches a seasonal peak. Taking both of these facts into account, it seems far more sensible to expect an expansion in volatility."

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8.15.17 - Personal Debt at All Time High

Gold last traded at $1,279. Silver at $16.71 an ounce.

News Summary: Precious metal prices eased back Tuesday on normal profit-taking following recent gains. U.S. stocks struggled as investors scaled back buying on retailer wreck.

Americans' debt level notches a news record high - Reuters
"Americans' debt level notched another record high in the second quarter, after having earlier in the year surpassed its pre-crisis peak, on the back of modest rises in mortgage, auto and credit card debt, where delinquencies jumped. Total U.S. household debt was $12.84 trillion in the three months to June, up $552 billion from a year ago, according to a Federal Reserve Bank of New York report published on Tuesday. The proportion of overall debt that was delinquent, at 4.8 percent, was on par with the previous quarter. However a red flag was raised over the transitions of credit card balances into delinquency, which the New York Fed said 'ticked up notably.' Loosening lending standards have allowed borrowers with lower credit scores to access credit cards, Andrew Haughwout, an in-house economist, said in the report. 'The current state of credit card delinquency flows can be an early indicator of future trends and we will closely monitor the degree to which this uptick is predictive of further consumer distress,' he said."

debt China's debt boom could lead to financial crisis, IMF warns - The Telegraph
"China’s economy is reliant on too much debt and the enormous boom in credit risks leading to a new financial crisis, the International Monetary Fund (IMF) has warned. GDP in the world’s second largest economy is set to grow by 6.7pc this year and 6.4pc next year, better than the 6.6pc and 6.2pc growth rates that the IMF forecast earlier this year. Stronger global growth has given China a lift, as has extra government spending. But in the years ahead, risks will grow as China’s extraordinary debt bubble keeps on building. Growth in China has been propped up by rapid increases in debt in recent years. 'Nominal credit to the nonfinancial sector more than doubled in the last five years, and the total domestic nonfinancial credit-to-GDP ratio increased by 60 percentage points to about 230pc in 2016,' the IMF found. Those debts are expected to rise to almost 300pc of GDP in 2022.... 'International experience suggests that China’s current credit trajectory is dangerous with increasing risks of a disruptive adjustment and/or a marked growth slowdown,' the report said. Its analysts studied 43 large credit booms and found that almost every single one resulted in a sharp slowdown or a financial crisis."

The Investment Bank Tipping Gold to Hit $1,400 - Bloomberg
"Gold prices are set to jump to a four-year high of $1,400 an ounce by the end of the year over mounting tensions between North Korea and the U.S., and surging demand in the world’s biggest consumers, according to the head of precious metals at a Russian investment bank. Bullion could rise to $1,360 within three months before climbing higher, fueled by global political risks and buying from China and India, said Evgeny Ananiev at VTB Capital JSC, the investment-banking unit of Russia’s second-largest lender VTB Group. 'We may see some correction, but I don’t think gold will drop below $1,200 as it’s well supported,' he said in a weekend interview in Goa.....'Fundamentally, we have been very bullish on the market,' said Chirag Sheth, an analyst at Metals Focus Ltd., an independent precious-metals research firm based in London....Sheth expects prices to advance to $1,400 in six to nine months as the situation in North Korea sees investors coming back to the market in search of a haven. The U.S. Federal Reserve, which was hawkish on interest rates, has now softened its stance, providing further support to bullion, he said."

Housing Bubble 2.0: Number Of Homebuyers Putting Less Than 10% Down Soars to 7-Year High - Zero Hedge
"A really long, long time ago.... the entire international financial system almost collapsed courtesy of a mortgage lending bubble that allowed anyone with a pulse to finance over 100% of a home's purchase price...with pretty much no questions asked.... As Black Knight Financial Services points out, down payments, the very thing that is supposed to deter rampant housing speculation by forcing buyers to have 'skin in the game', are once again disappearing from the mortgage market. In fact, just in the last 12 months, 1.5 million borrowers have purchased a home with less than 10% down, a 7-year high.....On the bright side, at least Yellen's interest rate bubble means that today's housing speculators don't even have to rely on introductory teaser rates to finance their McMansions...Yellen just artificially set the 30-year fixed rate at the 2007 ARM teaser's just much easier this way."

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8.14.17 - Investment Advice During Turmoil

NEWS SUMMARY: Gold surge ebbs as North Korea tensions ease, silver sustains. Stocks regain as fear subsides.

DALIO: Risks are rising, and everybody should put 5% to 10% of their assets in gold -BusinessInsider
"Geopolitical risks are rising, and everyone needs to consider an allocation to gold. That's according to a Bridgewater Associates note to clients released on Wednesday, penned by founder Ray Dalio and staffers Bob Elliott, Steven Kryger, and Neil Hannan. Bridgewater, based in Bridgeport, Connecticut, is the world's largest hedge fund firm, managing about $160 billion firmwide across strategies. 'When it comes to assessing political matters (especially global geopolitics like the North Korea matter), we are very humble. We know that we don't have a unique insight that we'd choose to bet on ... We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit, so if you don't have 5-10% of your assets in gold as a hedge, we'd suggest you relook at this. Don't let traditional biases, rather than an excellent analysis, stand in the way of you doing this (and if you do have an excellent analysis of why you shouldn't have such an allocation to gold, we'd appreciate you sharing it with us.)' Dalio has long been of the view that investors should have at least some allocation to gold, saying as much in an interview with Business Insider's Henry Blodget earlier this year."

chipped You will get chipped – eventually -CNBC
"You will get chipped. It's just a matter of time. In the aftermath of a Wisconsin firm embedding microchips in employees last week to ditch company badges and corporate logons, the Internet has entered into full-throated debate. Religious activists are so appalled, they've been penning nasty 1-star reviews of the company, Three Square Market, on Google, Glassdoor and social media. On the flip side, seemingly everyone else wants to know: Is this what real life is going to be like soon at work? Will I be chipped? 'It will happen to everybody,' says Noelle Chesley, 49, associate professor of sociology at the University of Wisconsin-Milwaukee. "'But not this year, and not in 2018. Maybe not my generation, but certainly that of my kids.'....This would go beyond paying with your smartphone. Instead, chipped customers would simply wave their hands in lieu of Apple Pay and other mobile-payment systems. The benefits don't stop there. In the future, consumers could zip through airport scanners sans passport or drivers license; open doors; start cars; and operate home automation systems. All of it, if the technology pans out, with the simple wave of a hand....Be it wearable technology or an embedded chip, the always on-always connected chip is going to be part of our lives."

Advice for investing during turmoil: 'Do less' -CNBC
"Michael Batnick of Ritholtz Wealth Management believes investors should 'do less' and focus on the long term to achieve success, especially during times of geopolitical crisis and high volatility like we've seen this week....'The important thing is to just do less, make less decisions. Never change a portfolio because of what happened yesterday,' Batnick said. 'Everybody tries to beat the market. Some people: it takes them a lifetime to figure out that they can't do it. Some people never figure it out. Some people figure it out really quickly. I was on the quicker side.' Batnick is the director of research at Ritholtz, which oversees around $550 million in assets and was founded in 2013 by Barry Ritholtz and Josh Brown."

When Cash Is King -SilverlightInvest
"Investor cash levels are near an all-time low. Meanwhile, Warren Buffett is sitting on a record amount of cash. How much cash do you have on the sidelines? How much should you have? Cash competes with other asset classes for investor wallet share. Right now, it's losing that battle. In the latest weekly survey of Bank of America Merrill Lynch high net worth clients, cash allocation fell to an all-time low of 10.4%. The previous low of 11% was recorded in April 2007. Cash does not appear to be an attractive asset if you know how to apply The Rule of 72—a math shortcut that allows you to figure out how long it will take to double your money at a specified level of return. Once upon a time, cash paid 5%. Really, it did. Back then, you could park in cash and double your money in 14.4 years (72/5 = 14.4). Presently, cash yields very little. You can get 1% or so. That's 72 years to double your money!....And yet the all-time ‘King of Investing,’ Warren Buffett, is compiling the biggest cash war chest in Berkshire Hathaway history....Cash becomes a progressively more appealing option as a cycle ages....The best investment opportunities are when others are scrambling to raise cash, when everyone else is selling and you are in the rare position to buy. That’s when cash is at its peak value as an asset—that's when cash is king."

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8.11.17 - A Debased Dollar Tilts Playing Field

NEWS SUMMARY: Precious metal prices trended higher on Friday, with gold gaining on safe haven buying and a weaker dollar. U.S. stocks rose as investors focused on tame inflation data rather than ongoing North Korea worries.

'Gold is about break out on the upside strongly,' -Gartman/CNBC
"The runup in gold prices is far from over, commodities expert Dennis Gartman told CNBC on Thursday. With tensions mounting between the United States and North Korea, investors have been moving into the precious metal and other safe haven trades. On Thursday, gold futures hit their highest level in two months, jumping about 1 percent. 'Gold is about to break out on the upside strongly,' the editor and publisher of The Gartman Letter said in an interview with 'Power Lunch.' Gartman has liked the commodity for years and believes right now investors should have about 10 to 15 percent of their portfolios allocated to gold. 'One never knows when geopolitical risks will arise. One never knows when something untoward will happen economically,' he said. 'The stock market looks a little vulnerable. The geopolitical circumstances are getting worse and worse.' Gartman added."

Uneven Final Currency Debasement to Zero Has Started -GoldSwitzerland
"Fake money has created a totally uneven playing field for most ordinary people. Money used to represent a medium of exchange that would facilitate bartering. Instead of exchanging goods or services, people would receive a piece of paper that was equal to the value of their goods or services....Eventually bankers started to cheat and issued a lot more money/paper than the counter value produced in kind. And that was the beginning of money printing....The problem with money printing is not just that it destroys the value of paper money, as creating money out of thin air also creates a totally uneven playing field. To produce goods or services requires a lot of hard labor for ordinary people. But governments and bankers have the upper hand because they just need some electricity which allows them to press a button to produce money....We are now not far from the point when the bubbles in stocks, credit and property will collapse. This will lead to a final futile attempt by governments to save the world by printing unlimited amounts of money. At that point, normal people will finally realize that the money they are holding is totally worthless. This will lead to protests, attack on government and bankers as well as social unrest....During the autumn of 2017, gold is likely to resume its uptrend to eventually much higher levels."

In the Age of Trump, the Dollar No Longer Seems a Sure Thing -NewYorkTimes
"When trouble flares and anxiety mounts, people who manage money traditionally entrust it to a seemingly indomitable refuge, the American dollar. Yet on Wednesday, in the hours after President’s Trump’s threat to unleash 'fire and fury' on North Korea if it continued to menace the United States, global investors sold the dollar. The same dynamic played out in June, as Saudi Arabia and other Arab nations imposed an embargo on Qatar, delivering a fraught crisis to the oil-rich Persian Gulf....Since the beginning of the year, the dollar has surrendered nearly 8 percent against a basket of major currencies....The dollar has in some sense become an international medium of expression about the American political environment. Its value offers a gauge of sentiment for Mr. Trump's prospects in achieving his economic goals, as well as worries about his potentially impulsive declarations....The fate of the dollar is now subject to the influences of a presidential administration that has given markets an expectation for the unexpected."

Americans are saving less as income lags spending -USAToday
"As average wage hikes across the U.S. continue to lag increases in spending, Americans are saving less or dipping into bank accounts to fuel their outlays. Some economists say that's an unsustainable dynamic that portends a downturn in consumer spending, which has been driving economic growth. From the second quarter of 2015 to the second quarter of 2017, personal disposable income increased an average of 2.8% a year while consumer outlays rose about 4% a year, BEA figures show. The gap between income and spending is pulled from savings. 'If you're relying on your savings to finance your spending, at some point you’re going to run dry,' says Gregory Daco, chief U.S. economist of Oxford Economics....So far, pay increases have been tempered, contributing to the lion's share of the sluggish income growth, says BEA economist Kurt Kunze....'When everything else is going up and your paycheck isn't, it's not even keeping pace with the cost of living,' he says."

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8.10.17 - Gold: Defensive Demand Growing

Gold last traded at $1,290. Silver at $17.06 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on rising safe-haven demand amid ongoing geopolitical fears. U.S. stocks traded broadly lower as tensions with North Korea escalated.

Gold Prices Hit 2-Month Highs, Defensive Demand Continues -EconomicCalendar
"Gold prices have maintained a firm tone with a push to 2-month highs on Thursday as underlying demand for defensive assets remained an important feature. There were further tensions surrounding North Korea on Thursday with the Pyongyang regime claiming that missiles which could be used to target the Pacific island of Guam would be ready to launch by mid-August....Markets remained concerned over the risk of a US first-strike against North Korean nuclear facilities. Equity markets continued to lose ground on Thursday which provided further net support to gold, especially with bond yields tending to drift lower....The dollar overall drifted weaker which provided further support to gold prices."

gold Beneath Markets’ Calm Are Signs of Growing Investor Caution -NewYorkTimes
"President Trump threatened nuclear war with North Korea, and the markets yawned....But beneath the calm there were signs that investors...are becoming more cautious. The price of gold, a traditional safe haven investment, has been rising, and on Wednesday it continued its march, increasing more than 1 percent on the day. Gold’s strong move pushed it just barely ahead of the Standard & Poor’s 500-stock index for the year - up 10.47 percent, compared with 10.43 percent for the S.&P....Gold tends to outperform stocks when the markets are sliding, so it is unusual for such a conservative investment to beat equities when they have been on a tear as has been the case this year. What is driving this anomaly, some say, is a recognition that eventually investors will no longer be able to ignore recent headline risks - be it nuclear tensions with North Korea, a trade war with China or a debt ceiling crisis in Washington....Once investors return from vacation, the theory goes, and with no good earnings news to inspire them, they will be more sensitive to headline events. That could result in sharper moves downward in stock market indexes."

Financial Martial Law Is Coming -BonnerAndPartners
"JPMorgan Chase - the country’s biggest bank - has banned cash payments for credit card debt, mortgages, and car loans. It has also banned the storage of 'any cash or coins' in safe deposit boxes. And all U.S. banks now view large cash withdrawals as suspicious. Under the Bank Secrecy Act, if you withdraw $10,000 or more in a day, your bank is required to file something called a Currency Transaction Report with the Financial Crimes Enforcement Network (FinCEN)....And your bank is required to file something called a Suspicious Activity Report with FinCEN if it believes you are trying to avoid triggering a Currency Transaction Report by withdrawing smaller cash amounts. This puts all cash withdrawals under the microscope....And even if you manage to get your cash out of your bank, having it on your person also makes you a target of the authorities. Under civil asset forfeiture laws, police and federal agents can confiscate any cash you might have on you if they merely suspect it was involved in a crime."

Tax Reform: Republicans Too Often Are Cowardly And Incompetent -Steve Forbes/Forbes
"When Democrats hurl the charge that Republican tax-reduction proposals 'favor the rich,' too many GOPers quiver and quake and run for cover...Without investment, we don't progress, and living standards stagnate, then decline. Yet Republican senators decided to retain these anti-growth levies, lest they be accused of 'favoring the rich.'....All this is a sad commentary on a party that tells us it still admires Ronald Reagan. The Gipper would have gagged at such populist posturing. He understood - as too many Republicans these days do not - that voters want a growing economy and wages that grow right along with it....Republicans are fools to play the class-envy game. They will lose to the Bernie Sanders and Elizabeth Warren types every time. Voters want results, not a GOP version of socialism lite....The formula for prosperity isn't a new one: low tax rates and sound money....As for a big overhaul of the federal income tax code, forget it. It's too late now....Make simple cuts now, and go for major tax reform after next year's elections."

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8.9.17 - Gold Spikes on Geopolitical Fears

Gold last traded at $1,279 an ounce. Silver at $16.86 an ounce.

NEWS SUMMARY: Precious metal price rose sharply Wednesday on safe haven buying and rising geopolitical worries. U.S. stocks fell as tensions with North Korea heat up and Disney stock drags Dow down.

Gold near two-month peak on North Korean tensions -Reuters
"Gold hit a near two-month peak on Wednesday, after North Korea said it is considering an attack on the U.S. Pacific territory of Guam and U.S. president Donald Trump boasted of the strength of the American nuclear arsenal. The tensions rattled global markets, sending investors out of equities and into the safety of the Swiss franc and government debt. The VIX 'fear gauge' of expected volatility on the S&P 500 hit a one-month high. 'The market hates uncertainty and that's certainly what we have now,' said Ole Hansen, head of commodity strategy at Saxo Bank....'We believe continued sabre-rattling ... could take gold prices higher still,' said Nitesh Shah, director at ETF Securities. 'There is genuine concern, hence the fall in the dollar, (but) as ever with Trump, it’s unclear how quickly the rest of the U.S. machinery will calm him, so rises are not yet huge.'"

crisis timeline Financial crash warning: 10 years on from 2007 crisis experts warn debt bubble could burst -Express
"A DECADE since the financial crisis brought the world to its knees, experts fear a repeat could again shatter the global economy. The start of the sub-prime housing crash that obliterated banks and financial markets across the world is pin-pointed to August 9 2007. On this day, banking giant BNP Paribas Investment Partners announced it had suspended the valuation for three of its funds exposed to the US sub-prime housing market because of 'the complete evaporation of liquidity in certain market segments of the US securitization market'. The subsequent collapse in US house prices triggered the worst economic recession since the Great Depression, with banks and entire countries needing bail-outs. Worryingly, the US economy and housing market has many similarities today to 10 years ago."

Free CRISIS TIMELINE Report: "Based originally on the cycle analysis of Austrian economist Joseph Schumpeter, the U.K Independent reported, a negative convergence of just three cycles, 'came together in 2008, a rare occurrence leading to that disaster' that cost the average American 40 percent or his or her net worth. The bad news now comes from a diversity of sources. Prof. William R. Thompson from Indiana University has studied 1,000 years of how one cyclic pattern affects society; he sees us moving from a 'recession' to a' depression' in an 'economic winter' that could last until approximately 2020." Watch - Craig R. Smith explains what to do now...

Billionaires worry about stock-market correction -Marketwatch
"Yes, there are tremendous benefits to passive, low-risk, long-term investing strategies. And obviously, some of the 'best' investors on Wall Street often get things painfully wrong. But when some of the biggest and most respected hedge funds are pumping the brakes as the Dow Jones Industrial Average and the S&P 500 have hit new all-time highs this week (and the Nasdaq Composite isn’t far off) ... well, it seems plain irresponsible to simply write that off. Here are what seven of Wall Street’s most iconic investors have to say about the market and the potential for a correction in the next several months....Jeff Gundlach advises 'moving toward the exits'....Carl Icahn warns stocks are overvalued....Howard Marks warns clients of 'too-bullish territory'....Warren Buffett has nowhere to go....George Soros gets bearish in a big way....David Tepper is 'on guard'....Paul Singer warns of an ETF crisis."

Corruption Rises as Economic Freedom Falls -FEE
"Today, high levels of political corruption remain one of the major problems people confront around the world. While most of us think of such corruption as primarily impacting the hundreds of millions who live in the underdeveloped and developing parts of the globe, it touches those of us fortunate enough to live in the industrially developed Western democracies....According to Transparency International many of the least corrupt nations around the world are in the European Union and North America. In fact, Denmark ranks the least corrupt worldwide, followed by New Zealand. Among the remaining top ten of least corrupt countries are: Finland, Sweden, Switzerland, Norway, Singapore, the Netherlands, Canada and Germany. All of them have scores of 80 or better on TI’s scale of 100 having zero corruption. The United States, however, is only ranked 18 with a score of 74....The most corrupt nations of the EU, perhaps not surprisingly, are in Eastern Europe, in those countries that had been part of the former Soviet bloc. Poland only scored 62, followed by Slovenia (61), Lithuania (59), Latvia (57), Czech Republic (55), Slovakia (51), and Hungary and Romania (58)....The most corrupt countries on the planet, according to TI, are Somalia (10), South Sudan (11), North Korea (12), Syria (13), Yemen (14), Sudan (14), Libya (14), and Afghanistan (15)....The smaller the range of government activities, the smaller the incentive for citizens to bribe government officials."

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8.8.17 - Boomers Refusing to Sell Homes

Gold last traded at $1,262 an ounce. Silver at $16.38 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday amid upbeat jobs data which boosted the buck. U.S. stocks traded near flat-line despite upbeat earnings and economic data.

Gold prices lifted as dollar softens -Marketwatch
"Gold futures rose on Tuesday as the U.S. dollar retreated, giving dollar-pegged commodities a modest lift in early trade....Although the dollar has climbed 0.5% so far this month, the currency gauge is down 2.8% over the past 30 days, underscoring the greenback’s recent downtrend amid doubts about the pace of economic growth in the U.S., including signs of weaker-than-hoped-for inflation. The uncertain economic picture leaves financial markets wondering if the Federal Reserve will raise interest rates again this year. A softening dollar can make assets linked to the currency more attractive to buyers using weaker currencies. Tuesday’s rise for metals also comes amid heightened geopolitical risk, headlined by rising tensions between the U.S. and North Korea and its nuclear aspirations."

debt ceiling The Debt-Ceiling Crisis Is Real -NewYorkTimes
"Sometime in October, the United States is likely to default on its obligation to pay its bills as they come due, having failed to raise the federal debt ceiling. This will cost the Treasury tens of billions of dollars every year for decades to come in higher interest charges and probably trigger a severe recession. The debt ceiling is politically imposed, and the decision not to raise it, and therefore to choose to default, is also political. It’s something America has avoided in the past. This time, though, will be different....What’s different in 2017? First, the administration is confounded by inexperience, incompetence and infighting....The second problem: Without a firm signal from the White House that the debt ceiling should not be held hostage to political agendas, it will be hard to get Congress to do the right thing....If Treasury hits the ceiling, it has only two realistic responses. Treasury can pay the government’s bills on a first-in, first-out basis, with the wait for payment growing every month, or it can prioritize bills....As a result, the once unassailable credit of the United States will become a perennial hostage to politics, and in response the debt markets will demand much higher interest rates."

Credit Card Debt Just Hit a Disturbing Record of $1.02 Trillion -TheStreet
"Americans' outstanding credit card debt just hit a new record at $1.0217 trillion, the Federal Reserve disclosed Monday. The previous record was set about a decade ago, according to Bankrate. 'This record should serve as a wake-up call to Americans to focus on their credit card debt. Even if you feel your debt is manageable right now, know that you could be one unexpected emergency away from real trouble. Get that debt paid down while things are good so you can be better prepared if things turn for the worse,' said Matt Schulz,'s senior industry analyst. 'We simply can't keep taking on credit card debt forever without it causing major problems. This record probably won't be a major tipping point, but it likely isn't too far off.' So much for lessons learned from the Great Recession."

Baby Boomers Who Refuse to Sell Are Dominating the Housing Market -Bloomberg
"Millennials are finding themselves out in the cold because building has slowed, and longer-living baby boomers are staying put, setting up a simmering conflict between the two biggest generations in U.S. history. To succeed, buyers and real estate brokers must show uncommon persistence and, at times, diplomacy....People 55 and older own 53 percent of U.S. owner-occupied houses, the biggest share since the government started collecting data in 1900, according to real estate website Trulia. That’s up from 43 percent a decade ago. Those ages 18 to 34 possess just 11 percent....'The system is gridlocked,' says Dowell Myers, a professor of urban planning and demography at the University of Southern California. 'The seniors aren’t turning over homes as fast as they used to, so there are very few existing homes coming online. To turn it over, they’ll have to have a landing place.'"

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8.7.17 - Will Sanctions Stop North Korea?

Gold last traded at $1,264 an ounce. Silver at $16.25 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Monday on mixed signals and a flat dollar. U.S. stocks reached fresh highs on upbeat earnings despite political gridlock and rising geopolitical uncertainty.

China Gold reserves to surpass 4,000 tons -GlobalTimes
"China's burgeoning gold reserves, which some analysts estimated to have surpassed 4,000 tons as of June, reflects the nation's plan to diversify its reserves away from US dollars at a time when the dollar's value has plummeted, as well as to strengthen the country's standing in the global financial market, experts said. Although the People's Bank of China (PBC), the country's central bank, has not publicly disclosed plans to increase gold reserves since October 2016, some market analysts, based on calculations on domestic gold output and imports in recent years, estimated that the country's above-ground gold reserves totaled 20,193 tons as of June, according to a report published by domestic industry website over the weekend....Chinese investors' enthusiasm for purchasing gold remains unabated, as downward pressure on the yuan continues and the property market in first- and second-tier cities cools, said another report published by the World Gold Council in July....China has in its rapid economic growth accumulated enough dollars to maintain its trade account, and the country is now looking to diversify its portfolio to avoid potential risks, such as the devaluation of US dollar, the largest reserve currency in the domestic market, experts noted."

eclipse Are You Prepared for an “Economic Eclipse”? -PontificationBlog
"The nights of August 10-13 will show that our calendar is actually a map, and that these dates are places in Earth’s annual orbit where we splash through a river of stardust left by the comet Swift-Tuttle. You should be able to see at least one shooting star per minute during these nights. Ancient peoples believed that these heavenly messengers passed through a window that opened in heaven, and that a prayer or wish said at that moment could reach heaven before that window closed....As noted in Craig R. Smith’s new free study of recent economic cycles, Crisis Timeline, our lives are influenced by more than the cycles of day and night, and of summer and winter. Scientists and analysts have discovered many such cycles that invisibly shape our world, from climate change to the rise and fall of economic markets. To see the future, look for the cycles....'This is one of the worst convergences of negative forces in centuries! It could potentially batter the United States socially and economically. For the unprepared, it could be a disaster. For those who are prepared, it could be a huge opportunity,' Smith’s study warns." -Full story

Can China or UN Sanctions Stop North Korea? -FoxBusiness
Swiss America Chairman Craig R. Smith and D.R. Barton of Money Map Press discuss with Coast to Coast guest host Connell McShane whether or not China signing onto UN sanctions against North Korea will be able to stop "madman" Kim Jong-un's vow to strike the U.S. with "thousands-fold" revenge following proposed new economic sanctions. Watch video

The Transformation of the ‘American Dream’ -Schiller/NewYorkTimes
“'The American Dream is back.' President Trump made that claim in a speech in January. They are ringing words, but what do they mean? Consider that the phrase, the American Dream, has changed radically through the years....Conflating the American dream with expensive housing has had dangerous consequences: It may have even contributed to the last housing bubble, the one that led to the financial crisis of 2008-9....But that wasn’t what the American Dream entailed when the writer James Truslow Adams popularized it in 1931, in his book 'The Epic of America.' Mr. Adams emphasized ideals rather than material goods, a 'dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to his ability or achievement.' And he clarified, 'It is not a dream of motor cars and high wages merely, but a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and recognized by others for what they are.'....In the 1970s and ’80s, home builders used it extensively in advertisements...many people came to associate the American Dream with homeownership, with some unfortunate results....The last decade has shown that with a little encouragement, many can easily become excessively lustful about homeownership and wealth, to the detriment of our economy and society."

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8.4.17 - Why Central Banks Fear Gold

Gold last traded at $1,264 an ounce. Silver at $16.63 an ounce.

NEWS SUMMARY: Precious metal prices fell back Friday on profit-taking and a firmer dollar. U.S. stocks touched fresh record highs after jobs data beat expectations.

Central Bank Fear Of Gold Is In The Air -InvestmentResearchDynamics
"Wednesday evening at 7:06 EST, at one of the least liquid trading periods of the 23 hour trading day for Comex paper gold, a 'motivated' seller unloaded 10,777 August gold contracts into the CME’s Globex trading system, knocking the price of gold down $9 in 25 minutes. There were no obvious news or events reported that would have triggered any investor to dump over 1 million ozs of gold with complete disregard to price execution. Rather, the selling was the act of an entity looking to push the price of gold a lot lower in 'shock and awe' fashion....The 'flash crash' and 'open interest inflation' are two of the obvious signals that the western Central Banks/bullion banks are worried about the rising price of gold. The recent degree of blatant manipulation reflects outright fear. I suspect the fear is derived from two sources. First is a growing shortage of physical gold that is available to deliver into the eastern hemisphere’s voracious import appetite....The second reason for the banks to fear a rising price of gold: the inevitable collapse of the largest financial bubble in history inflated by Central Bank money printing and credit creation. The trading action in the gold and silver markets resembles the trading activity in 2008 leading up to the collapse of Lehman and the de facto collapse of Goldman Sachs."

s&p Melting Venezuela Is The Real Shock Risk For Global Markets -Forbes
"Venezuela is in a humanitarian, political and economic crisis - led by what the U.S. administration has officially called a dictator. Trump recently slapped sanctions on the Venezuelan President (freezing his U.S assets) and is said to be considering oil sanctions. Ninety-five percent of export revenues in Venezuela come from oil. The country is already on default watch (with the probability of default in the next 12 months running better than 60%). And oil sanctions would almost certainly trigger default....The thing is, sovereign debt defaults tend to be contagious. When you get a default of what was, at one time, the richest country in South America, there will be collateral damage....And then we have exposures to Venezuelan sovereign debt to be concerned about - that would include other sovereigns, hedge funds, banks and oil companies. All of this as the VIX (implied volatility on stocks) sits at pre-crisis levels. Something to keep a close eye on."

Greenspan's new bond bubble warning -CNBC
"As he's warning about a current bond bubble, former Federal Reserve Chairman Alan Greenspan told CNBC on Friday that it's fair to characterize it as an 'irrational exuberance' type forecast. The reference to 'irrational exuberance' - the two words Greenspan is most famous for - hearkens back to remarks he delivered at a 1996 American Enterprise Institute dinner....In December 2008, hoping to boost the economy, Fed officials also embarked on a series of bond-buying programs, which eventually swelled the Fed's balance sheet to the current $4.5 trillion. Only now is the Fed talking about how to wind down its portfolio of assets. In making his forecast on bonds, Greenspan said Friday he's learned from the past. 'It's a disturbing process because you have to be terribly careful with your words,' he added, stressing he's not putting any time frame on it."

A Dim Outlook for Trumponomics -Roubini/ProjectSyndicate
"Now that US President Donald Trump has been in office for six months, we can more confidently assess the prospects for the US economy and economic policymaking under his administration. And, like Trump’s presidency more generally, paradoxes abound. The main puzzle is the disconnect between the performance of financial markets and the real. While stock markets continue to reach new highs, the US economy grew at an average rate of just 2% in the first half of 2017 – slower growth than under President Barack Obama – and is not expected to perform much better for the rest of the year. Stock-market investors continue to hold out hope that Trump can push through policies to stimulate growth and increase corporate profits....The administration’s inability to execute on the economic-policy front is unlikely to change....It is little wonder that actual and potential growth is stuck at around 2%. Yes, inflation is low, and corporate profits and stock markets are soaring. But the gap between Wall Street and Main Street is widening. High market valuations that are fueled by liquidity and irrational exuberance do not reflect fundamental economic realities. An eventual market correction is inevitable."

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8.3.17 - Is Dow at 22,000 a Good Thing?

Gold last traded at $1,274 an ounce. Silver at $16.63 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded mostly lower as the Dow hovered ominously around the 22,000 level.

Gold: Who Was Buying in 2Q? -Barrons
"The World Gold Council's second quarter Global Demand Trends is out and shows ongoing interest from European and U.S. ETF investors, while Chinese fund investors' love affair with the precious metal appears to have dulled for the moment....Gold-backed ETFs enjoyed a 56 ton increase in assets under management in the quarter, with holdings of ETFs reaching 2,313 tons in June - the highest level since October last year....Chinese demand for bars and coins was strong in the second quarter, rising 56% from the same time last year....Indian coin and bar demand rose 46% year-on-year in the second quarter, while demand in Turkey rose to the highest level since 2013....Central banks were active, increasing their purchases by 20% year-on-year to 94.5 tons. Russia's central bank continued to be an active buyer."

Craig R. Smith Craig R. Smith Explains Classic Gold Double-Play - SwissAmericaVideo
Swiss America founder Craig R. Smith explains why he feels strongly that early American $20 gold pieces represent the best value in the gold market today. Mr. Smith refers to this two-fold opportunity as a "classic double-play". Watch now to find out why. To discuss this limited-time opportunity in detail, please call a Swiss America representative at 800-289-2646 or register here.

Why Dow 22,000 is not good news for most Americans -Nutting/Marketwatch
"The U.S. stock market hit another record Wednesday, with the Dow Jones Industrial Average surpassing 22,000 for the first time. The media acted like Dow 22,000 is a good thing. The cheerleaders in the anchor desks are wearing goofy hats and high-fiving each other like their team just won the Super Bowl. But record-high stock prices are not inherently a good thing. Whether it’s good for you individually depends on whether you own lots of shares or not....About half of all equity is owned by the richest 1 million or so families, and another 41% is owned by the rest of the top 10%. The bottom 90% of families own about 9% of outstanding shares....For the bottom 50% of families by income, only about a quarter had any equities....High prices are good for the people who are selling, and not good for the people who are buying. If you are trying to save for your retirement, high prices are terrible. Your dreams just got further away. High stock prices are particularly bad for young people....So spare me your celebrations of another milestone on Wall Street."

Trump Budget Full of Spending Increases -Stossel/Reason
"Proponents of government spending warned of a budget full of cuts, but that's not what happened. Remember President Trump's 'terrible' budget cuts? 'Promises Little but Pain,' warned The New York Times. 'Harsh and shortsighted,' cried The Washington Post. Then Congress passed a budget. President Trump signed it. Do you notice the 'pain'?....Trump called for a $4.7 billion dollar cut to the Agriculture Department. Congress increased the department's appropriation by $12.8 billion. He called for a $15 billion cut to Health and Human Services. Congress instead gave them $2.8 billion more. Trump wanted a $6.2 billion cut to Housing and Urban Development. Congress gave HUD a half-billion-dollar increase. Trump wanted the Commerce Department's budget cut by $1.4 billion. Congress made no cut. And so on. Why wasn't that news? Because in Washington, and in the media's eyes, spending increases are expected. And cuts are always 'terrible.' America continues on its road to bankruptcy."

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8.2.17 - Amazon: the New Tech Crash

Gold last traded at $1,278 an ounce. Silver at $16.73 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 6-week highs Wednesday on a slightly firmer dollar. U.S. stocks traded mixed as the DJIA touched 22,000 amid upbeat Apple earnings.

Is now the time to get back into gold? -CNBC
"In a technical sign of strength, gold is now trading well above its 50- and 200-day moving averages. 'We see a little bit of a wake-up in risk,' said Max Wolff, market strategist at 55 Institutional, who believes the yellow metal will see more of a bid going forward....DoubleLine Capital CEO Jeffrey Gundlach told Reuters that he has exposure to gold, and forecast that gold would rise as 'gold looks cheap compared to markets that have rallied a lot, including bitcoin and including Amazon.'....The yellow metal has 'a lot to go on the upside' if relative weakness in the U.S. dollar persists, wrote Pete Boockvar, chief market analyst at The Lindsey Group."

markets What Does Dow 22,000 Even Mean? -Barrons
"Barely six months after it crossed the 20,000 mark, the Dow hit 22,000 on Wednesday morning, before pulling back slightly. It’s another milestone that might not mean much for your portfolio, but it is symbolic of the enormous bull run the market has enjoyed since 2009....The DJIA is a 'price-weighted' index, which means that it is calculated by adding up the 30 companies’ stock prices and then dividing them by a magic number called the Dow Divisor....Because it is price-weighted, stocks with a higher price carry a greater weight in the index. For example, A 10% change in 3M’s $204 stock will add more points to the Dow than a 10% change in Cisco’s $31 stock. Why did the Dow just smash through another record? Promise of regulatory and tax reform: President Trump and the Republican party have campaigned on business-friendly policies such as a lower corporate tax rate and softer regulations. If successfully implemented, investors believe that corporate earnings will increase....The number 22,000 itself is a relatively meaningless milestone and isn’t technically any different than the DJIA hitting 21,756 or 22,011."

Amazon is the New Tech Crash -Stockman/DailyReckoning
"During the last 31 months the stock market mania has rapidly narrowed to just a handful of shooting stars. At the forefront has been, Inc., which saw its stock price double from $285 per share in January 2015 to $575 by October of that year. It then doubled again to about $1,000 in the 21 months since. By contrast, much of the stock market has remained in flat-earth land. For instance, those sections of the stock market that are tethered to the floundering real world economy have posted flat-lining earnings, or even sharp declines, as in the case of oil and gas....At the March 2000 peak, Microsoft’s PE multiple was 60X, Intel’s was 50X and Cisco’s hit 200X. Those nosebleed valuations were really not much different than Facebook today at 40X, Amazon at 190X and Netflix at 217X. The truth is, even great companies do not escape drastic over-valuation during the blow-off stage of bubble peaks. Accordingly, two years later the Four Horseman as a group had shed $1.25 trillion or 75% of their valuation....Needless to say, I do not think AMZN is a freakish outlier. It’s actually the lens through which the entire stock market should be viewed because the whole enchilada is now in the grips of a pure mania."

2017's Dollar Collapse Is The Worst Start Since 1985 -Zero Hedge
"The USD is off to its worst start since 1985, down about 9%...Of course, 1985 was the worst year for the USD in almost 40 years, so if we stay on the current path, expect the USD to drop another 10% from here. The weak USD is setting up a possibly profitable rotation out of US equities into longer dated US Treasuries....If the USD falls back into the 80s, shorter dated TIPS yields could easily fall back into negative territory. This could be what gold is sniffing out. Since 2003, gold has exhibited a -87% correlation to 10-year TIPS yields."

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8.1.17 - Political Drama Hits Dollar Hard

Gold last traded at $1,279 an ounce. Silver at $16.76 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying amid downbeat economic data. U.S. stocks touched fresh highs with utilities and financials leading.

Gold shows solid performance in July -Mining
"A struggling dollar and serious doubts about whether or not the U.S. Federal Reserve will raise interest rates again this year sent gold to its highest point in almost seven weeks....This means that the precious metal showed a strong performance in July, as it is on course for a 2.1 per cent rise this month....Quoted by Reuters, Commerzbank analyst Eugen Weinberg explained that geopolitical tensions and internal uncertainty could mean a stronger demand for gold as the U.S. currency falls into its lowest in 16 months against a basket of currencies."

Gold prices started the year at $1,150/oz. Today gold prices are near $1,275, an 11% rise. The S&P stock index is currently up 10.4%. So gold is performing at the same level as most stocks in 2017, without much fanfare. Bottom line: Now is the time to take some profit out of the risky Wall Street casino and move it into the safety of physical gold coins - an asset you can hold firmly in your own two hands.

PCGS The first US coin could have been held by Alexander Hamilton -CNBC
"Old inns along the Revolutionary War trails boast of George Washington sleeping there. But coin experts say they have found the first silver piece minted by the United States - one likely held by the most en vogue of Founding Fathers, Alexander Hamilton. David McCarthy figured the silver coin had to be one-of-a-kind after spotting it in the auction catalogue....McCarthy staked his company's money to buy the coin for $1.18 million at the 2013 auction. After nearly four years of late nights sifting through the papers of the Founding Fathers and studying the beading on the coin's edges, he is now making an exhaustive case that this silver piece is indeed the first American coin, the precursor of what ultimately would circulate a decade later as the U.S dollar. The coin is on display this week at the World's Fair of Money in Denver....In terms of the coin's possible value, Jeff Garrett, president of the American Numismatic Association, said the closest comparison was a 1794 silver dollar that sold for more than $10 million four years ago. But the allure of coins isn't just their rarity or metal content but the history that comes embedded to them as they pass through the ages. 'People always ask, how could a coin be worth a $1 million or $5 million?' Garrett said. 'I always say it's because of the stories.'"

Should stock investors pocket gains and run? -USAToday
"It has been a good year for large-company U.S. stocks. So good in fact that investors could exit the market now and still pocket gains that are bigger than the average historical gains for an entire year. The Standard & Poor’s 500 stock index is up 10.4% so far this year. And that is a bigger return than the average gain of 8.9% since 1950, according to LPL Financial, citing FactSet data....In fact, from 1928 to 2016, the S&P 500 finished a year with positive returns of 5% to 10% only six times, according to an analysis by LPL Financial....The often-cited average annual gain of around 9% makes the market look like a predictable beast. The reality is its performance is difficult to predict."

Political Drama Is Hitting the Dollar Hard -Bloomberg
"President Donald Trump loves to trumpet the record run in U.S. stocks....But he’s hardly tweeted a word about another, less rosy measure of Trump’s America: the U.S. dollar. The greenback has fallen hard on his watch and currency traders are now betting on even more declines....More and more, it’s the political drama in Washington that is taking center stage. And there’s no better place for investors to express their views about how a nation is managing its affairs than the $5.1 trillion-a-day global market for foreign exchange....To be fair, the dollar has also come under pressure from lackluster economic data, which weakened the case for higher interest rates in the U.S. as central banks elsewhere move to tighten. And Trump, on more than one occasion, has talked about wanting a weaker dollar and complained that its strength is a negative for U.S. manufacturing - a key part of his 'America First' agenda....The dollar has slumped more than 8 percent, wiping out the post-election bump and then some. To many, it reflects deepening worries the turmoil embroiling Washington....'We’re going to see continued weakness in the dollar,'” said Kristina Hooper, the global market strategist at Invesco. 'It is very much a vote of confidence, or lack of confidence, in the U.S. economy.'"

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7.31.17 - The Unpayable U.S. Debt Bomb

Gold last traded at $1,268 an ounce. Silver at $16.75 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday amid ongoing geopolitical uncertainty and dollar weakness. U.S. stocks traded mixed as blue chip earnings impressed and tech valuation fears lingered.

Gold hits highest in nearly 7 weeks on struggling dollar -Reuters
"Gold hit its highest in almost seven weeks on Monday, boosted by a struggling dollar and U.S. economic data that has cast doubt on whether the Federal Reserve will raise rates again this year....'Dollar weakness is driving the gold price. It's not just against the euro, it's against most major currencies,' said Commerzbank analyst Eugen Weinberg. 'U.S. politics is a mess and U.S. data has not been inspiring.' A U.S. currency near 13-month lows against a basket of currencies makes dollar-denominated gold cheaper for holders of other currencies, which could mean stronger demand. Analysts said decelerating wage growth and subdued inflation have weakened the case for another rate rise this year. The Fed has raised rates twice this year....'We think that there is more upside on gold,' said INTL FCStone analyst Edward Meir in a note. 'A combination of a weaker dollar and falling U.S. bond yields should propel the precious metal higher, with North Korea being a wild card.'"

debt bomb The Unpayable Debt Bomb -PontificationBlog
"America’s combined government and personal debt just hit $41 Trillion, equivalent to $329,961.35 per household – the greatest debt of a nation and its people in human history. But why worry? Treasury Secretary Steven Mnuchin says that by September 29th the government will run out of money and be unable to pay its bill. But by then Congress - unable to reduce its addictive spending - will raise the debt ceiling so politicians can borrow and print trillions more....Roughly 70 percent of America’s Gross Domestic Product (GDP) comes from consumer spending, and most of the rest comes from government spending. With infinite credit, what could go wrong? In this human-made Eden of ever-expanding credit, some have begun to notice odd things. Why has the credit card company VISA started bribing merchants to accept only plastic, and never cash, in customer payments? Banking giant JPMorgan Chase, reports ZeroHedge, 'has banned cash payments for credit card debt, mortgages, and car loans. It has also banned the storage of "any cash or coins" in safe deposit boxes.' Your bank is now required to spy on you by the government." Full story

Next up: Fractured Republicans will face debt ceiling vote -AmericanThinker
"After failing to pass Obamacare repeal before leaving for their August recess, congressional Republicans will return after Labor Day with a deadline looming to raise the debt ceiling. There will be only 12 working days for Congress after members return to deal with the issue. Treasury Secretary Steven Mnuchin sent a letter to members warning that unless action is taken to raise the debt ceiling by September 29, the government will not be able to meet all of its financial obligations. Wall Street Journal: 'The Treasury Department has been employing cash-conservation measures since March, when borrowing hit the formal ceiling of nearly $20 trillion. Those measures are expected to run out in early to mid-October. When they do, the government won't have money to pay interest on debt, write Social Security checks or make millions of other routine payments, unless it can tap credit markets for borrowing to raise additional cash. Missing payments could send financial markets in a tailspin.'....Democrats will not bail Republicans out of this mess - and a mess it is almost certain to be. If you thought Obamacare repeal was a debacle, wait until the factions start lining up to support or oppose a debt ceiling increase."

Will Your Retirement Be At The Center Of America's Next Financial Crisis? -Forbes
"A few weeks ago United Parcel Service announced freezing its pension plans for nonunion staffers, or about 20% of its 434,000 workers worldwide. The freezing of Defined Benefit (DB) plans has become commonplace across America. According to Willis Towers Watson, in 2014 only 35% of Fortune 500 companies with DB plans still had open plans, down from a 50% open number just four years earlier in 2010....In a recent study from the Economic Policy Institute entitled 'The State of American Retirement- How 401(k)s have failed most American workers,' Morrissey writes that retirement account savings has stagnated or declined in the new millennium as traditional pension coverage has continued to decline."

Treasury Department Ending Ineffective Retirement Program -Free Beacon
"The Treasury Department is ending an ineffective Obama program that promised to help millions of Americans save for retirement, the government announced Friday. Treasury announced the myRA program would be phased out, after costing taxpayers $70 million though few Americans used the program....Former president Barack Obama used his 2014 State of the Union address to launch the myRA program, with a promise to 'help millions' to save for retirement. Two years later, only 20,000 had signed up....A review of the program by the Trump administration found that 20,000 accounts have a median balance of only $500. An additional 10,000 accounts had no money in them at all....The program has cost taxpayers $70 million since 2014, and participants have contributed $34 million to their accounts."

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7.28.17 - Markets Become Even More Absurd

Gold last traded at $1,269 an ounce. Silver at $16.74 an ounce.

NEWS SUMMARY: Precious metal prices rose to fresh 6-week highs Friday amid ongoing dollar weakness. U.S. stocks fell as Amazon dragged the tech sector lower.

Gold hits fresh 6-week high, data dampens rate hike expectations -Reuters
"Gold prices rose to a six-week high on Friday after weaker than expected U.S. inflation dampened expectations that the U.S. Federal Reserve will aggressively raise interest rates. Data on U.S. second quarter gross domestic product (GDP) and labor costs also pushed the dollar lower, making bullion more expensive for holders of other currencies.'It showed a big fall in annual inflation rates across the board ... so there is no urgency for the Fed to raise interest rates,' said Commerzbank analyst Carsten Fritsch. Gold is sensitive to rising rates because they push up bond yields, making non-yielding gold less attractive, and tend to boost the dollar....The dollar has weakened for five consecutive months, which together with short-covering has helped gold gain around $60 since early July, said Julius Baer analyst Carsten Menke."


Obamacare Repeal Collapses as Senate GOP Blocks Health Bill -Bloomberg
"A months-long effort by Senate Republicans to pass health-care legislation collapsed early Friday after GOP Senator John McCain joined two of his colleagues to block a stripped-down Obamacare repeal bill. 'I regret that our efforts were simply not enough, this time,' Senate Majority Leader Mitch McConnell said on the Senate floor after the vote. 'This is clearly a disappointing moment.' 'It’s time to move on,' he added after pulling the bill from the floor. The decision by McCain to vote no came after weeks of brinkmanship and after his dramatic return from cancer treatment to cast the 50th vote to start debate on the bill earlier this week....'3 Republicans and 48 Democrats let the American people down, As I said from the beginning, let ObamaCare implode, then deal. Watch!' President Trump wrote on Twitter at 2:25 am Washington time."

Q2 GDP Misses, Q3 2016 - Q1 2017 All Revised Lower, Core PCE Tumbles -Zero Hedge
"In the latest double negative whammy for the economy, not only did Q2 GDP print fractionally less than expected, at 2.6% vs consensus expectations of 2.7%, but Q1 GDP of 1.4% was also revised slightly lower, from 1.4% to 1.2%, while the Fed's favorite inflationary metric, core PCE, tumbled from a downward revised 1.8% to 0.9%. PCE rose 2.8% and was the biggest contributor to growth. Business investment, net exports and federal government spending were also positive. Inventories, residential investment and state and local government spending were drags on growth....The second-quarter increase in real GDP reflected increases in both consumer spending on goods and services as well as increases in business investment, exports, and federal government spending. The increase in consumer spending was led by increases in housing and utilities, health care, and recreational goods and vehicles."

The Markets Become Even More Absurd -MauldinEconomics
"Financial newsletters are now stuffed with bubble porn—their favorite subject is complaining about how overpriced everything is. As a financial writer, it’s tough to stay fresh when that’s all there is to talk about....As an investor, you have to decide: Am I a value investor? Am I a growth investor? Momentum? Macro? Distressed? The point is, you pick a style and you stick to it. For most people, it is when you have style drift that you get into trouble. Take distressed investors, for instance. You could go years without seeing any opportunities. When you get outside your comfort zone and start looking at stuff that is not distressed, that is when the trouble starts. Chances are you did not pick your investing style. It is a feature of your personality, and it has always been with you. My investing career started in a bubble, and I was skeptical of the bubble from the very beginning. That skepticism has served me well, for the most part. I have missed out on some opportunities, but I have avoided some big crashes. Assuming I am talking to mostly value folks here, let me ask the question: How long are you going to have to wait? Possibly a while...Sitting around and watching this every day is just agonizing. But every day things get a little sillier, and dreams get a little bigger."

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7.27.17 - Why Corrupt Bankers Avoid Jail

Gold last traded at $1,260 an ounce. Silver at $16.57 an ounce.

NEWS SUMMARY: Precious metal prices steadied near 6-week highs Thursday on expectation of further dollar weakness. U.S. stocks pulled back despite upbeat earning reports as tech investors decided to take profits.

Gold rises to six-week high as dollar drops after Fed statement -Reuters
"Gold rose for a second day on Thursday, hitting a six-week high as the dollar dropped to a 13-month low after the U.S. Federal Reserve indicated it would keep to a slow path of monetary tightening. The Fed's statement followed a two-day policy meeting that ended on Wednesday where the central bank kept interest rates unchanged but expected to start winding down its massive holdings of bonds 'relatively soon'. The decline in the greenback is a boon for dollar-denominated gold since it makes buying the metal less expensive for investors paying in other currencies. 'We think that gold has turned something of a corner and may now be in a position to retest its recent highs,' said INTL FCStone analyst Edward Meir. 'With the Fed now likely on hold at least till the end of the year and U.S. bond yields falling, there are some forming tailwinds that should propel prices higher over the short term,' Meir said."

dollar The Dollar's Slow Demise Continues in Plain Sight -DailyReckoning
"'The end of the world’s present monetary system is already taking place,' says one of Mexico’s leading, hard-money economists, Hugo Salinas Price. 'The U.S. is losing influence in the world… The end of the dollar as the basis of the international monetary system means the end of the U.S. as we have known it.' You may or may not know of Salinas Price, but he’s a serious player at high monetary levels....He’s a Mexican business magnate and founder of the Mexican retail chain, Elektra. He also happens to be a historian of money. According to Salinas Price, 'The present monetary system of the world, based on the dollar, is on its death-bed. A fiat currency - such as the dollar - cannot be replaced by another fiat currency,' he explains. 'Therefore, the world will necessarily have to take up (precious metals) as the world’s money.'....Gold and silver are making a monetary comeback. We’re fast approaching a new monetary tipping point. The next global trading system is already setting up, in plain sight, as long as you follow the facts and note who is buying gold bars, and where that metal is heading. What can the individual investor do? Well, if you don’t hold physical precious metal, get some."

Why Corrupt Bankers Avoid Jail -NewYorker
"Prosecution of white-collar crime is at a twenty-year low. In the summer of 2012, a subcommittee of the U.S. Senate released a report so brimming with international intrigue that it read like an airport paperback. Senate investigators had spent a year looking into the London-based banking group HSBC, and discovered that it was awash in skulduggery. According to the three-hundred-and-thirty-four-page report, the bank had laundered billions of dollars for Mexican drug cartels, and violated sanctions by covertly doing business with pariah states. HSBC had helped a Saudi bank with links to Al Qaeda transfer money into the United States....In the years since the mortgage crisis of 2008, it has become common to observe that certain financial institutions and other large corporations may be 'too big to jail.'....Although fines were paid, and the Financial Crisis Inquiry Commission referred dozens of cases to prosecutors, there were no indictments, no trials, no jail time. Passing on one investigation is understandable; passing on every single one starts to speak to something else....Corporate deviance may have become so routine that even pleading guilty to a felony is no big deal. What had once been described as a badge of ignominy that could put a company out of business was now just a bit of unpleasantness: a passing hassle, like a parking ticket."

U.S. indicts suspected Russian 'mastermind' of $4 billion bitcoin laundering scheme -Reuters
"A U.S. jury indicted a Russian man on Wednesday as the operator of a digital currency exchange he allegedly used to launder more than $4 billion for people involved in crimes ranging from computer hacking to drug trafficking. Alexander Vinnik was arrested in a small beachside village in northern Greece on Tuesday, according to local authorities, following an investigation led by the U.S. Justice Department along with several other federal agencies and task forces....They alleged Vinnik and his firm 'received' more than $4 billion in bitcoin and did substantial business in the United States without following appropriate protocols to protect against money laundering and other crimes. U.S. authorities also linked him to the failure of Mt. Gox, a Japan-based bitcoin exchange that collapsed in 2014 after being hacked. Vinnik 'obtained' funds from the hack of Mt. Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange he owned, they said in the statement."

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7.26.17 - Political Turmoil Weakening the US Dollar

Gold last traded at $1,260 an ounce. Silver at $16.66 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday after dovish comments by the Fed further weakened the U.S. dollar. U.S. stocks rose after Fed leaves rates unchanged.

The 'mother of all bubbles' keeps gold in focus -Holmes/BusinessInsider
"Since the start of the year, the five-year Treasury yield, adjusted for inflation, has risen about 150 percent. Normally this would put remarkable pressure on the price of gold - higher yields raise the opportunity cost of buying gold - but over the same period, the U.S. dollar has steadily weakened and is now officially in a bear market. Because gold is priced in dollars, this has been supportive for prices. Year-to-date, the yellow metal is up more than 8 percent....That gold is still holding at its current level - despite rising rates, despite a stock market that continues to rally - is encouraging....Gold’s medium- to long-term investment case, I believe, looks even brighter. Many unsettling risks loom on the horizon - not least of which is a record amount of global debt - that could potentially spell trouble for the investor who hasn’t adequately prepared with some allocation in a safe haven....Some are calling this mountain of debt 'the mother of all bubbles,' and we all remember how the last two bubbles ended, in 2000 (the tech or dotcom bubble) and 2007 (the housing bubble)."

Yellen 'Dovish' Fed Admits Inflation Weaker, Says Balance Sheet Unwind To Start "Relatively Soon" -Zero Hedge
"With 'zero' expectations for a rate-hike today, all eyes are focused on any shifts in The Fed's balance sheet normalization timeline ('balance sheet unwind to start relatively soon') and its most-recently-dovish inflation outlook (following the weak June CPI print, The Fed now says 'inflation seen rising to 2%' but is weaker). Key takeaways from FOMC: Balance sheet reinvesting to continue 'for the time being,' normalization plan to begin 'relatively soon' which most sellside desks means a September announcement, leaving December for the next rate hike. Headline and core inflation 'have declined,' and the word 'recently' after this phrase from the June statement is omitted today. This has been taken as confirmation that the Fed admits the recent dip in inflation may extend longer than the Fed expected and is the reason for the sharp drop in the USD."

Stocks are ignoring U.S. political uncertainty, but the dollar isn’t -Marketwatch
"Wondering where political uncertainty is showing up on Wall Street? Don’t look in the stock market - check the dollar. According to experts, the U.S. dollar has become a primary conduit for investors making bets on the political environment. While other asset classes like equities or fixed-income have seen some intraday volatility on the latest headlines coming out of Washington, those moves have been largely short-lived, while the buck is considered a more 'pure play' for the theme, market participants said....The dollar recently dropped to its lowest level since June 2016, and some of the biggest legs downward have followed political developments....'There’s been a direct correlation between politics and the dollar,' said Naeem Aslam, chief market analyst at ThinkMarkets."

Congress Must Pass Big-Bang Tax Reform -Investors
"Many of the ideas that emerge from Washington are stale, unimaginative and unworkable. Not so the latest pitch from a group of conservative congressional Republicans: Eliminate the IRS....It's time to consider the damage that the IRS does both to Americans' freedoms as individuals and to the costs it imposes on the economy as a whole, argue the 151 members of the Republican Study Group, an in-house conservative think tank, in their newest budget proposal. The proposal, an alternative to the House Budget Committee's official 2018 budget, comes as part of a much broader tax reform plan that would leave taxes flatter and fairer for both corporations and individuals than is currently the case....It would move tax collection duties to 'new, smaller and more accountable departments' within the Treasury Department. There would be a tax unit for businesses, one for individuals and families, and another for dispute resolution....Time is running out. Congress should stop kicking the can down the road and pass a sweeping, big-bang tax reform that will make taxes much flatter and fairer, and also get rid of the costly and oppressive IRS behemoth - while they still have the political clout in Congress to do so."

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7.25.17 - Elites Are Privately Warning About A Crash

Gold last traded at $1,252 an ounce. Silver at $16.54 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday ahead of economic clues from Wednesday's Fed statement. U.S. stocks rose on better-than-expected corporate earnings.

Gold retreats from 1-month high as Fed meets -Reuters
"Gold prices retreated from a one-month high on Tuesday as equities gained and the markets awaited clues about monetary policy from the U.S. Federal Reserve, which began its two-day meeting. The market is not expecting an interest rate increase following the Fed's two-day meeting, but it is looking for hints on the timing and extent of future moves....'The market is looking for clarity on the Fed's tightening cycle and when they are going to start with the tapering (of monetary stimulus),' said ETF Securities analyst Martin Arnold....'There is a dual-pronged attraction to gold at the moment, with low interest rates and investors looking at the metal as a hedge against U.S. political uncertainty,' Arnold said. Gold is often seen as an alternative investment during times of political and financial uncertainty."

stocks Wall Street bracing for 'significant correction' -CNBC
"When it comes to both fiscal and monetary policy these days, Wall Street looks to be expecting less. Respondents to the CNBC Fed Survey have marked down their expectations for Federal Reserve rate increases and for fiscal policy stimulus from Congress and the Trump administration. And there's growing worry that the stock market could be set up for a fall. 'Asset markets are very highly priced and investors are complacent,' said Mark Zandi, chief economist of Moody's Analytics. 'The pre-conditions for a significant correction in markets are coming into place.' The 44 respondents to the survey, including economists, fund managers and analysts, unanimously believe the Fed won't hike interest rates at its meeting this week....Respondents also are dialing back what they expect from the Trump administration and Congress....'The Trump trade has evaporated,' said Neil Dutta, head of economic research at Renaissance Macro Research."

The Elites Are Privately Warning About A Crash -Zero Hedge
"Many everyday citizens assume powerful global financial elites operate behind closed doors in secret conclaves, like the scene of a Spectre board meeting in the recent James Bond film. Actually, the opposite is true. Most of what the power elite does is hidden in plain sight in speeches, seminars, webcasts and technical papers. These are readily available from institutional websites and media channels....Mohamed A. El-Erian is a bona fide member of the global power elite...Yet he writes in a fairly accessible style on the popular Bloomberg website. When El-Erian talks, we should all listen. In a recent article he raises serious doubts about the sustainability of the bull market in stocks because of reduced liquidity resulting from simultaneous policy tightening by the Fed, European Central Bank (ECB) and the Bank of England. He says stocks rose on a sea of liquidity and they may crash when that liquidity is removed. This is a warning to other elites, but it’s also a warning to you....what does the head of Singapore's GIC say about markets today? Lim Chow Kiat, CEO of GIC, warns that 'valuations are stretched, policy uncertainty is high' and investors are being too complacent....Meanwhile, the typical American small retail investor probably has 60% or more of her 401(k) in developed economy equities, mostly U.S....The solution to this is to allocate 10% of your investable assets to physical gold or silver. That will be your insurance when the time comes."

Student loan borrowers, herded into default, face a relentless collector: the U.S. -Reuters
"Today, 11 percent of the $1.325 trillion of federal student loans outstanding is severely delinquent or in default, higher than the mortgage default rate at the peak of the foreclosure crisis in 2010, according to data from the Federal Reserve Bank of New York. Some of these debtors are deadbeats, of course, unwilling to make payments they can afford. But many are borrowers of limited means who ended up in default unnecessarily, after Navient and the DOE’s other servicers steered them away from affordable repayment plans and into options that reduce the servicers’ costs, according to state and federal investigators and regulators, consumer advocates and a growing number of lawsuits and complaints filed against loan servicers....Since the summer of 2015, student loan servicers and private debt collectors have garnished about $3 billion in wages, a Reuters review of federal data shows....The number of Americans who have had their wages or Social Security benefits garnished or their tax refunds seized jumped 71 percent in the five years ended September 2015, according to the Government Accountability Office."

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7.24.17 - Credit, Cash & The Coming Crash

Gold last traded at $1,254 an ounce. Silver at $16.44 an ounce.

NEWS SUMMARY: Precious metal prices touched 4-week highs Monday on safe-haven buying and dollar weakness. U.S. stocks traded mixed as tech earnings failed to lift investor sentiment amid rising political and economic turmoil.

Gold hits 4-week high on weaker equities, U.S. dollar -Reuters
"Gold touched a four-week high early on Monday, supported by weaker equities and a dip in the dollar to fresh 13-month lows due to political uncertainty in the United States....The White House said on Sunday that Trump was open to signing legislation toughening sanctions on Russia after Senate and House leaders reached agreement on a bill late last week. U.S. Republican Senate leaders aim to hold a procedural vote as early as Tuesday to take up legislation to repeal or replace Obamacare, but it remained unclear which version of the bill senators would vote on....Hedge funds and money managers increased their net long position in COMEX gold for the first time in six weeks in the week to July 18, U.S. Commodity Futures Trading Commission data showed on Friday."

credit Credit, Cash & The Coming Crash -PontificationBlog
"Between 2003 and 2013, the inflation-adjusted net worth of the typical household plunged by 38 percent, owing largely (but not entirely) to the crisis of 2008-2009 and the huge drop in the prices of homes, which millions had used as appreciating savings and then as their own ATM machines to pay for other things....In 2017, our economy still suffers from the bursting of the housing bubble and its debasement of the homeowner American Dream. The typical American household, reported CBS News, in inflation-adjusted dollars is 'still earning 2.4 percent below what they brought home in 1999.'....As borrowing and debt increase, we also face another problem. Many analysts study recurring patterns in the economy, society, and nature to foresee what soon could be coming. Ominously, many of these theorists are giving the same dire warning – that between now and the end of year 2020, a convergence of negative patterns and the low points of several cycles will hit us all at once. This is one of the worst convergences of negative forces in centuries! It could potentially batter the United States socially and economically. As Craig R. Smith explains in a new Crisis Timeline, this can also be a disaster for the unprepared. But for those who are prepared, it could be a huge opportunity....Globalists are eager to impose a 'cashless' society where everything is credit and debt, where values are easily manipulated, and where all financial transactions are monitored and taxed by government....And if the globalists get their way, an American economic and social crash is inevitable. Full story

The Dollar's Slide Continues -RealClearMarkets
"The US dollar lost ground against all the major currencies, save sterling, over the past week, and also fell against most emerging market currencies. There is little from a technical or fundamental perspective, including next week's FOMC meeting, that suggests a reversal is at hand....What they doubt is that the Federal Reserve will raise interest rates in the face of price pressures that have moderated. The fiscal course of the Trump Administration is also doubted....The Dollar Index fell for a second consecutive week. It has fallen in six of the past seven sessions. The week's 1.25% decline took it blow 94.00, its lowest level since June 2016. This area is important from a technical perspective, and a convincing break could open the door to another 3-5% decline."

America 2017 = France 1789 -Kunstler/Zero Hedge
"We are looking more and more like France on the eve of its revolution in 1789. Our classes are distributed differently, but the inequity is just as sharp. America's 'aristocracy,' once based strictly on bank accounts, acts increasingly hereditary as the vapid offspring and relations of 'stars' (in politics, showbiz, business, and the arts) assert their prerogatives to fame, power, and riches - think the voters didn't grok the sinister import of Hillary's 'it’s my turn' message? What’s especially striking in similarity to the court of the Bourbons is the utter cluelessness of America’s entitled power elite to the agony of the moiling masses below them and mainly away from the coastal cities....The floundering non-elite masses have not learned the harsh lesson of our time that the virtual is not an adequate substitute for the authentic, while the elites who create all this vicious crap spend millions to consort face-to-face in the Hamptons and Martha’s Vineyard telling each other how wonderful they are for providing all the artificial social programming and glitzy hardware for their paying customers....The next big entertainment for them will be the financial implosion of the elites themselves as the governing forces of physics finally overcome all the ruses and stratagems of the elites who have been playing games with money. Professional observers never tires of saying that the government can’t run out of money (because they can always print more of it) but they can certainly destroy the value of that money and shred the consensual confidence that allows it to operate as money. That’s exactly what is about to commence at the end of the summer when the government runs out of cash-on-hand and congress finds itself utterly paralyzed by party animus to patch the debt ceiling problem that disables new borrowing."

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7.21.17 - US Dollar Slide Prompts Gold Spike

Gold last traded at $1,254 an ounce. Silver at $16.45 an ounce.

NEWS SUMMARY: Precious metal prices shot up Friday on safe-haven buying and a sharply weaker dollar. U.S. stocks fell as GE led industrial stocks lower and political uncertainty increased.

Dollar slide sets gold up for biggest weekly rise in two months -Reuters
"Gold was set for its biggest weekly gain in two months on Friday as a surging euro pushed the dollar to its weakest since June 2016, making bullion cheaper for holders of other currencies....Gold is highly sensitive to rising interest rates because they cause bond yields to rise and tend to boost the dollar. The Fed's rate-setting committee is due to meet on July 25 and 26. Gold broke through resistance at its technically important 100- and 50-day moving averages, both around $1,250. 'We look to a break through the 100- and 50-day moving averages as a pivot point for further gains,' MKS PAMP trader Sam Laughlin said in a note."

retirement Another blow for heartland workers: Slashed pensions -CBSNews
"February was a bad month for Larry Burruel and thousands of other retired Ohio iron workers. His monthly take-home pension was cut by more than half from $3,700 to $1,600. Things have been rough in the Rust Belt, but this was a particularly powerful punch in the pocketbook for Burruel, who started in the trade at 19 and worked 36 years before opting for early retirement to make way for younger workers....Burruel and the 4,000 members of his Cleveland Iron Workers Local 17 pension plan are the canaries in the coal mine as far as pension cutbacks go....This cross-section of America includes more than a million former truck drivers, office and factory employees, bricklayers and construction workers who are threatened with cutbacks that could last the rest of their lives...Some would argue that these union workers should have contributed to IRAs because these investments can't be touched. But that wasn't the way these union workers thought....Unfortunately, this is only a glimpse into the future awaiting at least a million pensioners in the Rust Belt and elsewhere."

The Upside and Downside of Liquidity-Driven Markets -Bloomberg
"Over the past few months, government bond yields have fallen, the dollar has weakened and financials have underperformed, yet the major stock indexes are at or very near record highs, as persistently supportive liquidity conditions have more than compensated for policy and growth disappointments. By boosting returns and repressing volatility, ample liquidity is a gift for investors. It makes the investment journey pleasing, comfortable and lengthy. But it is not a destination....With Fed monetary measures already stretched, there has been little policy offset to a soft patch in indicators of household and corporate economic activity. Yet none of this seems to have been reflected in the major stock indexes. All three - the Dow Jones, Nasdaq and S&P - registered more record highs this week...So far, equity investors have experienced an unusually long and fulfilling journey - one that, absent a major accident, could last a little longer. What remains more elusive, however, is confidence that this will end up at an enjoyable destination."

The Federal Reserve May Show Trump No Love -Schiff/RealClearMarkets
"There could be no easier way to undermine the entire Trump presidency than an official bear market to erupt on Wall Street. In that sense, as I have said in a prior commentary, Janet Yellen presents a much greater threat to Trump than does Robert Mueller or Chuck Schumer. Yet despite these warning signs, investors have not yet shown much concern. They still seem to believe that if anything goes wrong, the Fed will provide the bail out. But that is not a risk Wall Street should be eager to test. My guess is that the 'Yellen Put' is still in effect, but the strike price may be much lower than most investors believe, meaning more substantial losses could be required before the Fed acts....How soon before stock market investors connect the same dots? With the Fed not only threatening more rate hikes, but also making noises that it will draw down its balance sheet, which would result in 'quantitative tightening,' U.S. stock market investors should not be getting too comfortable. Instead, the falling dollar and the more positive economic results coming from non-U.S. economies might suggest that a move into long-beaten down foreign markets may be opportune."

Bottom falling out of US dollar -CNBC
"The dollar is crumpling under pressure, and there doesn't appear to be much to stop it. European Central Bank President Mario Draghi was the latest catalyst, sending the euro higher with comments that the ECB would discuss when to start paring back its bond purchases in the fall. While some viewed the central bank president as a bit vague, his words still drove the euro to a near two-year high against the dollar....The dollar's decline Thursday is a continuation of a weakening that started last week after Fed Chair Janet Yellen voiced concerns about low inflation and talked about a lower than historic neutral rate."

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7.20.17 - Cash Blackout: Online Bank Outage

Gold last traded at $1,245 an ounce. Silver at $16.34 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on a sharply weaker dollar and safe-haven buying. U.S. stocks gyrated near flat line as traders weigh corporate earnings and political turmoil.

Gold price recovers as ECB comments lift euro -Reuters
"Gold prices recovered lost ground to edge higher on Thursday after European Central Bank President Mario Draghi said ECB policymakers would discuss potential changes to the bank's bond-buying scheme in the autumn, lifting the euro to session highs. Draghi said the policymakers were unanimous in choosing not to change their guidance for monetary policy, and not to set a date for discussing changes to its stimulus program. That was enough to spark a recovery in the euro after early losses, lifting gold prices....The ultra-low interest rates in place since the last decade's global financial crisis have been a key factor in supporting gold prices in recent years. With the end to that unprecedented monetary stimulus now within sight, financial investors are nervously trying to gauge how big central banks around the globe will unwind unconventional policies that have kept borrowing costs ultra low."

asset forfeiture The Feds Just Expanded Civil Asset Forfeiture 'Laws' Nationwide -Zero Hedge
"When you're a government agency, asking for a tax increase is always a hassle. As Ryan McMaken notes, for the most part, taxpayers don't like taxes, and if asked if they want to pay more, they're likely to often say 'no.'....One such 'hidden' method of seizing wealth from the taxpayers is through what is now called 'civil asset forfeiture.' This occurs when a law enforcement agency seizes the assets - including real estate, cars, cash, and other valuables - from private citizens based merely on the suspicion that the person has committed a crime with the assets in question. No due process is necessary. No conviction in a court of law need occur.... As Reuters reports, the U.S. Justice Department announced on Wednesday that the federal government will reinstate a program that helps local and state law enforcement seize cash and other assets they suspect have been earned from crimes. Local police will now be able to seize cash, often from those suspected of drug crimes, even in states that do not condone the policy....As the colonists understood, if the government can arbitrarily take away your property, you have no true rights: you’re nothing more than a serf or a slave. The Fifth Amendment to the U.S. Constitution was born of this need to safeguard against any attempt by the government to unlawfully deprive a citizen of the right to life, liberty, or property, without due process of law....The time for us to take our constitutional powers back and reinstate self-government is long overdue."

Now is the time to declare financial independence from the government's Secret War on Cash, which continues to escalate daily. Now is the time to take action to protect your future!

Customers shut out of accounts for hours during Bank of America system outage -MiamiHerald
"Bank of America customers were shut out from their accounts for several hours Wednesday in a system outage....On, a website that tracks reports of system outages, reports starting spiking after 11:30 a.m. and the website was inundated with comments from Bank of America customers around the country saying they couldn’t access online banking from their applications or computers, transfer money or deposit money or checks. Customers also reported that several branches’ operations were down. By 1 p.m., the website had received nearly 1,000 reports of problems. But by Wednesday evening, although some customers were still reporting problems, the number of reports had gone down considerably to about 200. Bank of America spokeswoman Jumana Bauwens said Wednesday the bank was aware of the issues with mobile and online banking and is working to fix the problem....When asked what caused the outage, Bauwens said she 'did not have that information.'"

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 White Paper Don’t Bank On It!

Bank Assets Are Ephemeral - Here Today, Gone Tomorrow -GoldSwitzerland
"Fake news and Fake assets are everywhere....We are now in a world where everything becomes electronic entries. Real people are no longer important. We are just all electronic entries in a register. It is the same with money. Money is today totally Fake....Nobody realizes that their money is just an electronic entry that can be turned off in a second by the government. This means that their money will be totally gone and will never reappear again....What everyone with a bank account must understand is that one day there is little or no money left in the bank. ATMs will then be closed and no money will be available. This is an elegant solution to the insolvency of the financial system. No paper money will be available nor any electronic money. Thus, there is no money to be had....Hard assets held directly by the investor reduces the risk. This can be anything from property, farmland, forest or mineral assets...The perfect asset to protect against the risks in the financial system is of course physical gold or silver stored safely outside the system and preferably outside your country of residence."

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7.19.17 - Social Security: Broke in Five Years

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

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

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

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

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

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

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7.18.17 - Why Millennials Dislike Capitalism

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

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

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

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

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