8.10.18 - Prepare For an Inflationary World
Gold last traded at $1,219 an ounce. Silver at $15.32 an ounce.
NEWS SUMMARY: Precious metal prices remained steady despite a sharply stronger dollar. U.S. stocks fell as geopolitical concerns and new tariffs pushed the Turkish lira to a record low against the dollar.
Prepare for an inflationary world -Moneyweek
"Quick quiz: which developed-market country this week reported annual wage growth that was nearly three percentage points above inflation? Believe it or not, it was Japan. Workers in the one country most synonymous with deflation saw their pay packets grow by 3.6% in June, compared with last year. Price inflation - as measured by the consumer price index (CPI) - was just 0.7% in the same month. So that's a real (after-inflation) pay rise of 2.9%. Not bad at all....Why should you care? First, it shows that, even in the apparently most stubbornly deflationary environments, price rises can take hold once the conditions are right....Second, it always takes a long time for investors to get over the last crisis....Recent decades saw several major changes that unleashed disinflation across the world, from China joining the global goods market to the internet's role in keeping prices down. But not only have those trends arguably already peaked, but the shift in the political picture is actively reversing them. Tariffs will make Chinese goods more expensive. Tech companies are prominent - that is, highly taxable - targets for angry voters. So it might be worth spending some time considering how a more inflationary world would affect your money. As Ward puts it: 'Government bonds are unlikely to be the asset that will protect portfolios.' We’d suggest owning at least a little gold."
The Big, Dangerous Bubble in Corporate Debt -New York Times
"The $30 trillion domestic stock market seems to get all the attention...But the larger domestic debt market - at around $41 trillion for the bond market alone - reveals more about our nation's financial health. And right now, the debt market is broadcasting a dangerous message: Investors, desperate for debt instruments that pay high interest, have been overpaying for riskier and riskier obligations. University endowments, pension funds, mutual funds and hedge funds have been pouring money into the bond market with little concern that bonds can be every bit as dangerous to own as stocks. Unlike buying a stock, which is a calculated gamble, buying a bond or a loan is a contractual obligation....For much of the last decade, risk has been mispriced to a staggering degree. In other words, the prices of bonds (and corporate loans) have not accurately reflected the riskiness of the underlying borrower's credit....We must inure ourselves to the inevitable. It may take yet another major financial crisis for things to change, or maybe things will never change. Either way, it's a lesson we never seem to learn until it's too late."
Gold - even at its lowest levels in 2018 - is behaving just as prescribed -Marketwatch
"Gold's sharp decline over the past month serves as little surprise to the investors who want the asset to perform in just this fashion - that is, as an alternative to assets perceived as risky, like stocks. They're betting that the opposite will be true as well, that gold will resume its role as protector and diversifier, even inflation hedge, when what they see as bloated price-to-earnings ratios, heavy debt-to-GDP ratios among major economies and hints of higher inflation finally catch up to the stock market. 'Sure, the opportunity cost of holding gold given where stocks are isn't great, but the long-term reasons to own gold are just as real as they were months ago, as a store of value with low correlation to stocks,' said Adam Strauss, CFA, with Appleseed Capital....'While gold's commodity function (jewelry) is not central to our monetary investment thesis, the fact remains that gold is a key component of most commodity indices,' said Trey Reik, senior portfolio manager with Sprott Asset Management. 'We view gold's early summer performance as incremental evidence of bullion's true portfolio utility,' Reik said. 'Gold is not a magical elixir, but it is a fiercely reliable store of value.'"
Your Future Revealed in George Gilder's 'Life After Google' -Benko/American Spectator
"Google and social media have been in the headlines. So has Bitcoin. Tech guru and conservative economist George Gilder now brings the two together in a fascinating and pertinent way....The blockchain - the virtual 'stuff' of which bitcoin was the pioneering is one of the hottest technologies in the world right now. It's also one of the most controversial....Gilder has seen the future, and it works. Forget the dotcoms. They are yesterday's news. So what are the dots to now connect, early, to survive the next revolution? Gilder steps forth to unravel the enigma of the blockchain, which he compellingly baptizes the 'Cryptocosm.'....Whether you are a veteran of or a newcomer to the blockchain space, Life After Google is likely to prove a revelation and a delight....Gilder meticulously documents how the lack of security is intrinsic to Google's priceless 'system of the world.' 'Pricelessness' may sound pretty wonderful...But it has an Achilles' heel...Gilder, in a personal email, instructs me, 'One of the key flaws of 'free' is it obviates security. No one needs to steal free stuff.' Then Gilder shows how the blockchain - the Cryptocosm - will cure the problem of insecurity baked into Google's System of the World....This is about giving power back to the people....In writing Life After Google, George Gilder has outdone himself. The author of the bible of the Reagan Revolution has now written the bible of the Cryptocosm."
Discover why the restoration of The Gold Standard is the shape of things to come in our detailed book review of Life After Google.
8.9.18 - Economy Booming, Yet Americans Struggle
Gold last traded at $1,219 an ounce. Silver at $15.46 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Thursday despite a firmer dollar. U.S. stocks little changed with the S&P 500 was within striking distance of reaching an all-time high.
Valuing Gold In A World Awash With Dollars -Taylor/Seeking Alpha [Listen]
"History tells us that an ounce of gold has retained 100% of its purchasing power since the Roman Republic. But what price of gold in US dollars should we expect when the Fed responds to the next financial crisis by creating exponentially more dollars out of thin air than the trillions of fraudulent money it created in response to the past financial crisis? Alasdair Macleod opines on that topic, as well as why another financial crisis is inevitable. And he will provide some ideas about how you might protect yourself and your loved ones."
If This Chart Doesn't Scare You Out Of Stocks, Nothing Will -Zero Hedge
"A lot has changed since the stock market crash of 2000. Apple Inc. has gone from being just another computer brand to becoming the most valuable company in the world, Amazon.com Inc. went from being an e-book retailer to a byword for online shopping and Tesla’s Elon Musk has risen from obscurity to Twitter stardom. Yet some things never change and Doug Ramsey, chief investment officer at Leuthold Group, has been on a mini-campaign highlighting the parallels between 2000 and 2018....Price-to-sales ratio is one measure of a stocks value. It isn't as popular as the price-to-earnings ratio, or P/E, but is viewed as less susceptible to manipulation since it is based on revenue. He also shared a chart which he claims is 'unfit for a family-friendly publication' that shows how in terms of median price to sales ratio, the S&P 500 is twice as expensive as it was in 2000. Leuthold Group: 'Overvaluation in 2000 was highly concentrated; today it is pervasive, with the median S&P 500 Price/Sales ratio of 2.63 times more than double the 1.23 times prevailing in February 2000...upward trajectory of the market isn't sustainable,' he warns....On Aug. 22, the market will officially become the longest bull market in history. Coincidentally, the previous titleholder is the decade-long one that gave up the ghost when the tech bubble burst in 2000."
Investors Can't Ignore Gold As Market Is Seriously Undervalued - Murenbeeld & Co -Kitco
"Investors might be hesitant to buy gold in its current state, but one research firm recommends at least watching the asset as there is long-term value in the marketplace. In an interview with Kitco News, Chantelle Schieven, head of research at Murenbeeld & Co, said that her firm couldn't rule out further weakness in the near-term, but she added that the market is extremely oversold, which is unsustainable. Her comments come as the gold market has struggled to find momentum as it remains caught in a four-month downtrend with prices hovering near recent 12-month lows. 'Right now gold is the ultimate contrarian play. You may not want to buy it now, but it's a good time to look at it,' she said. 'We just feel that a turnaround in gold is coming soon.'"
The economy is booming, yet Americans are struggling. An award-winning author explains why -CNBC
"The unemployment rate fell below 4 percent in July, the lowest it's been in nearly two decades. The job market is booming and the economy seems strong. But millions of Americans are still struggling to make ends meet. That's in large part because wages are not keeping up as day-to-day costs continue to soar, according to Alissa Quart, executive director of the Economic Hardship Reporting Project and author of the recently released book, 'Squeezed: Why Our Families Can't Afford America.'....Middle class life is now 30 percent more expensive than it was 20 years ago, Quart writes - and Americans are feeling the squeeze. 'The cost of having kids can seem like Eric Carle's 'The Very Hungry Caterpillar': just like the caterpillar in the classic children's book, your child eats up every dollar you earn,' she writes. Desperation has forced many to take on more work to make ends meet. About four in 10 Americans hold some kind of second job, according to a July Bankrate survey of over 1,000 Americans. Among millennials, that rate is even higher, with over half (51 percent) engaged in some type of side hustle. And even that may not be enough."
8.8.18 - Historic Government Spending Spree
Gold last traded at $1,221 an ounce. Silver at $15.43 an ounce.
NEWS SUMMARY: Precious metal prices steadied Wednesday on a flat dollar. U.S. stocks slipped as China imposed 25% tariffs on $16 billion worth of US goods.
Insure Your Wealth or Lose it All -Egon von Greyerz/GoldSwitzerland
"What should have been a normal cyclical high in the next year or two, is now going to be the most massive implosion of a bubble full of debts and inflated assets. The system has been 'successfully' manipulated for decades by central banks, certain commercial banks, the BIS in Basel and the IMF for the benefit of a small elite....I learned early in life to embrace uncertainty because from this moment on in anybody's life all is uncertain...But the uncertainty today stretches much further than various asset classes....But like many risks, it is fortunately possible to insure against the risk of a banking collapse, the crash of most asset classes and the final destruction of the currency system....Like most elegant solutions, it is so simple that over 99% of investors as well as ordinary people would not even think about it...I am talking about physical gold. It is such a simple and obvious solution to protect against the current risks but still less than 1% of people will consider it."
"Gold at $1,220, adjusted for real inflation, is almost as cheap as it was in 1999 at the $250 low. More importantly, inflation adjusted gold is now very near the 300 year low of 1999. So right now gold is again unloved and undervalued and therefore a bargain. On an inflation adjusted basis, the 1980 high of $850 would today be $16,650....Owning physical gold for wealth protection purposes is the best preserved secret in the West. In this part of the world, virtually nobody holds gold. At the same time, the wise people in the East continue to buy all the gold that is produced annually. China, India, Iran, Turkey, Russia and many more Eastern nations understand history and economics. That is why they are accumulating major gold reserves at these levels. If you understand the 5,000 year significance of gold as the only surviving money in history, you should follow the example of the East."
We'll Never Know How Bad the Federal Reserve Is -Wall Street Journal
"Sen. Rand Paul (R., Ky.) still hasn't persuaded his colleagues to audit the Federal Reserve's conduct of monetary policy. Perhaps lawmakers could simply agree that the Fed should stop destroying documents. 'Borrowed Time,' a history of Citigroup publishing today and co-authored by your humble correspondent and Vern McKinley, finds that the bank was in many ways healthier and more stable during the century when it was independent than during the roughly 100 years it has been supported by the federal government. But the government has been working hard to prevent such stories from being told....For decades now, the government's standard practice has been to warehouse individual examination reports for banks like Citi for 30 years while refusing to release them, citing exemptions under the Freedom of Information Act. After 30 years, the feds then destroy the reports....Citi's troubles in the years following the creation of the Federal Reserve in 1913 are especially intriguing. That's because, for nearly 80 years prior to the creation of a federal backstop, the bank had been rock-solid. Yet by an amazing coincidence the creation of a new government safety net was immediately followed by an era of reckless investment overseas. How will Americans ever fix problems in a federal bureaucracy if we’re never allowed to see them?"
China Retaliates With New Tariffs, Hunkering Down for a Long Trade Fight -Wall Street Journal
"As the U.S. moves forward with plans to impose new 25% tariffs on $16 billion in Chinese goods Aug. 23, Beijing said it will respond in kind on U.S. imports the same day. 'This is very unreasonable,' the Ministry of Commerce said in a statement Wednesday. 'In order to defend China's rightful interests and the multilateral trade system, China has to retaliate as necessary.'....The data came a day after the U.S. said it will start to expand tariffs on additional Chinese imports, including electronics and semiconductors, later this month - the latest salvo in the escalating trade battle between the world's two biggest economies....The Chinese economy faces strengthening headwinds from weakening consumption to slowed production and investment. The yuan has declined by around 6% against the dollar in the past two month - though that is helping some companies caught in the crosshairs of the trade battle....State-run tabloid Global Times, in an opinion piece last week, warned that American brands including Apple Inc. are positioned to become Beijing’s bargaining chips in the trade battle. 'The Chinese market is vital for many top U.S. brands, giving Beijing more leeway to play hardball in the trade conflict,' it said. 'If Apple wants to continue raking in enormous profits from the Chinese markets amid trade tensions, the company needs to do more to share the economic cake with local Chinese people.'"
Get Ready for a Massive Government Spending Spree -NextGov
"A combination of factors will see federal agencies trying to spend as much as 40 percent of their budgets in the final two months of the fiscal year. A government spending spree of potentially historic proportions will play out over the final seven weeks of fiscal 2018, as federal agencies look to spend $140 billion more than they thought they’d get before Congress signed the omnibus spending bill. Without a budget agreement in place, agencies spent cautiously through the first two quarters of fiscal 2018 before the omnibus - signed six months late in March - obligated an additional $80 billion for defense and $63 billion for civilian agencies. Federal agencies, now flush with cash, must obligate that money before the fiscal year ends on Sept. 30 or lose it to the Treasury Department. Analysts believe the federal market will see a monumental effort among procurement officials to spend as much on contracts as possible....Crunching government data from the past five fiscal years, The Pulse analysts determined agencies spent the most on professional, administrative and management support services, averaging around $70 billion in previous fourth quarters."
8.7.18 - Bankruptcy Booms Among Older Americans
Gold last traded at $1,218 an ounce. Silver at $15.35 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks rose as investors shrugged off global trade worries and focused on upbeat earnings.
Wait Until You See The Price Of Gold In Venezuela Right Now -Forbes
"Prices in Venezuela are doubling roughly every 18 days. The International Monetary Fund (IMF) now projects inflation to hit an astronomical 1 million percent by the end of this year. This puts the beleaguered Latin American country on the same slippery path as Zimbabwe a decade ago and Germany in the 1920s, when a wheelbarrow full of marks was barely enough to get you a loaf of bread. Venezuela’s socialist president Nicolas Maduro - who only this past weekend survived an assassination attempt involving several explosive-laden drones - announced recently that the country plans to rein in hyperinflation by lopping off five zeroes from its currency....So where does this put gold? At some point, hyperinflation gets so ludicrously out of control that discussing exchange rates becomes pointless. But as of July 30, an ounce of the yellow metal would have gone for 211 million bolivars - an increase of more than 3.1 million percent from just the beginning of the year....A Venezuelan family that had the prudence to store some of its wealth in gold would be in a much better position today to survive or escape President Maduro's corrupt, far-left regime. In extreme cases like this, gold could literally help save lives. Such was the case following the fall of Saigon in 1975. If not for gold, many South Vietnamese families might not have managed to escape the country....Gold was their passport. Thanks to the precious metal, tens of thousands of Vietnamese 'boat people,' as they’re now known, were able to start new lives in the U.S., Canada, Australia and other developed countries."
An Inflation Nightmare in Socialist Venezuela -Craig R. Smith/SATC
"Imagine watching your life savings of 1,000,000 bolivar notes instantly shrink to just 10 bolivars! The hyperinflation, collapse in economic activity, and lack of public goods and affordable food in socialist Venezuela are now causing a huge migration into neighboring countries. This government-created famine is occurring right now and the America media have mostly ignored the story....This is the exact same type of hyperinflation that hit Germany’s socialist Weimar Republic following World War I as the cost of goods was rising literally by the minute. Could the same thing happen here in America? As I explained in my book Money, Morality & The Machine, if a society's money loses value, that society will also lose its moral values. Socialism almost inevitably debases government paper money to maintain and expand its power. That debasement causes inflation which debases the fundamental work ethic and honesty of society. This same hyperinflation could happen in America because of the rapid socialist drift, but with the right preparation you can survive and even thrive when it happens. This is why people have relied on gold as a secure shelter for their earnings and savings around the world for thousands of years."
As Venezuela Dollarizes, Monetarism's Conceit Collapses -Tamny/Real Clear Markets
"No matter what economists tell you, money isn't wealth. Wealth can't be printed. It's in fact what we create. Money is just an agreement about value that producers use to facilitate the exchange of what they've produced for what they want and need....Which brings us to Venezuela...the dollar is replacing the bolivar. As the Washington Post's Rachelle Krygier reported last week, '[A]ccess to U.S. dollars' is increasingly the 'line between survival and starvation' thanks to the 'nearly worthless' bolivar. Even though the dollar is far from stable....Not only can central banks not control so-called 'money supply,' they shouldn't even if they could. Money supply is logically something set in the marketplace....Monetarists don't care about money's exchangeable value. They simply want central banks to centrally plan the supply of the currency without regard to its value. But as Venezuela reminds us, the stability of the unit of account is exponentially more important than the supply of money is....In Venezuela's case, those who escaped the socialist hell are working for the dollar in countries like Ecuador, and they're sending dollars home....So while news accounts indicate that Venezuela is in desperate shape, the creation of money for the sake of it will do nothing to fix what's wrong."
'Too little too late': Bankruptcy booms among older Americans -New York Times/CNBC
"For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy. The signs of potential trouble - vanishing pensions, soaring medical expenses, inadequate savings - have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers. Driving the surge, the study suggests, is a three-decade shift of financial risk from government and employers to individuals, who are bearing an ever-greater responsibility for their own financial well-being as the social safety net shrinks....And those who are carrying debt into retirement are carrying more than members of earlier generations, an analysis by the Employee Benefit Research Institute found. Perhaps not surprisingly, the lowest-income households led by individuals 55 or older carry the highest debt loads relative to their income."
8.6.18 - Is a U.S. Financial Crisis Inevitable?
Gold last traded at $1,217 an ounce. Silver at $15.34 an ounce.
NEWS SUMMARY: Precious metal prices eased back on speculative selling and a firmer dollar. U.S. stocks rose slightly on reports that major companies will buyback $1 trillion worth of shares this year.
Why gold will remain one of the safest ports during the turbulent times ahead -The National
"Those who heeded my recent warning to sell their Faang stocks (Facebook, Amazon, Apple, Netflix and Google) will still be sitting comfortably. Meanwhile for those who ignored it – Facebook took a 20 per cent hit in one day, the worst loss for a single stock in the history of the US stock market. This sort of sudden volatility is an ill omen and seldom ends well for the wider market. The bigger macroeconomic picture is one of investment values inflated by a decade of ultra-low interest rates that are now just beginning to move in the opposite direction. What's been surprising is how long financial markets have held up under this gravitational force, and yet the sense of inevitability about higher interest rates ultimately means lower valuations have not gone away. Long periods of low interest rates are well known for distorting investment, supporting companies that would otherwise be dead and producing all sorts of Ponzi schemes and dodgy investment ideas. Too much credit floats all boats....In such volatile periods as the one we are heading into, there are few safe places to invest. Keeping cash in multiple major currencies, bonds and precious metals has never made more sense....The vaults of the world’s central banks are full of gold, not Bitcoin."
Are tech titans teetering atop the market? -AFP/Yahoo Finance
"Apple ended the formal trading week worth a history-making $1 trillion. Meanwhile, four other tech firms rounded out a list of the five most valuable companies based on share prices. Amazon was worth $889 billion; Google-parent Alphabet was valued at $856 billion; Microsoft weighed in at $828 billion, and Facebook was valued at $513 billion. Together, these companies account for about 20 percent of US GDP. Combined, the tech stocks account for more than 25 percent of the value of the Standard & Poor's 500, the index that includes the 500 largest companies listed in the United States....Tech titans such as Google and Facebook have become such formidable forces that they are prime targets for regulation or fines, which could slow growth or hurt profits. 'Every technology company remains vulnerable to being disrupted by a slightly more clever version of itself,' BlackRock Global Allocation Team portfolio manager Russ Koesterich said in a blog post."
Facebook to Banks: Give Us Your Data, We’ll Give You Our Users -Wall Street Journal
"Facebook Inc. wants your financial data. The social media giant has asked large U.S. banks to share detailed financial information about their customers, including card transactions and checking account balances, as part of an effort to offer new services to users. Facebook increasingly wants to be a platform where people buy and sell goods and services, besides connecting with friends. The company over the past year asked JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and U.S. Bancorp to discuss potential offerings it could host for bank customers on Facebook Messenger, said people familiar with the matter. Facebook has talked about a feature that would show its users their checking-account balances, the people said. It has also pitched fraud alerts, some of the people said. Data privacy is a sticking point in the banks' conversations with Facebook, according to people familiar with the matter....Investors shaved more than $120 billion from its market value in one day last month after it said its growth is starting to slow. Facebook said it wouldn't use the bank data for ad-targeting purposes or share it with third parties....Partnership with American Express Co. allows Facebook users to contact the card company's representatives. Last year, Facebook struck a deal with PayPal that allows users to send money through Messenger."
Is a Financial Crisis Inevitable? -Poulson/Merrifield/American Spectator
"Assuming the recent tax cuts and spending increases are maintained over the forecasted period, CBO estimates the amount of debt held by the public will equate to the national income over the next decade. Even more ominous, CBO predicts the national debt will eventually be more than double the national income, in just 30 years. This debt level would be unprecedented, exceeding heights reached during the Great Depression and World War II. It should come as no great revelation that CBO concludes this is not sustainable. Unless the United States implements fiscal austerity, reduced economic growth and a debt crisis are inevitable. Just as they always do, Washington, D.C. elites responded to this nightmarish CBO forecast with a collective yawn. The question is why politicians and policymakers are in denial, despite the growing evidence of a fast-approaching debt disaster....To avoid a debt calamity, Congress must abandon illusory Keynesian economics and implement commonsense budgeting principles. Like Ulysses in The Odyssey, we must tie politicians to the mast of fiscal rules to constrain spending. We have proposed a set of fiscal rules that have proven to be effective in constraining spending and reducing debt in other OECD countries. The Merrifield-Poulson fiscal rules would limit spending and impose a deficit/debt brake to prevent Congress from pursuing unsustainable fiscal policies. Without drastic action, America will surely find itself cascading off the fiscal cliff in the coming decades. It’s not a matter of 'if,' it's a matter of when."
8.3.18 - Inflation Drives Apple Market Cap Up
Gold last traded at $1,223 an ounce. Silver at $15.46 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors digested jobs data amid ongoing trade war fears.
Gold Surges on Weak U.S. Data -Investing
"Gold prices were higher on Friday after disappointing jobs data pushed the U.S. dollar lower. Meanwhile, the number of jobs added to the economy was less than expected in June, but still strong enough to keep the Federal Reserve on track to gradually increase interest rates. Nonfarm payrolls rose by 157,000 in July, according to official data released on Friday. The Fed left interest rates unchanged on Wednesday, as expected, but pointed to the potential for increased rate hikes due to strong U.S. economic data....The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slumped 0.13% to 94.88."
Inflation Drives Apple Market Cap To One Trillion Dollars -Global Macro Monitor
"Apple's market cap hit 10 to the 12th power today ($1 trillion). Impressive but no pom-poms here at Global Macro Monitor. We would be more impressed if Apple's main businesses were doing better and the company was more focused on electrical engineering rather than financial engineering....Almost all of Apple's revenue growth was driven by inflation, that is the price increase for iPhones. Unit sales growth for the company's three major products - iPhone, iPad, and Mac - were either flatish year over year or negative. This has been the case now for several years. If Apple were not able to significantly raise iPhone prices (mainly through the upgrade to the X) and only grow revenues by the device's unit sales growth of 0.67 percent, Apple's total revenues would have been about one third of what was posted, or 6.7 percent versus 17.3 percent. One thousand dollar smart phones are not a sustainable proposition, in our opinion, folks. China, or somebody, somewhere, will, or already is producing a quality equivalent smart phone for $250....Furthermore, Apple's inflation driven earnings may be an omen of a larger inflation coming to the overall economy....Finally, the limiting supply-induced surge in Apple price shares due to buybacks is endemic of today's asset markets, in general."
Goldman Sachs sees more price pain ahead for bitcoin -CNBC
"Goldman Sachs is not optimistic for the near-term fate of cryptocurrency. In its mid-year economic report, the bank's investment management group highlighted 'cryptocurrency mania' as one of six factors creating an unsteady undertow affecting markets for the remainder of 2018. 'We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency,' Sharmin Mossavar-Rahmani, Goldman's chief investment officer of the private wealth management group, said in the report published Friday....The cryptocurrency has lost roughly 60 percent of its value since that high in December, and was trading near $7,470 Friday, according to industry site CoinDesk. 'Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected.' Mossavar-Rahmani said....The investment bank is reportedly looking to launch a bitcoin trading desk this year and become the first Wall Street firm to make a market in cryptocurrencies."
The Platform Economy Can Change the World -CEI.org
"Platforms are an ancient way of doing business - think of matchmakers, city fairs, and town markets - that bring together two or more parties to make economic transactions. Today, digital platforms allow a far wider reach, bringing together people in a way that was unthinkable just a generation ago. Examples of platforms include: eBay, which brings together sellers and buyers like a traditional marketplace. YouTube, which brings together content creators, viewers, and advertisers. Uber and Lyft, which bring together owners of cars that would otherwise be left unused with people who need a ride....What's so important about these transactions that didn't happen before is that we create wealth by economic transactions, moving resources from a lower-valued use to a higher-valued use. That happens when we sell an unused good on eBay, give someone a ride via Uber, or share our commentaries on YouTube. Platforms facilitate these transactions, making us all better off....They did this through establishing their own trust system, based on reviews and ratings. Users - whether on the supply or demand side - who do not get good ratings are kicked off the platform. While abuse still occurs, these systems limit it....Platforms are changing the way we live, work, and get about. They have the potential to provide significant increases in wealth. We all use them and, in many cases, love them, so we should also defend them from needless regulation."
8.2.18 - "Holding Gold Makes Me Happy!" -Kiyosaki
Gold last traded at $1,223 an ounce. Silver at $15.40 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Thursday on a firmer dollar. U.S. stocks also traded mixed on renewed China trade war threat as Apple boosted the tech sector.
Warren Buffett Metric Tells Us a Stock Market Crash Could Be Coming -MSN
"Without question, Warren Buffett and the rest of Berkshire Hathaway's investment team incorporate many different metrics when evaluating prospective companies to acquire and stocks to buy. However, Buffett himself has mentioned one specific metric as the best indicator of stock valuations, and it has appropriately been nicknamed the 'Buffett Indicator' in the investing community. In fact, he described it as 'the best single measure of where valuations stand at any given moment' in a 2001 interview with Fortune Magazine. It's a fairly simple metric to calculate, too. Just divide the total market capitalization of all U.S. stocks by the latest gross domestic product (GDP). Where does the Buffett Indicator stand now? It may surprise you to learn that, at nearly 149%, the total market cap to GDP ratio has never been higher. It's even higher than the 145% peak we saw during the dot-com bubble."
Holding Gold Makes Me Happy - Robert Kiyosaki -Kitco
"Holding real gold is the best way to have steady income, says Robert Kiyosaki, best-selling author of 'Rich Dad Poor Dad' and his latest book 'Why The Rich Are Getting Richer.' Kiyosaki has been a self-proclaimed gold bug since 1972, and in his latest interview with Kitco News, he explained his journey with the yellow metal, from his first foray into gold when Nixon removed the dollar from the gold standard, to accumulating millions of dollars in gold today. 'People believe what they want to believe,' Kiyosaki said, 'some people believe that if you go to school you'll be happy, or if you get married you'll be happy….well, I don't know about that, but gold has made me very happy.'"
Apple Just Became The First Trillion Dollar Public Company -Zero Hedge
"Thanks in part to an incessantly shrinking float, Apple just became the first publicly-traded company to be worth more than $1 trillion...The line in the sand was $207.05 (based on Apple's most recently updated share count). And once it tagged $207.05, the sellers hit...And thanks to global ETF demand combined with a buyback-driven shrinking float and rising earnings...Tim Cook is now the CEO of a trillion-dollar company....Bloomberg's David Wilson writes, 'the decline in share count is responsible for 42% of the stock's gain from the end of 2013 through Tuesday'....To be sure, Apple is not alone: a study published by the National Employment Law Project and the Roosevelt Institute found that U.S. companies spent 60% of net income on repurchases, money that could have been used for pay increases, reinvesting in company growth or general R&D spending - between 2015 and 2017. Then again, Apple shareholders are certainly delighted that instead of doing any of those things, AAPL focused on what it does best, at least in recent years: rest on its laurels, borrow the best technology created by its competitors, and use the billions in cash this generates every quarter to buy back its own stock."
Housing demand sees biggest drop in more than 2 years -CNBC
"The long list of housing headwinds is finally taking its toll on potential buyers. Housing demand fell 9.6 percent in June, compared with June 2017, according to a monthly index from Redfin. That is the largest decline since April 2016. Red-hot home prices, rising mortgage interest rates, very few listings at the entry level and a high rate of student loan debt have weighed on buyers for a while, but a strong economy and growing employment had mitigated those factors. Now, however, a market stalemate is developing as rates and prices continue to rise, further weakening affordability. As a result, the number of people requesting home tours fell 6.1 percent annually in June, according to Redfin's index, which is seasonally adjusted and covers 15 large metropolitan housing markets. There were 15 percent fewer offers made on homes as well."
8.1.18 - Monster Gold Rally Around The Corner?
Gold last traded at $1,227 an ounce. Silver at $15.45 an ounce.
NEWS SUMMARY: Precious metal prices eased back Wednesday on a firmer dollar ahead of Fed statement. U.S. stocks traded mixed with Apple propelling tech higher and trade war fears dragging other major stock indexes down.
Is A Monster Gold Rally Just Around The Corner? Cramer’s Charts Show Bottoms Are In -Kitco
"With a floor in gold prices more or less set just above the $1,200 an ounce level, a monster rally could be on the horizon, according to Mad Money's Jim Cramer. The large speculators in the gold space are great markers of sentiment and direction, CNBC's Cramer said on Tuesday. And the latest weekly CFTC Commitments of Traders Report, which shows how speculators are positioned, reveals that the large players have reduced their gold futures to the lowest level in years. 'The big-money speculators are pretty darned negative,' Cramer said. 'And I think perhaps too negative on the yellow metal, which could be tinder for a big rally.' Indeed, the last time the CFTC numbers were this low - December 2015 - gold kicked off 'a monster rally,' Cramer pointed out....Cramer suggested buying gold to diversify any portfolio as the yellow metal is a great hedge against many market risks out there. 'Let me give you the bottom line here: for those of you who are genuinely worried about inflation and trade policy and rising rates, and let's throw in the budget deficit, you don't need to dump your stocks,' Cramer said. 'Instead, though, how about buying some gold as an insurance against economic chaos.'"
Is GOP Proposed $100B Tax Cut for Real ... or for the Rich? -Fox News
Swiss America Chairman Craig R. Smith addresses concern voiced by Democratic House Minority leader Nancy Pelosi that the proposed GOP $100B tax cut, which would index gains for rising inflation, is a scam that will only benefit the rich.
How Trump Could Be Like Reagan -Moore/Laffler/Forbes/New York Times
"Just as Ronald Reagan once pushed for abolishing nuclear weapons, President Trump should call for ending tariffs. President Trump won a victory for freer trade last week when he and the president of the European Commission, Jean-Claude Juncker, agreed to find ways to lower tariffs and other barriers to each other's exports....We were particularly heartened that Mr. Trump and the Europeans now have a handshake agreement to aim for zero tariffs on both sides of the Atlantic. This was Mr. Trump's idea. The night before the agreement, he proposed in a tweet that 'Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade!' Amen. This is a winning strategy that we've long endorsed with our friends at the White House because it is fully consistent with what Mr. Trump has often told us: his threat of tariffs is a negotiating tactic to get to lower trade barriers and a 'level playing field.' The next step should be to extend this zero tariff offer to other key allies, including Britain, Canada, Mexico and South Korea....By putting zero tariffs on the table, Mr. Trump will also be able to determine which nations are genuinely committed to freer trade and which prefer to keep their protectionist barriers in place. We've often reminded politicians that free trade is a pillar of prosperity and a win-win for trading partners."
Save Low Interest for a Rainy Day -Feldstein/Wall Street Journal
"Controlling inflation isn't the primary reason for the Fed to keep raising the short-term interest rate. Rather, raising the rate when the economy is strong will give the Fed room to respond to the next economic downturn with a significant reduction. That downturn is almost surely on its way. The likeliest cause would be a collapse in the high asset prices that have been created by the exceptionally relaxed monetary policy of the past decade. It's too late to avoid an asset bubble: Equity prices already have risen far above the historical trend. The price/earnings ratio of the S&P 500 is now more than 50% higher than the all-time average, sitting at a level reached only three times in the past century. Commercial real-estate prices also are extremely high by historical standards. The inevitable return of these asset prices to their historical norms is likely to cause a sharp decline in household wealth and in the rate of investment in commercial real estate. If the P/E ratio returns to its historical average, the fall in share prices will amount to a $9 trillion loss across all U.S. households....Raising rates does increase the risk of bursting the asset bubble sooner than investors and consumers might hope."
7.31.18 - Stock Sell-Off to Hit Investors Hard
Gold last traded at $1,233 an ounce. Silver at $15.55 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting despite a firmer dollar. U.S. stocks rebounded on reports that the U.S. and China are seeking to defuse an escalating trade war.
Morgan Stanley: The biggest sell-off since February is coming and it's going to hit the average investor hard -CNBC
"Morgan Stanley believes the dramatic drops in some high-flying technology stocks this month is further evidence the stock market will go lower. 'The weaker earnings beat from several Tech leaders and outright misses from Netflix and Facebook were simply additional support for our [defensive] call,' chief U.S. equity strategist Michael Wilson said in a note to clients Monday. And the average investor could suffer even more this time, Wilson said. 'We think a coming correction will be biggest since February, although it could very well have more of a negative impact on the average portfolio if it is centered on Tech, Discretionary, and small caps,' the note said....In 2017, Wilson was one of the most bullish strategists on Wall Street."
Socialism, Like Dracula, Rises Again from the Grave -FEE.org
"The human cost of the great socialist experiment to remake man and humanity for a new collectivist heaven on earth did not come cheap. Historians of the communist experience around the world have estimated that as many as 200 million people - innocent men, women, and children - may have been killed in the socialist meat grinders: 64 million in the Soviet Union and up to 80 million in China, with millions more in the other socialist societies around the global. What else could be expected from an economic system that prevented any individual initiative or incentive to work, save, and invest, since private enterprise had been abolished and declared to be the basis of exploitation and injustice?....Vampire-like, socialist political and economic systems drained the life force out of the societies in which they ruled. No ambition, no drive, no prospects for a better and happier life was the state to which socialism reduced humanity...The last decade of the 20th century saw the collapse of Marxian socialism in the Soviet Union and the 'captive nations' in Eastern Europe that were conquered by Stalin at the end of the Second World War....But like Dracula rising once more from the grave, socialism has been making a comeback among academics, college and university students, and a growing number of intellectuals."
Gold Is A Strategic Buy At Current Prices - ETF Securities -Kitco
"Although the gold market is hovering near its lowest level in a year, one fund manager sees the current price as an attractive entry point to build a strategic position. 'Gold is down but far from out,' said Maxwell Gold, director of investment strategy at ETF Securities by Aberdeen Standard Investments in a telephone interview with Kitco News. Gold said that he sees several factors that should help boost gold prices through to the end of the year including a weaker U.S. dollar, a surprise rise in inflation pressures, and over-extended negative sentiment. He added that gold prices are likely to average the year at $1,275 an ounce. 'I am paying attention to gold at these levels because they are below my base-case scenario and if gold were to slip below $1,200 that would be an even stronger signal that investors need to look at gold as a strategic asset,' he said....'Nobody is talking about inflation that goes hand-in-hand with a late-stage business cycle,' he said. 'We see unprecedented complacency in the marketplace and that is why we haven't seen a flight to quality. However, we expect this sentiment will shift in the second half of the year.'"
Consumer debt is at an all-time high. Should banks be worried? -American Banker
"September 2008 was one of those rare interludes when the world shifts beneath your feet. Markets froze. Fabled banks stood on the precipice. The U.S. government, after initially standing by idly, brought out its bazooka. After a generation of deregulation, it genuinely seemed possible that the U.S. banking system would be nationalized....Foreclosures became an epidemic. College graduates were forced to move into their parents' basements. Aging workers had their retirement plans upended. But 10 years later, what's remarkable is how little the financial crisis changed Americans' relationship to debt and savings. We still borrow more and save far less than prudence would dictate. U.S. household debt, which declined between 2008 and 2013, has rebounded sharply. By the first quarter of 2018, it was at an all-time high of $13.2 trillion...The crisis did not teach us a lesson about the perils of borrowing too much....Between 1960 and 1984, the U.S. personal savings rate...never fell below 8%. That level of national thrift is far out of reach today. In December 2017, the personal savings rate dropped to 2.4%, its lowest level since the debt-fueled boom of the mid-2000s....The big question is what will happen to consumer debt levels as the Fed continues to raise interest rates...The ability to make their debt payments will erode with time, which will leave them vulnerable to the next economic shock."
7.30.18 - Banks Requiring Proof of Citizenship
Gold last traded at $1,231 an ounce. Silver at $15.53 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Monday despite a weaker dollar. U.S. stocks slid as the tech stock sell-off accelerated.
Faangs slide into correction territory as tech sell-off picks up -Financial Times
"Investors sold off technology shares on Monday, leaving the closely monitored group of Faang stocks down more than 2 per cent and in correction territory....Keep close tabs on the so-called Faang stocks - Facebook, Amazon, Netflix and Alphabet - because they have posted big gains over the past few years and helped to power the broader market higher. However, two of them have hit major stumbling blocks during this year's earnings season. Facebook plummeted by almost a fifth after it warned of slower revenue growth during the second half of this year. Meanwhile, Netflix has declined about 20 per cent from the highs it hit in late June after its subscriber growth figures missed forecasts. Steven DeSanctis, analyst at Jefferies, said with two of five Faang stocks posting disappointing results, along with some others so-called high-growth stocks, he thinks 'the shift from growth to value is upon us'....Apple, which is due to release its results after the market close on Tuesday, were off by about 0.6 per cent."
Stripping zeros not the answer to save Venezuelan economy, say analysts -Zero Hedge
"Zapping five zeros off Venezuela's almost worthless currency is nothing but a half-hearted measure and won't solve the country's chronic hyperinflation, analysts have told AFP. President Nicolas Maduro initially announced in March that he would strike three zeros off the bolivar bank notes, before upping that to five. Having predicted earlier this year that Venezuela's inflation would hit 14,000 percent in 2018, the International Monetary Fund adjusted that projection earlier this week to a mind-boggling one million percent. The biggest of those, 100,000 bolivars, would have bought five kilograms (11 pounds) of rice in 2017, now it's barely enough for a single cigarette....Venezuela has already been down this road, 10 years ago when Maduro's predecessor Hugo Chavez tried the same trick by deleting three zeros....The monetary redenomination is to prevent the collapse of businesses' financial systems: every transaction costs hundreds of millions or billions. Banking is affected too, with a source telling AFP that 'there's a real possibility of collapse.'"
Storm Of News To Hit Global Economy This Week Before August Calm -Bloomberg Quint
"TUESDAY: Central bankers in the U.S., Japan, the U.K., Brazil and India all meet to set their respective monetary policies at a time when Eric Oynoyan, senior European interest-rate strategist at BNP Paribas SA, is telling clients that 'central banks are back in the bond market driving seat.' Despite speculation it could soon flesh out its plan for eventually adjusting stimulus, all 44 economists surveyed predict the Bank of Japan will maintain the current setting on interest rates....WEDNESDAY: U.S. Federal Reserve Chairman Jerome Powell and colleagues meet with all but one analyst predicting no change in rates. By contrast, onlookers are bracing for the Reserve Bank of India to raise its benchmark as emerging market currencies get buffeted, although those in Brazil are betting it won’t shift from a record low of 6.5 percent....THURSDAY: The Bank of England is expected to raise its key rate to 0.75 percent, the highest since 2009, although not every policy maker may back the decision as risks of a disorderly Brexit mount....FRIDAY: The first Friday of the month means the U.S. publishes its nonfarm payrolls data. Also of interest amid the trade war will be the U.S. trade balance, which is seen swelling to a deficit of $46.1 billion."
Why Bank of America asked Kansas man for proof of citizenship - and may ask you, too -Kansas City Star
"Josh Collins and wife Jessica Salazar Collins were mystified: Why would the Bank of America, where they've banked since the early 2000s, suddenly ask questions about Josh’s citizenship? He was born in Wichita. So this thoroughly American couple from Roeland Park ignored a form that the bank mailed them about a month ago asking, among other things, whether Josh Collins was a citizen or could claim dual citizenship with another country. Jessica said she tossed the letter because she and Josh 'thought it was a scam.' Until the bank on Tuesday cut off access to their money. Bank of America said it was standard practice to ask about citizen status when opening a new account or updating customer information on an existing one. 'Like all financial institutions, we're required by law to maintain complete and accurate records for all of our customers and may periodically request information, such as country of citizenship and proof of U.S. residency....Bank of America spokeswoman Diane Wagner said it was unfortunate that the Collinses didn't respond to the request for updated information. 'If we don't hear from a customer in response to our outreach,' she said, 'as a last resort, we may restrict the account until we can confirm it is in compliance with regulatory requirements' and safe from identity thieves."
7.27.18 - Gov't seizing cash from individuals without cause
Gold last traded at $1,223 an ounce. Silver at $15.49 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a weaker dollar. U.S. stocks fell despite upbeat GDP data as a rollover in technology shares was led by Intel and Twitter.
Book Review: LIFE AFTER GOOGLE: The Fall of Big Data and the Rise of the Blockchain Economy -Primelifers
"While many can hardly imagine life before Google gave us instant access to search the knowledge of the ages, at least one forward-thinking tech genius is committed to preparing to help us all imagine what life after Google might look like. Mr. Gilder has done average 'non-techie' people a great service writing this book exposing the fatally-flawed premise of Google's hierarchical 'system of the world' and unveiling the soon-arriving heterarchical or 'blockchain' system. Today Google is the world's premier information search tool, but along with it's highly-used 'free' services it has also opened Pandora's Box and a dangerous, unsecured computer world - according to technologist-philosopher-economist George Gilder. The result: your identity, your assets and your future are at high risk from a system so fragile that virtually no individual or business is secure from cyber-attacks....The world of blockchain, blockstack, bitcoin and other cryptocurrencies is pretty hazy for most consumers and investors. But Gilder does a good job of bringing clarity about what bitcoin is and what it is not. He believes that the world economy functioned smoothly for 300 years when we had a Gold Standard....Gilder sums bitcoin up, 'Bitcoin cannot fulfill its basic role as a currency. Its historical fate is to provide a haven from maniacal governments and central banks and a harbor for a great innovation, the blockchain." Full story
The FAANGs Will Crash -Bonner/Bonner And Partners
"Yesterday, Mark Zuckerberg's company lost $151 billion in stock market value. The stock fell 20% after hours...And if that keeps up, Lord Zuck will soon be sleeping in his car, parked in a Walmart lot in Menlo Park. Because the S&P 500 is so 'tech heavy,' all of the gains in the stock market this year have come from the Big Tech stocks, the FAANGs: Facebook, Amazon, Apple, Netflix, and Google. And what Mr. Market giveth... Mr. Market taketh away....In our own era, the dot-coms were famously overvalued during the tech boom of the late 1990s. We began writing this diary - then called The Daily Reckoning - in 1998, 20 years ago. We recall sneering at the internet darlings of the late '90s and mocking the gurus of the time, such as George Gilder (who has since joined our very short list of heroes for his help in understanding our fake-money system). We recall warning that the bubble would burst. And finally, we remember how upset readers were with us. It was as if we had told a child that their dog had died and Santa Claus was a fraud. They didn't want to hear it. They had found their Messiah; they knew that dot-coms would liberate them from want… from need… from having to save money, think hard, or satisfy customers. Alas, no substitute for hard work, discipline, patience, or luck has ever been discovered. Man was expelled from Eden a long time ago. Never since has he been able to live without sweating and hustling, despite huge gains in technology. Present tech wonders will be no exception; today’s Icarus tech stocks will crash, just like the rest of them."
Big Stocks Rock NASDAQ as Two FAANGs Bite the Dust -Zero Hedge
"Two of the original FAANG stocks that carried the US stock market higher throughout the Fed’s fake recovery from the Great Recession have revealed in the past week how quickly overpriced, bubblicious stocks can turn on investors and bring a rising index down. Facebook, which put the 'F' in FAANG, showed it knows the foulest meaning of an 'F' when its second-quarter report card got graded. Overnight, Facebook lost $150 billion in value, which was a drop of over 20%, putting the stock, at opening, in its own bear market. By the end of the today's actual trading (Thursday) the stock had settle at down $119 billion (-19%), which still set a record as the worst corporate crash in the history of the US stock market. Pronounced one analyst of Facebook like a referee, 'Bears win this quarter.' Just for perspective, Facebook's crash today was bigger than the entire market value of Nike, General Electric, Goldman Sachs, Blackrock, Starbucks, Airbus, and several South American economies all combined. Showing how easily investors have been beguiled into thinking what goes up can never come down, one analyst described Facebook’s announcements as 'bombshells.' The extremely foul report led many stock analysts to seriously and instantly downgrade the stock."
The Government Seized $29K Of Mine When I Did Nothing Wrong -Sacramento CBS Local
"A Yuba City man says law enforcement confiscated his money but he didn't commit a crime. Now he's fighting to get back tens of thousands of dollars. Yuba City resident Josh Gingerich buys and flips trucks. A recent buying trip to do that cost him a bag of cash which was seized by a U.S. Drug Enforcement Administration (DEA) drug interdiction task force at O’Hare Airport. 'A little over 29 grand,' the amount taken said Gingerich who was not arrested and did not break any laws. 'No marijuana, no drugs.' He believes an airport TSA agent saw the money in his backpack and tipped off the DEA....Gingerich said he was set up by the officers who he says claimed to smell marijuana on a plastic bag filled with dirty laundry in his backpack. He said officers dumped the clothes, filled the bag with cash, then brought it to the drug dog. 'They can just do what they want,' said Gingerich. Within the United States, it is legal to carry cash, says Benjamin Ruddell of the ACLU. 'There's no prohibition on carrying cash, or carrying a large amount of cash,' said Ruddell who points out what they believe is flawed with the DEA Civil Asset Forfeiture Program....Last March, the U.S. Justice Department Inspector General released a report saying from 2007–2016, the DEA seized $3.2 billion with zero convictions tied to this money....If Gingerich fails to get his money, it will be divided up between the federal government and local police on the task force."
7.26.18 - "Risk Is Going Up Exponentially... It's Unmeasurable"
Gold last traded at $1,227 an ounce. Silver at $15.56 an ounce.
NEWS SUMMARY: Precious metal prices eased Thursday on a firmer dollar. U.S. stocks traded mixed as Facebook stock plunged near bear market territory.
Gold: Come'on - admit it - you want to own it -The Macrotourist
"One of my buddies likes to bug me about my gold views. 'For a not-completely-dumb guy, you sure have a boneheaded love of that stupid yellow rock.' Yeah, I get it. It's my hidden shame. But a part of me feels I am simply brave enough to say out loud what we all feel. Well, I am hoping my love of gold squeezes that same sort of smile from you. In this world of...crazy central bank policies, a smidgen of the asset that has maintained its status as a store of value for thousands of years seems prudent....If I thought central banks were to abandon their aggressive financial repression, I would ditch my bullish gold forecasts. But I view that as a low-probability outcome. In fact, I suspect in the coming decades, the financial repression will get worse. Therefore I view gold to be an asset where the big surprises will be to the upside, not the other way around. I would even go as far to say that when I have no position in gold, I feel naked."
FANG stocks – the world's most crowded trade – burns investors who held into earnings -CNBC
No Shirt, No Swipe, No Service -Slate
"Cash is a miracle. So why are more businesses refusing it? For years, small businesses have asked customers to pay cash, set credit card minimums, or added a surcharge onto card transactions, in an effort to defray the premiums imposed by companies like Mastercard and Visa. Now, an increasing number of businesses are doing the opposite....Cash is still used in the majority of purchases under $10, according to research by the San Francisco Fed. But its use is falling sharply. In 2011, cash accounted for 4 in 10 purchases in the S.F. Fed's Consumer Payment Diary. By 2016, it was down to 3 in 10....This trend toward thinner wallets makes it easy to forget what a miracle cash is. 'Cash is profoundly democratic,' said Bill Maurer, the dean of the School of Social Sciences at UC-Irvine and the author of How Would You Like to Pay? 'It can be given by anyone, accepted by anyone, settled and cleared instantaneously.' One of the central bank's great achievements, he observed, was making sure that transactions involving cash and checks would be settled at par - meaning that there's no transaction cost to paying that way. With plastic and online payments, that's rarely the case....'We increasingly live in glass houses: virtually everything we do is recorded, tracked, or monitored,' argued Jonathan Barth, a historian of capitalism at Arizona State."
"Risk Is Going Up Exponentially... It's Unmeasurable" -Egon Von Greyerz/Zero Hedge
"There is only 0.5% of all world financial assets held in physical gold. So, this is a very small group, but it is still a lot of money. Of course, the majority doesn't believe this because if they did, all the other markets would collapse. The particular people that are concerned about risk that we deal with, and they are not concerned in a minor way... look at all the asset classes, whether you take the stock markets, bond markets or property markets, they are all in the most massive bubbles fueled by exponential growth in credit. Global credit has tripled since 1999 to today. Global debt went from $80 trillion to $240 trillion. When debt triples, it doesn't mean that risk triples. Risk goes up exponentially. Then you add to that all the off-balance sheet items and unfunded liabilities. The derivatives are at least $1.5 quadrillion. I think stock markets and bond markets will go down by at least 75%, and I would say it could be up to 95% or more. A lot of companies will disappear....With this risk, people have to take insurance. This business is not a business, it is a passion, and I have a passion to help the few people that see the risks. . . . I think your best wealth preservation will be gold.'"
7.25.18 - America's Most Vulnerable Live on Edge
Gold last traded at $1,231 an ounce. Silver at $15.58 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a flat dollar. U.S. stocks traded mixed after Boeing and General Motors issued disappointing profit guidance.
Southern California home sales crash, a warning sign to the nation -Bloomberg
"Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties....The weakness was especially apparent in sales of newly built homes, which were 47 percent below the June average. Part of that is that builders are putting up fewer homes, so there is simply less to sell....According to Andrew LePage, a CoreLogic analyst, 'Affordability and inventory constraints are likely the main culprits in last month's sales slowdown, which applied to all six of the region’s counties and across most of the major price categories.'....In the past, California, one of the largest housing markets in the nation, has been a predictor for the rest of the country. Home prices have been rising everywhere, amid a critical housing shortage. Prices usually lag sales by several months, and sales are beginning to crumble, even as more inventory comes on the market."
In California - and elsewhere - housing prices are approaching bubble levels again. Let's look at how home prices compare with gold. It took 628 ounces of gold to buy a new home in 1954, but today it only takes 248 ounces of gold to buy a new home. Gold outpaced housing price inflation by over 250% - making gold a better store of value than real estate over the long-term! The same is true comparing Dow stocks with gold. Recently Craig R. Smith compared the price of gold with the Dow so far in the 21st century... gold prices have risen more than threefold compared to the Dow!
Gold mid-year outlook 2018 -World Gold Council
"The first half of 2018 proved quite eventful for financial markets. Stocks experienced a few pullbacks during the first quarter as geopolitical tensions rose....Gold's price rose by more than 4% in the first few months of the year, only to finish June down by the same amount....We believe, however, that there may be reasons to be more optimistic on the second half....For investors, gold's current price range may offer an attractive entry level, especially since net longs linked to COMEX gold futures are at their lowest level since mid-2017...Historically, such a scenario has coincided with a rebound in the price of gold, as even a small catalyst for investment demand caught speculative investors with a large exposure to short positions. Finally, while the summer period tends to be a quiet period for gold buying and trading...the gold price has tended to increase in September as consumers prepare for a traditional buying period and investors rebalance their portfolios before the end of the year."
Mortgage, Groupon and card debt: how the bottom half bolsters U.S. economy -Reuters
"A Reuters analysis of U.S. household data shows that the bottom 60 percent of income-earners have accounted for most of the rise in spending over the past two years even as the their finances worsened - a break with a decades-old trend where the top 40 percent had primarily fueled consumption growth. With borrowing costs on the rise, inflation picking up and the effects of President Donald Trump's tax cuts set to wear off, a negative shock - a further rise in gasoline prices or a jump in the cost of goods due to tariffs - could push those most vulnerable over the edge, some economists warn....As a result, over the past year signs of financial fragility have been multiplying, with credit card and auto loan delinquencies on the rise and savings plumbing their lowest since 2005....That many Americans lack any financial safety net remains a concern, New York Fed President John Williams told Reuters in an interview last month...“This is a problem that continues to hang over half of our country.'"
California city considers starting its own cryptocurrency -American City And County
"Berkeley, Calif., officials announced a partnership with Neighborly, a San Francisco technology firm, and the University of California, Berkeley's Blockchain Lab to study the potential for the city to release an initial coin offering (ICO), PCMag reports....'We have to embrace the spirit of innovation if we are going to turn a corner on all these pressing problems like the water shortage, the housing shortage,' Berkeley City Council Member Ben Bartlett told PCMag. The initiative would see Berkeley releasing a public ICO, with investors having the option of buying digital tokens or municipal bonds in U.S. dollars, Bloomberg reports....'We are hoping to create a new funding resource in the face of federal retrenchment,' Bartlett told PCMag. 'We have over 1,000 homeless people and we are not going to accept an inability to house them.' As Berkeley is a sanctuary city - a city known to protect undocumented immigrants - it could receive less federal funding due to President Trump's expressed disdain for such cities."
U.S. cities and states are now beginning to create their own currencies to compete with the U.S. dollar. "And it's not just California. New York, Illinois and Colorado have been quietly passing laws to implement their own state-issued cryptos," according to cyptocurrency expert Teeka Tiwari. Now is the time to convert a portion of your U.S. dollar assets (which are under increasing attacks internationally as well as now domestically) into physical gold - which remains a very undervalued asset. Call 800-289-2646 to speak with a Swiss America representative today!
7.24.18 - Venezuela Inflation to Reach 1,000,000%
Gold last traded at $1,225 an ounce. Silver at $15.52 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Tuesday on a flat dollar. U.S. stocks rose after upbeat earnings from Google-parent Alphabet led a swell in technology stocks.
Chinese Gold Market: Still In The Driving Seat -Zero Hedge
"As a reminder, China is the largest gold producer in the world, the largest gold importer in the world, and China's Shanghai Gold Exchange is the largest physical gold exchange in the world....Around the world, monetary gold (i.e. central bank gold) is exempt from customs and trade reporting when it moves across borders. Given this exemption, it is difficult to really know how much gold central banks (including the Chinese central bank, the PBoC) actually have at any given time....The 2017 gold output total of 426.14 tons was itself 27.3 tons, or 6%, less than in 2016, it looks like 2018 will see another year of reduced gold production from the world's number one gold producer. With continued buoyant demand from the Chinese gold market, these relative production shortfalls will have to be made up by larger gold imports or increased volumes of gold recycling."
Venezuela's Inflation to Reach 1 Million Percent, IMF Forecasts -Bloomberg
"Venezuela's inflation will skyrocket to 1 million percent by the end of the year as the government continues to print money to cover a growing budget hole, the International Monetary Fund predicted on Monday. The crisis is comparable to that of Germany in 1923 or Zimbabwe in the late 2000s, said Alejandro Werner, head of the IMF's Western Hemisphere department....'The collapse in economic activity, hyperinflation, and increasing deterioration in the provision of public goods as well as shortages of food at subsidized prices have resulted in large migration flows, which will lead to intensifying spillover effects on neighboring countries,' Werner wrote in a blog post....While hundreds of thousands of Venezuelans flee hunger and surging prices, President Nicolas Maduro has maintained that the crisis is a result of an 'economic war' waged by his political opponents at home and abroad. As the economy unraveled, authorities stopped regularly publishing economic indicators. Economists now rely on independent estimates provided by international organizations, banks and even Venezuela’s congress to track the country's economic meltdown."
Socialist Country That Doesn't Believe in Inflation to Hit 1 Million Percent Inflation -FrontPageMag
"The left-wing sociologist running the Venezuelan economy doesn't believe in inflation. Last year he wrote a pamphlet in which he insisted that 'Inflation does not exist in real life.'....The Socialist government tried to solve its money problem by printing more money. But it wasn't able to pay for the money it wanted to print because of the inflation which officially did not exist....The once wealthy oil-producing nation of Venezuela is in the grips of a five-year crisis that leaves many of its people struggling to find food and medicine, while driving masses across the border for relief into neighboring Colombia and Brazil. Shortages in electricity, domestic water and public transportation plague millions of Venezuelans, who also confront high crime, the IMF noted. IMF economist Alejandro Werner says that if the prediction holds, Venezuela's economy will contract by 50 percent over five years. Werner says it would be among the world's deepest economic falls in six decades."
David Rosenberg issues bubble warning in credit market: It will tear into stocks -CNBC
"David Rosenberg is pretty certain he knows how the bull market in stocks will end. The Gluskin Sheff chief economist and strategist expects widening spreads will tear it apart. 'The corporate bond market is today’s bubble, just like the mortgage market a decade ago was the bubble back then,' he said Monday on CNBC's 'Trading Nation.' Rosenberg, who referred to the corporate bond market as the 'elephant in the room,' suggested that it's just a matter of time until it blows up and puts stocks at risk....According to Rosenberg, the United States is on the final leg of an economic expansion — a view he's held for a couple of years. But now, the end game may be closing in on investors."
7.23.18 - Housing Market Collapse 2.0 Has Begun
Gold last traded at $1,225 an ounce. Silver at $15.42 an ounce.
NEWS SUMMARY: Precious metal prices eased back Monday following a strong rebound Friday. U.S. stocks traded mixed as Wall Street looks ahead to big tech earnings.
Russia is dumping US Treasuries. Will China be next? -Asia Times
Despite US President Donald Trump's best efforts to make nice with Russia, it seems the Kremlin is not putting all of its eggs in the detente basket. As a hedge against the success reproachment - and possible accompanying sanctions relief - Moscow is reportedly dumping US government debt, and doing so fast. 'A US Treasury report this week appears to show Russia liquidating dollar assets at a record pace, selling four-fifths of its cache of US government debt, $81 billion worth, over a two-month period. It started in April, when the U.S. imposed the most onerous sanctions yet on allies of Putin,' Bloomberg reported Friday. The move is 'the obvious way to limit a country's exposure to US sanctions,' according to Brad Setser, a former Treasury Department official who is now at the Council on Foreign Relations in New York....Russia's decision to drop US bonds begs the question: why not China? There has been widespread speculation, amid an escalating trade war and a ballooning US deficit, that China might consider doing it....'If China started to sell, the amount of US paper that non-Chinese investors would need to absorb would be extremely large,' Setser went on."
Housing Market Collapse 2.0 Has Begun -Zero Hedge
"New-home-construction starts are down 12.3% nationwide to a nine-month low due to the largest single-month drop in more than year and a half. That is a huge sign of a nationwide housing market collapse when you consider that this is the time of year when housing is usually on a tear because weather allows construction everywhere. Instead, construction in the US is down … way down … EVERYWHERE....Both single-family and multi-family housing construction are losing momentum. As an even clearer sign of where we are headed in the near future, housing construction permits are also down for the third month in a row. So, the decline in permits is now a trend...Mortgage applications also fell nationwide this week....Such a broadly perceptible and admitted sagging sensation during the perennial peak buying period of the year is proof that the entire market landscape is starting to slide away. Housing, as I've maintained for a year, is going down. The next housing market collapse is here."
Bullion bulls: This app turns gold into a digital currency -Marketwatch
"Glint runs a free-to-download mobile app of the same name. The app allows users to buy fractions of a physical bar of gold digitally, then use that gold to electronically buy items using an accompanying, multicurrency Mastercard Inc. MA debit card. 'We're reintroducing gold as money,' said Ben Davies, Glint's co-founder and chief operating officer, who, with Glint's co-founder and Chief Executive Jason Cozens, demonstrated their marriage of old and new - gold and tech - at MarketWatch's London office. 'It was once money, it will be money again and it already is now under this application,' said Davies, whose more than 20 years of working in financial markets includes co-founding investment firm Hinde Capital and running the Hinde Gold Fund, which has a long bias on gold bullion....The Glint app will be running in the U.S. by the end of the third quarter of this year after launching in the U.K. and in Europe at the end of 2017....Glint customers are able to hold euros and U.S. dollars, with gold and sterling in multicurrency wallets, through a single account."
Peter Thiel Interview -Die Weltwoche
"The mentioning of his name sends shockwaves through Silicon Valley, the place where serial founder and venture capital investor Peter Thiel has been a driving force of the internet revolution for decades. In 1999, he co-founded Paypal with Elon Musk. Their aim: Reinventing the financial system and, indeed, money. Die Weltwoche: 'At the moment, Silicon Valley still looks all-powerful.' Peter Thiel: 'The big question is: Will the future of the computer age be decentralized or centralized? Back in the 60s, you had this Star Trek idea of an IBM computer running a planet for thousands of years, where people were happy but unfree. Today, again we are thinking that it is going to be centralized: Big companies, big governments, surveillance states like China. When we started Paypal in 1999, it was exactly the opposite: This vision of a libertarian, anarchistic internet. History tells me that the pendulum has swung back and forth. So, today I would bet on decentralization and on more privacy. I don't think we are at the end of history and it's just going to end in the world surveillance state.'"
"Google's algorithms assume the world's future is nothing more than the next moment in a random process. George Gilder shows how deep this assumption goes, what motivates people to make it, and why it's wrong: the future depends on human action." - Peter Theil, back cover "Life After Google"
7.20.18 - The Fed Can't Stop What's Coming
Gold last traded at $1,231 an ounce. Silver at $15.54 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks rose on upbeat earnings despite increased China tariff threats.
Gold snaps losing run after Trump slams strong dollar -Reuters
"Gold prices rose on Friday from one-year lows hit the previous day after U.S. President Donald Trump criticized the strength of the dollar and interest rate increases by the Federal Reserve, pushing the greenback sharply lower....Bank of America Merrill Lynch said on Friday fears of a trade war had seen global investors plough $5 billion into bonds this week while pulling $1.2 billion from gold....One trigger could be sharp falls on global stock markets which could drive investors to gold, seen as a safe asset, said Forex.com analyst Fawad Razaqzada. Another could be a weakening of the dollar, which Turner said he expected to see later this year or next year. Despite Trump's intervention, the dollar was near one-year highs on Friday as Fed Chairman Jerome Powell did nothing this week to counter expectations of two more rate rises this year and said the United States was poised for several more years of growth."
Gold Bugs vs. Stock Market Bulls -Pension Partners
"Which is the better investment: Gold or Stocks? It's a battle as old as markets. Gold Bugs and Stock Market Bulls are equally fervent about their investment of choice, often with complete disdain for the other side. The story goes something like this….2000-2011 - Gold Return: +443%, S&P 500 Return: +7% - Narrative: Stock investors have suffered through two 50% bear markets while Gold has more than quintupled. These are deflationary, depression-like conditions and only Gold can protect investors from what's to come. This is especially true given the endless 'money printing' by central banks. And by the way: stocks are terrible investments....2012-2018 - Gold Return: -22%, S&P 500 Return: +157% - Narrative: We're in a Goldilocks period of low inflation and easy money. This is unbelievably bullish for stocks and very bad for Gold. This environment will continue forever. And by the way: Gold is just a pet rock....By changing the start and end date, you can frame almost any argument you want in this business. Which is why the real winner is neither Stock Bulls nor Gold Bugs. It is the investor who can actually remain invested through tough times in a single asset class by maintaining a diversified portfolio of multiple assets: stocks, bonds, real estate, commodities, and alternative investments. Combining uncorrelated assets has been shown to reduce overall portfolio volatility and improve risk-adjusted returns."
Ten Years Later, There's Still No Economic Recovery -Real Clear Markets
"This week marks one of those ten-year anniversaries that has gotten lost in the noise of aftermath....On July 15, 2008, then-Chairman Bernanke was before the Senate attempting to be cautiously optimistic. Sure, there had been a lot of nasty surprises, he said, but there was a growing sense the worst was behind...While that was his main message, it was completely overwhelmed by Fannie. And Freddie....Using subprime as an excuse meant making a monetary event seem like something else, an exogenous factor beyond the scope of monetary policy. Irresponsible lending practices sounds just plausible enough to keep anyone from seeking the right answers....So, ten years later we still wait for recovery having supposedly avoided 'the collapse of the global financial system.' Many people now speak of the US economy in particular as if it is booming. They do so, however, from only one piece of evidence: the unemployment rate. The number itself is uncorroborated by any other data, especially wage growth."
The Fed Can't Stop What's Coming -Bonner/Bonner and Partners
"As you'll recall, Fed policy consists of the same three mistakes...The Fed is now making Mistake #2: It is raising rates to try normalizing the financial markets. Inflation is running at 2.9%. Its current fed funds target rate is between 1.75% and 2%. So it is still lending money at very un-normal, negative real rates. It claims it will make two more hikes this year to cut off the supply of EZ money and get ahead of inflation. But already, it is preparing for its Mistake #3 – cutting rates in a panic when Mistake #2 causes stocks to fall. Here's a report from Bloomberg: 'Federal Reserve Chairman Jerome Powell said the central bank will continue to gradually raise interest rates 'for now' to keep inflation near target amid a strong U.S. labor market.'....Yes, Jerome Powell is only admitting what we already knew...The Fed will never willingly revert to normal (market-discovered) interest rates. Instead, normalization will be forced upon it by a financial disaster - numbers that run amok."
7.19.18 - 'Sell Tech, Buy Gold' Say Bank Strategists
Gold last traded at $1,224 an ounce. Silver at $15.40 an ounce.
NEWS SUMMARY: Precious metal prices steadied Thursday on dollar strength. U.S. stocks drifted lower as investors digested the latest corporate earnings, Trump's Fed criticism and trade war fears.
Gold at one-year low and a record number of investors in survey say it's a buy -CNBC
"Gold has lost its shine, falling to a one-year low. For contrarians, however, it may be the time to buy. A record number of fund managers, surveyed by Bank of America Merrill Lynch, said they see gold as undervalued. In the survey, 17 percent of the fund managers said the precious metal may be too cheap, while more than half of the 178 fund managers said the most crowded trade was in the FAANG stocks, a reference to Facebook, Apple, Amazon, Netflix and Google's parent Alphabet. The Bank of America strategists said investors trying to take an opposite view of the prevailing market trend should buy gold and sell tech shares. 'We cyclically advise contrarian bears to position for 'peak profit, peak policy stimulus' theme via long gold, short US tech,' they wrote in a note to clients."
Three Metrics Of Stock Market Overvaluation -Forbes
"Stocks are overpriced. This article will look at three ways to answer the question of just how much....Lowering expectations should cause present and future retirees to alter their behavior in two ways. They should, first of all, take another look at whatever return assumption is built into a retirement plan...The other thing investors need to do, in an era of historically rich stock prices, is to think about what they might do if and when a crash arrives....Measure I: Cape - Robert Shiller made the 'cyclically adjusted price/earnings' ratio famous....The Cape on Shiller's website is 32 today...It has averaged 18 since the end of 1935, and on that score stocks seems to be 78% too high right now....Measure II: Market Versus GDP - In 1975, you could purchase all the publicly traded stocks in the U.S. for a sum equal to 40% of that year’s gross domestic product. Today, your tab, per dollar of GDP, would run four times as high....Measure III: Price to Sales - Standard & Poor’s publishes sales for its 500 index, beginning in late 2010. The ratio has almost doubled in the last seven years....There you have them: three pieces of evidence that the market is getting a little crazy...Adjust your behavior accordingly."
Why Technology Prophet George Gilder Predicts Big Tech's Disruption -Forbes
"Over the last four decades, George Gilder has been one of the most influential writers on economic growth and prosperity, and technology’s key creative role in them....'In my last book, The Scandal of Money, I talk about governments having forgotten what money is for and how it works. As a result, they're issuing more and more of it, on the assumption that somehow money constitutes wealth, instead of realizing that money measures wealth. Now, the biggest industry in the world economy is the $5.1 trillion per day currency-trading carnival, which, in the end, doesn't even yield stable currencies....It's not good to have most of the stock market's advance be in five companies, which buy back their own stock and buy up the shares of their rivals. I'm talking about Google, Apple, Facebook, Amazon and Microsoft. Those companies are supremely great companies, but they're going over the hill....I think it's a Silicon Valley dementia that's going on, which probably results from a religious collapse. I think G.K. Chesterton put it very well: When people stop believing in God, they don’t believe in nothing; they start believing in anything....The Google paradigm of massive data centers and artificial intelligence determinism will be transcended in the next era. We'll leave behind the big tech view that human progress springs from some inexorable Darwinian model that allows the big winners to take all, and then project themselves into outer space....It's the Great Unbundling. We'll dissolve all the GAFA fab-five conglomerates. We'll disperse the clouds of concentrated computing and commerce. We're moving beyond digital and silicon to analog and carbon nanotubes and hybrid chips with sensors and 5G antennas everywhere. Even money is being disaggregated and reinvented."
Mr. Gilder's new book, "Life After Google" promises to explain how and why the economy and Internet is about to be transformed with the architecture of blockchain. Unsurprisingly, Gilder sees physical gold as playing a central role in upcoming cryptocurrencies, such as G Coin. Stay tuned for a more detailed book review in this space. Meanwhile, here is a review of George Gilder's important 2015 book, The 21st Century Case For Gold: A New Information Theory of Money.
Why Real Wages Still Aren’t Rising -New York Times
"The United States labor market is closing in on full employment in an economic expansion that just began its 10th year, and yet the real hourly wage for the working class has been essentially flat for two years running. Why is that?....Stagnant wages for factory workers and non-managers in the service sector - together they represent 82 percent of the labor force - is mainly the outcome of a long power struggle that workers are losing....Over the past year, for example, consumer price inflation was 2.9 percent, just about the same rate as hourly pay. Data released on Tuesday show that real weekly earnings for full-time, middle-wage workers hasn’t grown at all since early 2017....Even if workers' real wages do pick up, their gains may be too short-lived to make a lasting difference. The next recession is lurking out there, and when it hits, whatever gains American workers were able to wring out of the economic expansion will be lost to the long-term weakness of their bargaining clout."
7.18.18 - Officials' warning: US underprepared for next crisis
Gold last traded at $1,227 an ounce. Silver at $15.57 an ounce.
News Summary: Precious metal prices ended higher Wednesday as the U.S. dollar trades near lows. U.S. stocks see gains as traders continue to digest latest U.S. economic reports.
Bernanke, Geithner, Paulson warn U.S. has weaker tools for dealing with crisis - Market Watch
"The three officials who were grappled with the start of the financial crisis in 2008 warned this week that present-day regulators don’t have all the tools needed to face another panic. 'You have a more stable [financial] system today because the defences are better —but you have a weaker set of tools for dealing with an extreme crisis,' Geithner said, according to the Financial Times. Under reforms passed by Congress in the wake of the crisis, the Fed cannot lend to an institution deemed “failing” and all lending must be approved by the Treasury Secretary. The three officials spoke with a small group of reporters earlier this week in advance of the tenth anniversary of the Great Recession. They said the U.S. financial system was healthier but expressed concern about the slow pace of reform in Europe. Paulson and Bernanke also said they were worried about the rising federal deficit."
The great dollar dump: Russia liquidates US Treasury holdings- RT
"Russia is continuing to diversify state reserves away from US debt. The latest data from the US Treasury shows that Russia's share hit an 11-year minimum and totaled only $14.9 billion. The share of US sovereign debt bonds in Russia's portfolio has been reduced dramatically in recent months. Russia held $96.1 billion in US Treasuries in March before selling half its holdings in April, dropping to 22nd place among major foreign holders of American treasury securities at $48.7 billion. In 2010, Russia was among the top 10 holders of US Treasuries at $176.3 billion. With its holdings falling to $14.9 billion in May, the country is now below the $30 billion threshold for inclusion on the Treasury Department’s monthly report of major holders. On Tuesday, the Treasury released a list of 33 countries which includes the biggest holder China to the smallest Chile. Russia is no longer on the list....The head of the Central Bank of Russia (CBR) Elvira Nabiullina said in May that slashing of the holdings was result of the systematic assessment of all kinds of risks, including financial, economic and geopolitical. Meanwhile, Russia’s gold holdings have been steadily increasing, bringing its share of the precious metal to its highest level in nearly two decades. Russia’s gold holdings in May grew by one percent to 62 million troy ounces, worth $80.5 billion, according to the CBR. According to Nabiullina, gold purchases helped to diversify reserves."
Cyberthreat warnings ‘blinking red,’ says top U.S. intelligence official - The Globe and Mail
"Warning lights about cybethreats to U.S. national security are 'blinking red' and the digital attempts to undermine America are occurring daily, not just at election time, the nation’s top intelligence official said Friday. Russia has been the most aggressive foreign actor, but cybethreats also are coming from China, Iran and North Korea as well as criminal networks and individual hackers, said National Intelligence Director Dan Coats. Targets include U.S. businesses, the federal government, the military, state and local governments, academic and financial institutions and critical infrastructure, he said. 'The Department of Homeland Security and the FBI, in co-ordination with international partners, have detected Russian government actors targeting government and businesses in the energy, nuclear, water, aviation and critical manufacturing sectors,' Coats said....'These actions are persistent. They’re pervasive and they are meant to undermine America’s democracy on a daily basis, regardless of whether it is election time or not,' Coats said."
Economy is fragile, recession could occur, Harvard professor warns - Fox Business
"Renowned Harvard professor and economist Martin Feldstein said the Federal Reserve would not be prepared if a recession were to occur soon. Feldstein told FOX Business’ Maria Bartiromo during an interview on 'Mornings with Maria' on Wednesday that the economy is in good shape because of low unemployment and inflation, but despite that, it is still very fragile. While the former economic adviser for President Ronald Reagan said he can’t predict exactly when a recession could happen, he said, 'I think [the economy] is fragile because of the level of asset prices. And if the economy turns down, the Fed has no tools to offset that.' Feldstein said he’s worried that the Fed has not been preparing during the past few years for a future recession. 'The Fed made a mistake by not starting several years ago to push up the short rate,' he said, 'I think the loan rate is going to rise not just because the Fed is tightening, but because everybody sees these large fiscal deficits coming along.' As previously reported by FOX Business, more than 20 economists predicted that a big economic downturn could occur between the fourth quarter of 2019 and the second quarter of 2020, according to a report from the National Association for Business Economics."
7.17.18 - CEOs are dumping stock in their companies
Gold last traded at $1,227 an ounce. Silver at $15.61 an ounce.
News Summary: Precious metal prices fell Tuesday on Fed Chairman Powell's statements. U.S. stocks recover losses as traders digest Powell comments and latest round of corporate earnings.
CEOs are dumping stock in their companies. Here's what that means- CNN Money
"The captains of Corporate America are steering a record amount of cash into stock buybacks....Yet with their own money, executives are quietly taking a much different approach: They're cashing out. Insiders dumped $8.4 billion of their shares in May and $9.2 billion in June, according to an analysis of regulatory filings by TrimTabs Investment Research. That's the biggest two-month period of insider selling in a year. 'They're buying back from the front door, and shoveling shares out the back door,' said John Mousseau, president of CEO of Cumberland Advisors, an investment firm that manages more than $3 billion. 'It would be like going on TV to tell everyone what stocks we like, and then selling them,' he said....Vast corporate purchases of stock are a reward for shareholders, at least in the short term. Not only do buybacks provide persistent demand, which lifts share prices, but they artificially inflate earnings per share....Despite authorizing massive buybacks, insiders aren't buying much themselves. In June, insiders sold about $8 of stock for every $1 they bought, according to TrimTabs. That ratio has climbed sharply since the end of last year."
Fed's Powell: Gradual rate hikes likely but trade fights are starting to hurt the economy- USA Today
"Federal Reserve Chairman Jerome Powell said Tuesday the central bank plans to continue raising interest rates gradually amid a solidly growing economy and rising inflation, but he acknowledged the widening negative effects of U.S. trade skirmishes with other countries. 'We’ve heard a rising chorus of concerns that speak to (capital spending plans) being put on hold' because of uncertainty about trade, Powell told the Senate banking committee in his semiannual report to Congress. If that kind of fallout deepens and hurts economic growth, it could lead Fed policymakers to slow the pace of rate increases, economists say. In June, Fed policymakers forecast a total of four hikes this year, up from their estimate of three in March....Committee members also pressed Powell on why average wage growth has not picked up more, particularly for low- and middle-income workers, in light of strong job gains and the low, 4% unemployment rate. Powell said wages are unlikely to increase faster over the longer term unless businesses achieve stronger growth in productivity, or output per worker. Productivity, he conceded, could be hampered by the trade fights if they continue to discourage investment in labor-saving technology. 'It may well be,' he said."
The Rising Federal Deficit Is Fueling Growth - Bloomberg
"The federal deficit has grown a lot over the past six months. This should come as no big surprise, given the tax cuts approved by Congress and signed by President Donald Trump in December and the spending deal reached in February, but it’s still striking to see the actual numbers from the Treasury Department, which last week released data on federal revenue and outlays in June. The U.S. government’s fiscal years begin in October, so we now have data for three quarters of fiscal 2018. The Congressional Budget Office’s latest projection, which I’ve included in the chart, is that the full fiscal-year deficit will add up to $793 billion, or 3.9 percent of gross domestic product....The CBO is still projecting that the deficit will keep rising to $973 billion (4.6 percent of projected GDP) in fiscal 2019 and just over $1 trillion (also 4.6 percent of GDP) in fiscal 2020. The CBO, in a long-term budget outlook published last month, also forecast that the deficit would reach 5.1 percent of GDP in 2028, 7.1 percent in 2038 and 9.5 percent in 2048, thanks mainly to burgeoning spending on Social Security, Medicare, Medicaid and other health-care programs, and interest on the national debt.... This deficit trajectory is also probably unsustainable, likely to bring on inflation, fiscal crisis or political crisis — or all three — well before 2048 if not addressed."
Chicago May Become Largest City in U.S. to Try Universal Basic Income - The Intercept
"Chicago Alderman Ameya Pawar is worried about the future. He is concerned that a coming wave of automation could put millions of people out of work and result in more extreme politics....Pawar thinks that one way to battle racial resentment is to address the economic precarity that politicians have used to stoke it. He has decided to endorse the universal basic income — an idea that has been picking up steam across the world. The UBI is based on a simple premise: People don’t have enough money to provide for their essential needs, so why not just give them more? UBI schemes entail giving a standard cash grant to everyone — regardless of need. Traditionally, the United States has addressed poverty by delivering in-kind goods. For instance, the Supplemental Nutrition Assistance Program, formerly known as the food stamp program, issues electronic cards that can be used to purchase certain types of food. But some economists have countered that simply giving people money is more beneficial."
7.16.18 - Here's what to do before you retire
Gold last traded at $1,239 an ounce. Silver at $15.81 an ounce.
News Summary: Precious metal prices remained stable Monday as U.S. dollar fell. U.S. stocks struggled for direction as traders focused on earnings and economic data.
IMF says the global economic expansion has ‘plateaued’ - Market Watch
"The sunny outlook for the global economy seen this spring has gotten a lot darker, the International Monetary Fund said Monday. Growth is slowing in the euro area, Japan and the United Kingdom, the IMF said, in an update of its world economic outlook. The IMF continued to project global growth rates of 3.9% for this year and 2019, but said this strong growth is 'less even, more fragile [and] under threat.' 'The risk that current trade tensions escalate further - with adverse effects on confidence, asset prices and investment - is the greatest near-term threat to global growth,' said Maury Obstfeld, the IMF’s chief economist, in a statement. If current trade threats are realized and business confidence falls as a result, global output could be 0.5% below current projections by 2020, the IMF estimated. The U.S. is 'especially vulnerable' because it may find a relatively high share of its exports taxed in global markets, the report concluded....'Some of the momentum has gone out of European growth,' Obstfeld said in a briefing for reporters."
The $247 trillion global debt bomb- The Washington Post
"The untold story of the world economy — so far at least — is the potentially explosive interaction between the spreading trade war and the overhang of global debt, estimated at a staggering $247 trillion. That’s 'trillion' with a 't.' The numbers are so large as to be almost incomprehensible. Households, businesses and governments borrow on the assumption that they will service their debts either by paying the principal and interest or by rolling over the debts into new loans. But this works only if incomes grow fast enough to make the debts bearable or to justify new loans. When those ingredients go missing, delinquencies, defaults and (at worse) panics follow....Since 2003, global debt has soared. As a share of the world economy (gross domestic product), the increase went from 248 percent of GDP to 318 percent. In the first quarter of 2018 alone, global debt rose by a huge $8 trillion. The figures include all major countries and most types of debt: consumer, business and government. But to service these debts requires rising incomes, while an expanding trade war threatens to squeeze incomes. The resort to more tariffs and trade restrictions will make it harder for borrowers to pay their debts. At best, this could slow the global economy. At worst, it could trigger another financial crisis."
America's Social Security system is going broke — here's what to do before you retire - Business Insider
"We've spent a lot of time in our regular conversations talking about the looming retirement crisis around the world. The data is horrific. Pension and Social Security programs in nearly every developed nation are woefully underfunded. In the United States, senior government officials including the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services, have stated unequivocally that Social Security's trust funds will run out of money in 2034. More importantly, there simply aren't enough workers in the work force to sustain the program over the long-term. It's something known as the 'worker-to-retiree ratio'; essentially, Social Security requires a certain number of workers paying into the system for every retiree receiving benefits....Social Security tax in the US amounts to 12.4% of a worker's salary. So when the financial burden of a single retiree's benefits is paid by just 2.6 workers, the resulting tax revenue won't be sufficient to pay benefits unless: 1) Taxes on those workers are dramatically increased, and/or 2) Benefits for retirees are slashed. It will probably be a combination of the two. Bottom line, the people who run this program are telling the entire world that Social Security will soon run out of money; and they're publishing alarming statistics about the steep decline in the worker-to-retiree ratio."
U.S. files WTO disputes against five members including China, Canada, and the EU - The Washington Times
"The U.S. filed five disputes at the World Trade Organization on Monday against trading partners over retaliatory tariffs. China, the European Union, Canada, Mexico, and Turkey are all being accused of violating trade agreements with the U.S. after each responded to President Trump's tariffs on steel and aluminum with trade barriers of their own. 'These tariffs appear to breach each WTO Member’s commitments under the WTO Agreement. The United States will take all necessary actions to protect our interests, and we urge our trading partners to work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors,' U.S. Trade Representative Robert Lighthizer said in a statement. 'The actions taken by the President are wholly legitimate and fully justified as a matter of U.S. law and international trade rules. Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies,' he said."
7.13.18 - Prices are rising faster than they have in six years
Gold last traded at $1,246 an ounce. Silver at $15.97 an ounce.
News Summary: Precious metal prices softened Friday as trade war concerns eased. U.S. stocks advanced as investors digested first batch of second-quarter earnings.
How To Invest In An Era Of $100 Trillion Financial Obligations: Part I - Forbes
"It’s different this time, and it's also not different this time. It's different this time because the credit-driven global U.S. economy is burdened with a monumental level of financial obligations relative to GDP. According to the Bank of International Settlements ("BIS"), loans and debts outstanding which burden corporations, households, and the government in the United States have reached $48.3 trillion in the United States or 250% of GDP. Including off-balance sheet items, the effective level of debt outstanding is almost $100 trillion, at $99.6 trillion, or more than 500% of GDP. It’s different this time because the U.S. economy has never piled on so many financial obligations. With that said, it's also not at all different this time, because this is not the first time in history that a society's financial obligations have grown to unsustainable levels. As just one example, students have amassed more than $1.5 trillion of student loans, which have increased at a rate of more than 10% per annum since 2006. This story has been repeated often through history, and it usually ends in pain for those who hold their savings in cash or bonds....If interest rates were to rise to historical levels, these interest rate payments would crush the U.S. economy and likely result in another debt crisis. Even without the Federal Reserve raising interest rates further, interest payments should exceed 10% of GDP sometime in 2018. These payments keep households from saving money for a rainy day, corporations from investing in new factories, and governmental entities from investing in basic infrastructure."
Prices are rising faster than they have in six years- CNN Money
"If you feel like stuff has been getting more expensive lately, you're right. The Consumer Price Index, which tracks most items on the average city-dwelling American's shopping list, rose 2.9 % last month — its fastest pace since 2012. When prices speed up, paychecks don't go as far. Average hourly earnings only increased 2.7% over the year in June, which means that most workers' paychecks actually aren't going any further at all. The Federal Reserve also monitors prices closely to decide whether to hike interest rates. Those rates influence how much people pay for all kinds of credit, and can throw off federal budget projections if they start rising too fast. The Fed also watches a slightly different metric called Personal Consumption Expenditures, or PCE, which capture rural residents as well as indirect costs like employer-sponsored health benefits. But there's a lot going on underneath the average rate that determines whether any particular individual is paying more, depending on what they typically buy. For example, much of the recent boost is driven by the price of oil, which has recovered from under $30 a barrel during a supply glut in 2015 to over $70 a barrel today. High oil prices raise the cost of everything from hamburgers to Uber rides, but people who depend on cars for transportation are going to feel it a lot more than bike commuters."
The world could soon run out of gold, Mining experts warn - The Star
"Mining experts have warned that the world's gold supplies could soon be depleted. Experts across the industry said we will soon hit 'peak gold' - the point at which gold discoveries start to decline as there are no more new resources to discover. According to scientists, the 'peak gold' point will be reached in 2019 and supplies of the precious metal are set to tail off year-on-year from that point onward....Last month, Rudy Fronk, Chairman and CEO of Seabridge Gold said: 'Peak gold is the new reality in the gold business with reserves now being mined much faster than they are being replaced.' While Nick Holland, CEO of South Africa's largest gold producer Gold Fields, said: 'We were all talking about how production was going to increase every year. I think those days are probably gone.' Kevin Dushnisky, President of mining giant Barrick Gold, commented: 'Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook.'"
The U.S. Dollar Could Be the Trade War’s Hidden Victim - Barron's
"Could the Trump administration’s tariffs on imports curb exports of what arguably is the nation’s No. 1 brand? That would be the dollar, the greenback—a brand with global recognition and an appeal that exceeds even the Big Mac, Marlboros, Coca-Cola, or the iPhone. A sharply reduced U.S. trade deficit would provide fewer dollars—which the world uses for finance and commerce as well as a store of value—to the rest of the globe. A shrinkage, or at least slower growth, in global dollar supplies could result in tighter financial conditions and possibly a debt crisis. That’s the provocative scenario painted by Anne Stevenson-Yang, who runs J Capital Research in China....The world effectively has been on a dollar standard, just as it was on a gold standard for the second half of the 19th century until World War I, and that dollar standard effectively underpins the world trading system, she notes. When President Richard Nixon severed the dollar’s last link to gold in 1971, it became a fiat currency with no stable value. 'That meant that the U.S. could project any level of U.S. currency around the world to support its own national economic growth and lifestyle improvements that zoomed past productivity improvements,' she writes. This 'exorbitant privilege'—the ability to print the world’s reserve currency—lets America live beyond its means."
7.12.18 - Central Banks Keep Buying Gold
Gold last traded at $1,246 an ounce. Silver at $15.97 an ounce.
News Summary: Precious metal prices rose Thursday on bargain-hunting and short covering. U.S. stocks also rose as gains in internet and technology shares helped overshadow ongoing trade concerns.
Trade war, tariffs and inflation will be the big worries this earnings season- Market Watch
"The second-quarter earnings season will start in earnest on Friday with the first reports from big U.S. banks and investors are expecting the overall numbers to be strong.....But against a backdrop of trade war concerns, rising inflation, a stronger dollar and tensions with many of America’s closest allies, companies are likely to be cautious in offering guidance. The Trump Administration late Tuesday unveiled 10% tariffs on another $200 billion in Chinese goods. Beijing immediately promised retaliation and criticized the White House for displaying a 'loss of reason.'...The U.S. and China had already imposed levies on $34 billion worth of each other’s goods last week, setting the stage for a trade dispute that is expected to hurt all of the companies that make and export products now subject to tariffs. The goods in question included steel, aluminum, whiskey, maple syrup, solar panels, newsprint, jeans and orange juice. To that list can now be added meat, fish, butter, eggs, vegetables, grains, tobacco, oil, chemicals, building materials, carpets and clothing...The tit-for-tat action is the culmination of months of threats and counter-threats that have kept the major stock-market indexes like the Dow Jones Industrial Average and the S&P trading in a narrow range. Analysts are now beginning to take a more cautious approach to the prospect of a full blown trade war that could have a bigger effect on the economy. Last week, an analyst from Morgan Stanley Wealth Management wrote that, 'we no longer believe that the implications of Washington’s trade talk are benign.'"
The Worst Cybersecurity Breaches of 2018 So Far - Wired
"Looking back at the first six months of 2018, there haven't been as many government leaks and global ransomware attacks as there were by this time last year, but that's pretty much where the good news ends. Corporate security isn't getting better fast enough, critical infrastructure security hangs in the balance, and state-backed hackers from around the world are getting bolder and more sophisticated....Data breaches have continued apace in 2018, but their quiet cousin, data exposure, has been prominent this year as well. A data exposure, as the name suggests, is when data is stored and defended improperly such that it is exposed on the open internet and could be easily accessed by anyone who comes across it....After the revelation of a data exposure, organizations often offer the classic reassurance that there is no evidence that the data was accessed improperly. And while companies can genuinely come to this conclusion based on reviewing access logs and other indicators, the most sinister thing about data exposures is that there's no way to know for sure what exactly went down while no one was watching."
Veteran investor Mobius sees a worldwide financial crisis on the horizon - The Star
"A US-China trade war and a further 10% drop in emerging-market stocks might not be the worst things to happen this year, according to Mark Mobius. The veteran investor in developing nations also sees a worldwide financial crisis on the horizon. 'There’s no question we’ll see a financial crisis sooner or later because we must remember we’re coming off from a period of cheap money,' he said in an interview in Singapore. 'There’s going to be a real squeeze for many of these companies that depended upon cheap money to keep on going.' Tighter liquidity as the Federal Reserve and European Central Bank normalise monetary policy has weighed on emerging markets this year, along with the rising dollar and deteriorating trade backdrop....The MSCI Emerging Markets Currency Index has dropped around 7% from a high in late March, forcing central banks from Turkey to Argentina and Indonesia to raise rates to defend their currencies. The rate hikes may be a 'short-term fix', but could be counter-productive for countries with high amounts of debt, Mobius said, adding that governments need to put their finances in order to restore investor confidence."
Standard: Central Banks Remain Gold Buyers; Indian Demand Picks Up- Kitco
"Central banks remain noted gold buyers and there are signs of demand picking up in India, says Standard Chartered Bank. Gold prices have fallen lately, which the bank blames on U.S. dollar strength. 'Physical demand will be key to tracking how solid the floor for prices is, but in the seasonally slow period for demand, it will likely be fragile,' Standard says. 'The exception here is potential demand growth in Turkey amid political and economic uncertainty. In an environment lacking strong investment demand, physical demand sets the price. But not everyone is selling gold – central banks added to reserves in May, demand in India has shown signs of life, and risk reversals suggest there is some hesitant appetite to establish long positions.' Gold prices started to edge lower in May and India’s gold imports rose by 36% that month compared to April, Standard says. Imports were down 31% year-on-year. However, Standard says, 'If demand does pick up significantly counter-seasonally, inventory will likely be depleted quickly, pushing local premia higher.' Meanwhile, International Monetary Fund data show that central banks continued to add to their gold reserves last month, Standard says. Russia was the largest buyer, adding 18.4 tonnes, taking year-to-date purchases to 89.5 tonnes."
7.11.18 - Cashless Movement Backlash
Gold last traded at $1,244 an ounce. Silver at $15.81 an ounce.
News Summary: Precious metal prices eased back Wednesday as trade tensions intensified. U.S. stocks suffered losses as the Trump administration announced new tariffs on Chinese goods.
Dow falls 200 points after US unveils new tariffs on Chinese goods - CNBC
"Stocks traded sharply lower on Wednesday as a trade war between the U.S. and other major economies intensified, with the Trump administration unveiling new tariffs on Chinese goods....President Donald Trump's administration published late Tuesday a list of 10 percent duties on $200 billion worth of Chinese goods. The tariffs won’t come into effect immediately, but rather face a review process, with hearings taking place in mid-to-late August. 'At this point I'm hoping for more science in searching for a deal and less art,' said Peter Boockvar, chief investment officer at Bleakley Financial Group. 'China seems to have no interest in bending ... and they will retaliate.' The announcement came just days after both nations imposed $34 billion worth of tariffs on each other. 'The sharp market reaction to last night’s announcement by the Trump administration ... shows how sensitive markets remain to any tariff news,' said Jeffrey Kleintop, chief global investment strategist at Charles Schwab. Kleintop added that second-quarter results could 'offer some insight into whether tariffs are having any actual impact on 'hard' data rather than in sentiment reflected in surveys and markets. So far, we haven’t seen any material impact.'"
Wholesale inflation jumps to six-year high, PPI shows - Market Watch
"The wholesale cost of goods and services rose in June at the highest yearly rate in almost seven years, reflecting broad inflationary pressures in a fast-growing U.S. economy. The producer price index rose 0.3% June, the Labor Department said Wednesday. That’s a tick above the MarketWatch forecast. The 12-month rate of wholesale inflation, meanwhile, climbed to 3.4% from 3.1%, marking the highest perch since the waning months of 2011....Rising oil prices have played a big part in pushing up wholesale inflation. The cost of transportation such as trucking, rail and ocean-bound shipping continued to increase, however. Companies are paying more to ship goods with the economy so strong and shortages of labor developing....Inflation in the U.S. has risen sharply in the past year owing to rising oil prices, higher rents and medical costs and a muscle-bound economy chafing at its restraints....If prices keep rising the Federal Reserve will feel compelled to raise interest rates more aggressively. That would raise the cost of borrowing for businesses and consumers. Complicating matters are growing tensions over trade and the imposition of tariffs that could put further upward pressure on prices."
Foreign investment in the United States plunged 32% in 2017 - CNN Money
"The amount of money coming into American companies from overseas fell 32% last year. Foreign investors spent $259.6 billion to acquire, launch, and expand businesses in the United States in 2017, according to numbers released Wednesday by the US Bureau of Economic Analysis. That's down from an historic high of $439.5 billion in 2015.... The United States wasn't the only country to receive less money from outside its borders last year. According to the Organization for Economic Cooperation and Development, global foreign direct investment flows were down 18% in 2017 from the previous year and nearly 24% from its post-recession high in 2015, which the OECD attributed to a surge in financial and corporate restructuring....'Last year, there was a lot of uncertainty,' McLernon says. 'Multinational companies in general are concerned about how governments will be treating foreign companies operating in their countries. Cross-border acquisition is not surprisingly taking a hit from economic nationalism, not just in the U.S. but also worldwide'"
Backlash building to cashless movement: 'We must ask ourselves always, not just "can we"? But "should we"?' - Chicago Tribune
"Aaron Bateman pulled out a few $20 bills to pay for a taco lunch in the nation's capital. To his surprise, his money was no good in the city where money is printed....Critics of no-cash policies say they shut out the one in 10 city residents who don't have bank accounts and undocumented immigrants who can't easily sign up for cards. Some people also pay in cash so they can better track their spending or to avoid having their card information stolen. Heeding these concerns, several lawmakers have introduced a bill to require retailers to accept cash.... Bateman, who tried to pay in cash at Surfside, said he was lucky his girlfriend brought her debit card with her so they could pay. The 22-year-old cook, who was on vacation from Norfolk, likes paying in cash so he doesn't have to constantly check his bank account to avoid overdrafts. 'You have your money in your hand and know what you can do with it,' Bateman said. 'It's a little bit better money management unless you are on top of your account like every five minutes.'... 'Not everybody is able to buy a smart phone. Not everybody is in a position where they can get a credit card. Not everybody is even in a position where they have a stable bank account to be able to use the debit card. But they are hungry too, and have $10 in their pockets and they would like to spend their legal American form of tender, known as cash, with you,' said Amsterdam Falafelshop Owner Arianne Bennett in an email. 'As society and technology evolves, we must ask ourselves always, not just 'can we'? But 'should we'?'"
7.10.18 - How China could hurt U.S.
Gold last traded at $1,255 an ounce. Silver at $16.08 an ounce.
News Summary: Precious metal prices ease back Tuesday after previous session's gains. U.S. stocks end higher, but weighed by a slump in financials.
How China could hurt U.S. once it ran out of imports to tax - The Washington Times
"In his trade war with China, President Donald Trump wields one seeming advantage: The United States could ultimately slap tariffs on more than $500 billion in imported Chinese goods. Beijing has much less to tax: It imported just $130 billion in U.S. goods last year. Yet that hardly means China would be powerless to fight back once it ran out of U.S. goods to penalize. It possesses a range of other weapons with which to inflict pain on the U.S. economy. Indeed, China's Commerce Ministry has warned of 'comprehensive measures' it could take against the United States - from harassing automakers, retailers or other American companies that depend on China to drive revenue to selling U.S. government debt or disrupting diplomatic efforts over North Korea. Some of those steps might hurt China's own interests. But Beijing might still be willing to deploy them, at least temporarily, if its trade war with Washington were to drag on....Nationalists point to China's $1.2 trillion holdings of U.S. government debt as leverage. Beijing might suffer losses if it sold enough to influence U.S. debt financing costs - but such sales might become necessary....To get the dollars it needs, the People’s Bank of China might 'become a net seller of U.S. Treasurys,' said Carl B. Weinberg of High-Frequency Economics in a report. 'Punishing the U.S. Treasury market is one of the tactics China has available to retaliate against unilateral U.S. tariffs,' said Weinberg."
Global debt jumped by $8 trillion in Q1, rising to record $247 trillion - Yahoo! Finance
"The amount of debt held in the world rose by the largest margin in two years during the first quarter of 2018, growing by $8 trillion during the first three months of the year, the Institute of International Finance reported Tuesday. Global debt has now risen to more than $247 trillion, which is 318% of the world’s gross domestic product. Additionally, IIF found that global debt has risen by $30 trillion since just the fourth quarter of 2016. 'The pace is indeed a cause for concern,' IIF’s Executive Managing Director Hung Tran told Yahoo Finance during a call with reporters. 'The problem with the pace and speed is if you borrow or if you lend very quickly … the quality of the credit tends to suffer.' That means more governments, businesses and individuals have been borrowing that could have trouble paying the money back. 'The quality of creditworthiness has declined sharply,' Tran added....With global growth losing some momentum and becoming more divergent, and U.S. rates rising, the organization said that worries about credit risk are returning to the forefront, including in many developed economies, such as the United States and Western Europe."
Brett Kavanaugh is President Trump's nominee for the Supreme Court - USA Today
"President Donald Trump nominated federal appeals court judge Brett Kavanaugh to replace Justice Anthony Kennedy on the Supreme Court Monday night, a pivotal choice that could move the court in a more conservative direction for decades. At a White House ceremony announcing the pick, Trump described Kavanaugh as a man of 'impeccable credentials' and a 'true thought leader among his peers.' Long seen as the front-runner for the position because of his academic pedigree, sterling reputation and lengthy career in government service, Kavanaugh had to fight off late support for several other candidates that had Trump wavering up to the final hours. A former lawyer and top aide to President George W. Bush, Kavanaugh, 53, has served on the powerful U.S. Court of Appeals for the District of Columbia Circuit for the past 12 years. It's the same court that produced three current high court justices. He also worked for independent counsel Kenneth Starr during the Whitewater investigation of President Bill Clinton."
For the U.S. economy, this could be as good as it gets - CBS News
"Unemployment in the U.S. is at its lowest rate in more than 17 years. Paychecks are growing. In the second quarter, the nation's GDP -- the broadest gauge of economic growth -- is approaching an unheard-of 5 percent by some measures. Let the good times roll? President Donald Trump certainly thinks so, regularly pointing to the recent surge as proof his policies are working and promising more to come. And yet many economists, stock-watchers and other financial prognosticators have a different view. They think the economic tide is cresting and is set to slow -- and soon. Here are six reasons U.S. economic performance may have already peaked. The current expansion is something of an anomaly. Since the Second World War, the economy has typically expanded for five to six years before going into a recession. But since the Great Recession officially ended in June 2009, the U.S. has been expanding for nine years, and this expansion is now second only to the one between 1991 and 2001. While it may be too early to predict a recession, a growing pile of evidence indicates that growth isn't likely to speed up...Indeed, despite a historically tight labor market, wages have been increasing only modestly, rising an average of 2.7 percent year-over-year. Meanwhile, inflation is rising at roughly the same rate. That means any pay bump the typical worker gets will likely be eaten up by increasingly expensive fuel or record-high rent."
7.9.18 - Major German Bank Refused To Hand Over Client’s Gold
Gold last traded at $1,259 an ounce. Silver at $16.13 an ounce.
News Summary: Precious metal prices rose Monday as a retreat in the U.S. dollar helped to lift the metal to its strongest finish in nearly two weeks. U.S. stocks see triple-digit gains; financials, energy and industrial stocks rally.
British Prime Minister May says Parliament should prepare for several outcomes, including the possibility of no Brexit deal - CNBC
"British Prime Minister Theresa May said Monday that preparations for a "no deal" Brexit would be stepped up, and that Parliament should prepare for a number of different outcomes. The comments from the U.K. leader followed the abrupt resignation Monday of a key member of May's Cabinet, Foreign Secretary Boris Johnson. David Davis, the minister directly charged with handling Britain's exit from the European Union, resigned hours before. May's critics seized on the dual departures to chastise May's handling of Brexit, and to suggest that her government is ill-suited to facilitate the complex disentanglement of two of the world's major economies.... May and European Union leaders have been reluctant to address the possibility of the E.U. and the U.K. failing to reach an agreement on Britain's departure from the E.U. Failure to reach a deal could imperil the E.U.'s budget, as well as the rights of citizens in the U.K. and E.U. to live and travel away from home."
Andrew Maguire Says Major German Bank Just Refused To Hand Over Client’s Physical Gold - King World News
"It’s happened again. London whistleblower Andre Maguire told King World News that one of the largest banks in Germany just refused to return a client’s gold the bank was supposedly storing for the client....'over the last few months we have been observing Swiss and German banks enforcing cash and gold withdrawal limits for clients. Currently, Swiss banks are capping client cash withdrawals to between 100,000 – 200,000 euros. Although the onus is placed upon individual banks to decide cash withdrawal limits for their clients, we have recently seen these limits enforced more strictly. This has to be an unannounced official mandate as it is now being widely reported by our clients....It’s important to understand that these cash withdrawal limits also determine physical gold withdrawal limits. It is the strictly enforced physical gold withdrawal limits that have our attention. Following at least 10 similar reports to us of banks refusing to deliver clients’ physical gold bars, this week a very wealthy client sought to remove 500 kilos of his physical gold from a German bank for safekeeping in a secure, independent vault. The bank refused delivery of his gold bars'"
A record number of folks age 85 and older are working. Here’s what they’re doing - The Washington Post
"Seventy may be the new 60, and 80 may be the new 70, but 85 is still pretty old to work in America. Yet in some ways, it is the era of the very old worker in America. Overall, 255,000 Americans 85 years old or older were working over the past 12 months. That's 4.4 percent of Americans that age, up from 2.6 percent in 2006, before the recession. It’s the highest number on record. They're doing all sorts of jobs — crossing guards, farmers and ranchers, even truckers, as my colleague Heather Long revealed in a front-page story last week. Indeed, there are between 1,000 and 3,000 U.S. truckers age 85 or older, based on 2016 Census Bureau figures. Their ranks have roughly doubled since the Great Recession. America’s aging workforce has defined the post-Great Recession labor market. Baby boomers and their parents are working longer as life expectancies grow, retirement plans shrink, education levels rise and work becomes less physically demanding. Labor Department figures show that at every year of age above 55, U.S. residents are working or looking for work at the highest rates on record."
World Bank CEO Adds to Voices of Worry Over Global Debt Pileup- Bloomberg
"Global debt is becoming a bigger worry as the global policy tightening cycle takes hold, a top boss at the World Bank warned Monday. 'After a decade of low interest rates, the corporate and public debt in many places has ballooned to a staggering $164 trillion,' Kristalina Georgieva, chief executive officer of the World Bank, said in an interview in Singapore on Monday with Bloomberg Television’s David Ingles and Haidi Lun. 'With interest rates going up, that attention on debt sustainability has to be stronger.' Central banks across the world are under pressure to follow a Federal Reserve that’s raising interest rates faster than initially anticipated, putting particular stress on emerging markets and developing economies. The need for structural policy changes, including responses to waves of anti-globalization, remains great as policy makers in most economies haven’t taken sufficient action during the extended period of low borrowing costs, Georgieva said...World debt, including household debt, ballooned to $237 trillion in the fourth quarter of 2017, according to calculations by the Washington-based Institute for International Finance. That’s more than $70 trillion higher than a decade ago."
7.6.18 - Celebrating America's Founders: Adams
Switzerland chooses gold bullion over paper wealth backed by US dollar -RT
"Another country is betting on physical gold. Switzerland's pension fund has boosted its investments in bullion, switching from the paper-backed securities in US dollars. 'The Swiss government Pension System decided to change from paper gold in the amount of 700 million CHF into physical gold and store it in Switzerland. The 700 million only stands for 2 percent of the total assets, but it is quite a surprise that they do this,' Claudio Grass, an independent precious metals advisor and Mises Ambassador told RT.com. According to Grass, it is a strong signal that people should take seriously, since a pension fund is an investment vehicle that has a long-term strategy. 'Physical gold is the best way to hedge as well as to accumulate wealth over decades. If you would have purchased for $100,000 gold in mid 70ties the holding without doing anything would be worth more than $2 million,' the analyst said. Another factor why the pension fund demanded physical gold was that they understand that paper gold just represents a claim on gold in a highly paper-leveraged gold market, Grass explained....Grass adds that countries are noting the geopolitical shift from West to East and that is why they are buying more real gold instead of the US dollar-based papers."
John Adams -History.com
One of the leading figures of early American history, Benjamin Franklin (1706-90) was a statesman, author, publisher, scientist, inventor and diplomat. Born into a Boston family of modest means, Franklin had little formal education. He went on to start a successful printing business in Philadelphia and grew wealthy. Franklin was deeply active in public affairs in his adopted city, where he helped launch a lending library, hospital and college, and garnered acclaim for his experiments with electricity, among other projects. During the American Revolution, he served in the Second Continental Congress and helped draft the Declaration of Independence in 1776. He also negotiated the 1783 Treaty of Paris that ended the Revolutionary War (1775-83). In 1787, in his final significant act of public service, he was a delegate to the convention that produced the U.S. Constitution.
Did you know? In November 1800, John Adams became the first president to reside in the White House. Construction of the presidential home, which was designed by Irish-born architect James Hoban, began in 1792. President Theodore Roosevelt (1858-1919) officially named it the White House in 1901.
Famous Adams quotes -Brainy Quotes
"Old minds are like old horses; you must exercise them if you wish to keep them in working order."
"The furnace of affliction produces refinement, in states as well as individuals."
"All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation."
Steve Hilton: I didn't get the true genius of America's founders till I moved here. Here's what worries me now. -Fox News
"July Fourth is a moment for all of us to reflect on America and what it means – and that's particularly true this year, as the holiday comes right after a week in politics that revealed the great challenges America's system of government is facing....I studied America's system of government years ago when I was an undergraduate at Oxford University...It wasn't until I actually lived in the U.S. that I started to understand the true genius of America's founders and what they put in place two-and-a-half centuries ago. I saw the genius of the Founding Fathers most vividly of all in a family visit to Philadelphia a couple of years ago. While there, I took my two sons to the National Constitution Center, a truly wonderful place that all Americans should visit if they can. The highlight of the Constitution Center is a regular live performance telling the story of the Declaration of Independence, the Revolutionary War, the years leading up to the Constitutional Convention...That performance literally moved me to tears as it brought to life in the most immediate and powerful way the beautiful idea at the heart of America: liberty under the law, an idea that had never before been expressed and guaranteed by any nation....But sadly, I also see those virtues under threat....The one thing that underpins all these great American virtues: the Constitution. President Trump was duly elected according to the Constitution. But the Democratic and Republican establishments have worked nonstop to undermine his legitimacy....The melting pot; decentralized government; a republic of equals; a Constitution enshrining the precious ideal of people power. It is all under threat this Fourth of July - and we need to fight for it."
7.5.18 - Celebrating America's Founders: Franklin
Can Trump Counter Soaring Gasoline Prices? -OilPrice.com
"Oil prices surged to their highest level in more than three years last week, as the number and volume of supply outages continues to rise. The odds of a significant shortfall in supply are also growing by the day....The 180-degree turnaround in the oil market from May is pretty staggering, even for an oil market steeped in volatility and uncertainty. In late May, rumors of higher output from Saudi Arabia and Russia led to a crash in prices, and led to speculation of another lengthy downturn. By late June, however, it isn't clear that even a massive 1-million-barrel-per-day increase from OPEC will be enough to fill the worsening supply gap. That means higher oil prices are likely....'We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year,' Hootan Yazhari, head of frontier markets equity research at Bank of America Merrill Lynch, said....The Trump administration will have no qualms about pulling barrels out of the salt caverns in Texas and Louisiana, and dumping oil onto the market to push prices down, especially as he faces political headwinds heading into the November midterm elections."
Benjamin Franklin -History.com
One of the leading figures of early American history, Benjamin Franklin (1706-90) was a statesman, author, publisher, scientist, inventor and diplomat. Born into a Boston family of modest means, Franklin had little formal education. He went on to start a successful printing business in Philadelphia and grew wealthy. Franklin was deeply active in public affairs in his adopted city, where he helped launch a lending library, hospital and college, and garnered acclaim for his experiments with electricity, among other projects. During the American Revolution, he served in the Second Continental Congress and helped draft the Declaration of Independence in 1776. He also negotiated the 1783 Treaty of Paris that ended the Revolutionary War (1775-83). In 1787, in his final significant act of public service, he was a delegate to the convention that produced the U.S. Constitution.
Did you know? Benjamin Franklin is the only founding father to have signed all four of the key documents establishing the U.S.: the Declaration of Independence (1776), the Treaty of Alliance with France (1778), the Treaty of Paris establishing peace with Great Britain (1783) and the U.S. Constitution (1787).
Famous Franklin quotes -Brainy Quotes
"Well done is better than well said."
"By failing to prepare, you are preparing to fail."
"The Colonies would gladly have borne the little Tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament."
Hamilton, Madison, and the Paradox at America’s Heart -National Review
"The tension between nationalist ambitions and republican principles goes all the way back to our nation's founding. James Madison and Alexander Hamilton belonged to a political movement in the 1780s that generally cohered around three basic principles. The first was a commitment to liberal government, which emphasized the protection of individual rights....Second, they were part of the tradition of republicanism, or self-government...Liberty, in the republican conception, has less to do with protecting property and more to do with the proper construction of the state....Third, they were nationalists, arguing that the 13 states had to bind themselves more firmly together if the ideals of liberalism and republicanism were to be secured. This view was more practical than moral, as it involved a question of how to achieve the shared principles of liberalism and republicanism....The key lesson from the Madison–Hamilton battle is not that one was right and the other wrong, but that their feud represents a clash of fundamental American values. The Constitution was premised on liberalism, republicanism, and nationalism - on the supposition that only a stronger, more prosperous union of the states would protect individual rights and secure self-government."
7.3.18 - Celebrating America's Founders: Jefferson
Gold last traded at $1,253 an ounce. Silver at $16.04 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as energy shares surged, despite heightened fears of a trade war between the U.S. and major economies around the world.
The Dollar Is a Source of Global Instability -Rickards/Daily Reckoning
"The dollar constitutes about 60% of global reserves, 80% of global payments and almost 100% of global oil transactions. So the dollar's strength or weakness can have an enormous impact on global markets....The dollar is up 12.5% in the past four years on the Fed's index, and that's bad news for emerging-markets (EM) debtors who borrowed in dollars and now have to dig into dwindling foreign exchange reserves to pay back debts that are much more onerous because of the dollar's strength....A new EM debt crisis has already started. Venezuela has defaulted on some of its external debt, and litigation with creditors and seizure of certain assets are underway. Argentina's reserves have been severely depleted defending its currency, and it has turned to the IMF for emergency funding....This new crisis could take a year to spread, so it's not too late for investors to take precautions, but the time to start is now."
How Trade Wars Become Hot Wars -Corbett Report
"America is in a funk. Slipping into an economic and cultural morass and at risk of losing its footing on the global chessboard, American workers find themselves working harder than ever and still falling further and further behind. How can this be?....Americans are getting hammered by their foreign competition, the politician says, and they need strong tariffs to save the economy and restore the might of the USA. These tariffs outrage even friendly nations and provoke retaliatory measures that spiral into an all-out trade war. 2018? Donald Trump? No. 1930. Senator Reed Smoot. The post-WWI reconstruction boom led not to a happy increase in global trade, but an increase in global trade tensions. Reparations and war debts could only realistically be paid in goods, so everyone wanted a trade surplus. Throw in the gradual breakdown of the international gold standard, vicious competition among nations that had been in all-out war only years earlier, and the beginnings of the Great Depression, and by 1930 you had the perfect storm of economic conditions to bring about a global trade war. And that is exactly what happened. The Republicans, led by Hoover, had come to power in 1928 promising American agricultural workers that the government would protect them from foreign competition. Senator Reed Smoot, a Mormon apostle from Utah and chairman of the Senate Finance Committee, championed higher tariffs across the board and, sponsoring a bill with Congressman Willis Hawley from Oregon, he got his wish...The act raised tariffs on over 20,000 goods. The average price raise was 59.1% and, when the bill was signed into law by President Hoover on June 17, 1930, the price of some goods quadrupled overnight....All the conditions for the same Smoot-Hawley pattern of protectionist tariffs, global trade war, economic collapse and, eventually, all-out war, are now in place....Buckle up, everyone. These next few years are going to be one hell of a ride."
Celebrating America's Founders: Thomas Jefferson -History.com
Thomas Jefferson (1743-1826), author of the Declaration of Independence and the third U.S. president, was a leading figure in America’s early development. During the American Revolutionary War (1775-83), Jefferson served in the Virginia legislature and the Continental Congress and was governor of Virginia. He later served as U.S. minister to France and U.S. secretary of state, and was vice president under John Adams (1735-1826). Jefferson, who thought the national government should have a limited role in citizens’ lives, was elected president in 1800. During his two terms in office (1801-1809), the U.S. purchased the Louisiana Territory and Lewis and Clark explored the vast new acquisition. Although Jefferson promoted individual liberty, he was also a slaveowner. After leaving office, he retired to his Virginia plantation, Monticello, and helped found the University of Virginia.
Did you know? In 1815, Jefferson sold his 6,700-volume personal library to Congress for $23,950 to replace books lost when the British burned the U.S. Capitol, which housed the Library of Congress, during the War of 1812. Jefferson's books formed the foundation of the rebuilt Library of Congress's collections.
Famous Jefferson quotes -Brainy Quotes
"Honesty is the first chapter in the book of wisdom."
"Commerce with all nations, alliance with none, should be our motto."
"We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness."
7.2.18 - Celebrating America's Founders: Washington
Gold last traded at $1,242 an ounce. Silver at $15.83 an ounce.
NEWS SUMMARY: Precious metal prices retreated Monday on profit-taking and a stronger dollar. U.S. stocks fell into the start of the third quarter, as markets across the globe pulled back on rising trade tensions.
Key Events This Week: All Eyes On Friday -Zero Hedge
"It may be a holiday-shortened week in the US, but there is still a lot of market-moving data over the next 5 days with payrolls report and FOMC minutes to look forward as well as a number of manufacturing sector reports around the world....All traders will be on deck for Friday, July 6th when not only get June payrolls, but growing trade wars culminate as the US is set to launch 25% tariffs on $34 billion of Chinese imports, provoking instant retaliation. According to DB's Craig Nicol, politics could be the biggest test for markets next week starting with Germany this weekend....Meanwhile there are several critical trade-related dates next week. Sunday marked the deadline for the US Treasury Department to release its report outlining investment restrictions on Chinese investments in certain US industries. Sunday was also the day that Canada's retaliatory tariffs on US steel and aluminum kicked in."
In celebration of the Fourth of July holiday, we will be featuring four American patriots this week on our blog and in our emails.
Celebrating America's Founders: George Washington -History.com
George Washington (1732-99) was commander in chief of the Continental Army during the American Revolutionary War (1775-83) and served two terms as the first U.S. president, from 1789 to 1797. The son of a prosperous planter, Washington was raised in colonial Virginia. As a young man, he worked as a surveyor then fought in the French and Indian War (1754-63). During the American Revolution, he led the colonial forces to victory over the British and became a national hero. In 1787, he was elected president of the convention that wrote the U.S. Constitution. Two years later, Washington became America’s first president. Realizing that the way he handled the job would impact how future presidents approached the position, he handed down a legacy of strength, integrity and national purpose. Less than three years after leaving office, he died at his Virginia plantation, Mount Vernon, at age 67.
Did you know? At the time of his death in 1799, George Washington owned some 300 slaves. However, before his passing, he had become opposed to slavery, and in his will he ordered that his slaves to be freed after his wife's death.
Famous Washington quotes -Brainy Quotes
"My first wish is to see this plague of mankind, war, banished from the earth."
"Let us raise a standard to which the wise and honest can repair; the rest is in the hands of God."
"Happiness and moral duty are inseparably connected."
The Next Bear Stock Market Will Spark Retirement Crisis -Marketwatch
"Almost lost amid the torrent of recent news was a sobering item that will surely have far-reaching consequences. The U.S. government announced that for the first time since 1982, it is tapping into Social Security trust funds to pay current benefits to recipients and it is dipping into Medicare’s reserves to cover the costs of that program. The trustees also projected that the trust fund will run out of money by 2034 and that Medicare's fund for paying costly hospital bills will be depleted by 2026. That may ultimately force a cowardly Congress to cut benefits, raise taxes, increase the eligibility age, or some combination of the three. For the 52% of Americans who rely on Social Security for more than half their retirement income and the 25% of retirees who get more than 90% of their income from the program, that would be a disaster. But the 10,000 baby boomers who will turn 65 every single day from now until 2029 face an even broader retirement crisis that could cause big social and political fallout. Over the next few years, we will almost surely confront a bear market and recession that could decimate even substantial retirement portfolios, not to mention financially dicey state and local pension plans and the federal government itself."
6.29.18 - Housing Unaffordability Nears Peak
Gold last traded at $1,252 an ounce. Silver at $15.97 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a sharply weaker dollar. U.S. stocks were boosted by gains in banks and Nike, but ended with weekly losses amid anxiety over global trade frictions.
A minimum-wage worker in Venezuela could afford 5 cups of coffee each month - and nothing else -The Week
"Thanks to stunning inflation, it now takes 1 million bolivars to buy a cup of coffee in a Venezuelan cafe, Bloomberg reports. That's one-fifth of Venezuela's monthly minimum wage, and a 10,000-bill stack of Venezuela's most common bank note, the 100-bolivar bill. To illustrate Venezuela's rampant inflation, Bloomberg has tracked the price of a cup of coffee since December 2016 on its Cafe Con Leche index. One dose of caffeine cost 450 bolivars when the index launched two years ago, but 43,378 percent inflation in the last year has led to today's astronomical price. Additionally, if the pace of inflation over the past three months continues, Bloomberg estimates that inflation would be 482,153 percent after a year."
U.S. Housing Unaffordability Remains Near All-Time Peak -Political Calculations
"In February 2018, the ratio of the trailing twelve month averages of median new home sale prices in the United States to median household income reached an all time high value of 5.45, which is to say that the typical new home sold in the U.S. cost nearly 5 and a half times the annual income earned by a typical American household. Since then, preliminary sales data indicates that the prices being paid for new homes have slightly declined in recent months, while median household income has inched upward, where as of May 2018, the median new home costs 5.41 times the median U.S. household income. Looking at the data a little differently, we find that the growth of new home sale prices is indeed decelerating as incomes continue to grow."
It's no secret housing prices are approaching bubble levels again. Recently Craig R. Smith compared the price of gold with the Dow so far in the 21st century, which clearly show gold prices have risen more than threefold compared to the Dow. The chart above compares U.S. average income, new home prices, new car prices and gold prices between 1954 and 2018 (64 years). Notice it took 628 ounces of gold to buy a new home in 1954, but today it only takes 248 ounces of gold to buy a new home. Gold outpaced housing price inflation by over 250% - making gold a better store of value than both real estate AND the Dow stocks over the long-term!
U.S. Inflation Hits Six-Year High in May -Wall Street Journal
"U.S. inflation posted its highest annual growth rate in six years last month as lower unemployment and faster output of goods and services reduce slack in the economy. The personal-consumption expenditures price index, a broad measure that serves as the Federal Reserve’s preferred inflation yardstick, rose 2.3% in May from a year earlier, its biggest annual rise since March 2012, the Commerce Department said Friday. The year-over-year increase in April was 2%....It was the first time since early 2017 that the overall index surpassed the Fed’s 2% target, underscoring most policy makers' belief that the chronically low inflation of recent years is a thing of the past and that higher interest rates will be needed to keep prices in check from rising too much....At their most recent meeting earlier this month, Fed officials moved their median estimate for the necessary number of interest-rate increases in 2018 to four from three."
Deep State Goes to Silicon Valley -Bonner/Bonner And Partners
"Everybody knows that the feds played an important role in the funding and development of the internet. Al Gore even claimed he 'invented' it. Less well known is how the Deep State's clandestine agencies provided early-stage financing for today's Big Tech companies…and how they enjoy a cozy and mutually profitable relationship, controlling the flow of ideas, information, and opinions to the public…and preparing for the next stage: directly controlling its money…and its behavior....In the private sector, win-win is the only way to go. Whether at home or at work, you get along and go along, one-to-one, face-to-face…You give…and you get...roughly in equal measure. You say please and thank you, hoping to stay on good terms with your customer, your boss, or your spouse...Trade happens spontaneously between individuals, not between governments....Until a few months ago, the U.S. was engaged in only three major fake wars: A war against terror, (a big boom for the military/industrial complex) fought on many fronts around the world. A war on drugs (a big boom for the prison/police/law enforcement cronies), which has been going on since 1971, when Nixon declared it. A war on poverty, since Lyndon Johnson launched one in 1965 (an almost perpetual boost to the social welfare/crony complex). And now comes a war on trade, too. Yes, it's 'us' versus 'them' again! And happy days for the swamp’s lobbyists, schemers, chiselers, negotiators, contractors, and schmoozers. The regulations multiply. The power of the state increases. The win-win deals decrease. The win-lose deals increase. And the private sector pays."
6.28.18 - Data breach exposes "Almost Every American Adult"
Gold last traded at $1,251 an ounce. Silver at $16.04 an ounce.
News Summary: Precious metal prices end lower on U.S. dollar momentum. U.S. stocks advance, but limited by ongoing uncertainty surrounding trading policy.
A new data breach may have exposed personal information of almost every American adult- Market Watch
"A little-known Florida company may have exposed the personal data of nearly every American adult, according to a new report. Wired reported Wednesday that Exactis, a Palm Coast, Fla.-based marketing and data-aggregation company, had exposed a database containing almost 2 terabytes of data, containing nearly 340 million individual records, on a public server. That included records of 230 million consumers and 110 million businesses. 'It seems like this is a database with pretty much every U.S. citizen in it,' security researcher Vinny Troia, who discovered the breach earlier this month, told Wired. 'I don’t know where the data is coming from, but it’s one of the most comprehensive collections I’ve ever seen,' he said...If confirmed, the data leak would be one of the largest in history, and far bigger than the Equifax data breach last year that exposed the personal information of about 148 million consumers."
US first-quarter growth slowed more than estimated, weighed down by the weakest consumer spending in nearly 5 years - CNBC
"The U.S. economy slowed more than previously estimated in the first quarter amid the weakest performance in consumer spending in nearly five years....Gross domestic product was increased at a 2.0 percent annual rate in the January-March period, the Commerce Department said on Thursday in its third estimate of first-quarter GDP, instead of the 2.2 percent pace it reported last month. The economy grew at a 2.9 percent rate in the fourth quarter. The downgrade to first-quarter growth reflected weaker consumer spending and a smaller inventory accumulation than the government had estimated last month.....The United States is engaged in tit-for-tat trade tariffs with its major trade partners, including China, Canada, Mexico and the European Union, which analysts fear could disrupt supply chains and undercut business investment and potentially wipe out the fiscal stimulus."
China Think Tank Warns of Potential ‘Financial Panic’ in Leaked Note- Bloomberg
"A leaked report from a Chinese government-backed think tank has warned of a potential “financial panic” in the world’s second-largest economy, a sign that some members of the nation’s policy elite are growing concerned as market turbulence and trade tensions increase. Bond defaults, liquidity shortages and the recent plunge in financial markets pose particular dangers at a time of rising U.S. interest rates and a trade spat with Washington, according to a study by the National Institution for Finance & Development that was seen by Bloomberg News and confirmed by a NIFD official. The think tank warned that leveraged purchases of shares have reached levels last seen in 2015 -- when a market crash erased $5 trillion of value. 'We think China is currently very likely to see a financial panic,' NIFD said in the study."
US Jobless claims rise more than expected - Fox Business
"The number of Americans seeking unemployment benefits was larger-than-expected last week, with 227,000 people filing for jobless benefits versus the 220,000 Thomson Reuters consensus estimate. Applications for jobless benefits were also higher than the prior week, when 218,000 people filed. The 4-week average jobless claims applicants rose to 220,000, up slightly from the 221,000 in the prior week. Continued claims fell to 1.705 million, from 1.726 million in the prior week, slighltly less than the 1.725 million consensus estimate. The U.S. uninsured employment rate was unchanged at 1.2%."
6.27.18 - A Bear Market Retirement Crisis
Gold last traded at $1,254 an ounce. Silver at $16.03 an ounce.
News Summary: Precious metal prices end lower on stronger U.S. dollar. U.S. stocks turned lower as a drop in technology stocks offset a rally in the energy sector.
Why Russia and Turkey Are Such Gold Bugs - Bloomberg
"Since December, 2017 Russia has cut its holdings of U.S. foreign debt by more than half. Instead, it’s been increasing the share of gold in its international reserves. That’s understandable behavior for a country that has to deal with an unpredictable U.S. sanctions policy, but it’s also part of a trend. Foreign governments and international organizations account for a decreasing share of outstanding U.S. debt, and some economies have in recent years aggressively upped the share of gold in their reserves instead....And yet the U.S. does have a few things to worry about when it comes to its dominance of other countries’ official international reserves. In relative terms, governments and central banks are less and less interested in the ballooning U.S. debt. U.S. debt, of course, is growing faster than global international reserves, and that partly explains the declining role of foreign countries in keeping the U.S. government solvent."
The next bear market in stocks will spark a retirement crisis- Market Watch
"Almost lost amid the torrent of recent news was a sobering item that will surely have far-reaching consequences. The U.S. government announced that for the first time since 1982, it is tapping into Social Security trust funds to pay current benefits to recipients and it is dipping into Medicare’s reserves to cover the costs of that program. The trustees also projected that the trust fund will run out of money by 2034 and that Medicare's fund for paying costly hospital bills will be depleted by 2026. That may ultimately force a cowardly Congress to cut benefits, raise taxes, increase the eligibility age, or some combination of the three. For the 52% of Americans who rely on Social Security for more than half their retirement income and the 25% of retirees who get more than 90% of their income from the program, that would be a disaster. But the 10,000 baby boomers who will turn 65 every single day from now until 2029 face an even broader retirement crisis that could cause big social and political fallout. Over the next few years, we will almost surely confront a bear market and recession that could decimate even substantial retirement portfolios, not to mention financially dicey state and local pension plans and the federal government itself. And those governments will have few tools to fight it."
Fed's Rosengren warns against running U.S. economy above capacity - Reuters
"The best way for the U.S. Federal Reserve to prolong the nation’s economic expansion is to pursue a monetary policy path where the economy does not run above capacity, Boston Fed President Eric Rosengren said on Wednesday....There is uncertainty within the Fed about how far and fast to further raise rates. Most policymakers back a policy of gradual rate hikes and the median forecast for the so-called neutral rate - the level that neither boosts nor contracts the economy - is 2.9 percent. That gives the Fed less room to maneuver than in the past in terms of cutting rates when another economic downturn occurs."
Hedge Fund Managers See Echo of Past Crashes in Markets- Bloomberg
"The ranks of hedge fund managers expecting impending market chaos are growing. Greg Coffey, the former star manager at Moore Capital Management who started trading at his own firm this year, is comparing the turmoil in May to the end of dotcom bubble in 2000. Horseman Capital Management’s Russell Clark, one of the most bearish hedge fund managers in Europe, invoked memories of the financial crisis of 2008 in a letter to clients. The two managers, among the best-known in Europe, join a growing chorus of investors predicting an end to the decade-old rally in asset prices, as central banks move to normalize policies and the rise of populism threatens trade across the globe. Billionaire George Soros in May warned of a looming financial crisis and an existential threat to the European Union....'The ghosts of 2000 are upon us,' Coffey wrote in a May investors letter for his Kirkoswald Capital Partners. 'Make no mistake, this is the current investment environment we are in, and will be through 2018.'"
6.26.18 - The Dow's newest member
Gold last traded at $1,259 an ounce. Silver at $16.26 an ounce.
News Summary: Precious metal prices end lower on stronger U.S. dollar. U.S. stocks fell sharply, with Dow down more than 300 points, as new tariff threats rattled investors.
Now Even Swedes Are Questioning the Welfare State - Bloomberg
"Paying some of the world’s highest income-tax rates has been the cornerstone of Scandinavia’s social contract, with the political consensus in Sweden to save money for when the economy is less healthy. Yet the country is showing strains all too familiar in other parts of Europe with nationalists gaining support and Swedes increasingly questioning the sustainability of their fabled cradle-to-grave welfare system....There are also soaring crime rates, gang violence, complaints about education and pregnant mothers even being turned away from maternity wards due to a lack of capacity. The number of people waiting longer than 90 days for an operation or specialist treatment has tripled over the past four years."
Meet Walgreens: The Dow's newest member - CNN Money
"It's the end of an era. General Electric, as of Tuesday morning, is no longer in the Dow. There have been tons of funereal stories about GE getting kicked out of the Dow after 111 years. But there haven't been as many about the "new kid" in the Dow -- Walgreens Boots Alliance....With GE getting shown the Dow door, drug maker Pfizer, with a price just above $36 a share, inherits the title of the Dow member with the smallest weighting....The Dow includes banking giants JPMorgan Chase and Goldman Sachs in it, not to mention Pfizer competitors Merck and Johnson & Johnson. It includes Microsoft and Apple, too."
GE, a cornerstone of the Dow which prided itself on bringing "good ideas to light," has fallen into the bad idea of over-extended debt. As Craig Smith points out in his latest video, GE now brings the total to 12 Dow components which have been delisted since 2000 (that's 40%!).
Rising concerns over hackers using satellites to target US- The Hill
"The rapidly expanding number of satellites transmitting GPS locations, cellphone signals and other sensitive information is creating new opportunities for hackers. It's a risk exacerbated by the growing number of aging satellite systems in circulation. While it is cheaper to leave old satellites in orbit rather than pulling them from space, the outdated systems are even easier targets for hacking. Just last week, security researchers at Symantec warned that a China-based cyber espionage group known as Thrip targeted satellite, telecom and defense companies in the United States and Southeast Asia....Thrip used malware to infect computers linked to the satellites in an attempt to seize control of them — efforts that suggest the group’s motivations could extend beyond spying and include 'disruption,' according to Symantec."
Stock market inches up after trade-driven selloff; Dow still below key technical level - Market Watch
"U.S. stocks were slightly higher on Tuesday, with major indexes moving between slight gains and breakeven levels as investors digested the previous session’s sharp selloff, which was spurred by uncertainty over trade policy, a factor that remains unresolved...Investors remain worried that trade tensions between the U.S. and major trading partners such as China and the European Union could develop into a big drag on the global economy."
6.25.18 - Three Warning Signs Of A Bear Market
Gold last traded at $1,268 an ounce. Silver at $16.39 an ounce
News Summary: Precious metal prices ease back despite weaker U.S. dollar. U.S. stocks fell sharply, with Dow down more than 300 points, as new tariff threats rattled investors.
The machines warn of ‘significant’ downside risks facing the stock market- Market Watch
"Blue chips on Friday managed to avoid their longest losing streak since 1978, putting an end to eight-straight down days with a triple-digit pop...But the trade tensions won’t be going away anytime soon...There’s no shortage of worst-case scenarios to contemplate with regards to what happens to the global economy should the U.S. keep heading down this path. But what are the machines telling us? To find out, Barron's asked Wolfe Research's Tin Luo, former star quant at Deutsche Bank and longtime artificial-intelligence evangelist. He doesn’t see robots replacing money managers anytime soon, but he’s a big believer in the edge that machine learning can give investors. And those machines are firing off 'trade war risk' signals...Couple political risks with rising interest rates and you probably don’t need a robot to tell you there are clouds hanging over this market"
‘Significant Risk Of Recession In 2020’; What Does This Mean For Gold?- Kitco
"Despite stronger economic growth in 2018, Capital Economics is warning investors of a looming slowdown, estimating a 1.3% GDP growth in 2020 and a reversal of Federal Reserve’s tightening cycle....What this means is that there is a 'significant risk of a recession' in 2020, the firm’s economists wrote...Short-term economic growth that the U.S. is seeing this year will encourage the Fed to raise rates at least four times over the next 12 months, Capital Economics added. But, rising interest rates will eventually start to hurt the economy, bringing about an economic slowdown and reversal of the Fed’s monetary policy tightening... Capital Economics is neutral on gold prices in the short-term, projecting for the yellow metal to end the year around $1,300 an ounce. But, economic slowdown and a risk of a looming recession, could boost gold prices towards $1,400 an ounce within just two years, the firm's commodities economist Simona Gambarini said earlier in June. 'We are more positive on the prospects for prices in 2019 and 2020 when a cyclical slowdown in the U.S. economy will force the Fed to end this tightening cycle sooner than it anticipates and to start cutting rates in 2020,' Gambarini said. 'Our end-2019 and end-2020 forecasts for prices are $1,350 and $1,400 per ounce, respectively.'"
The Week Ahead: Three Warning Signs Of A Bear Market -Forbes
"The Dow Industrials managed to close higher on Friday, avoiding the longest daily losing streak since 1978. Then, the Dow closed lower for eight days in a row, and a losing day on Friday would have been nine days in a row. Again, this kind of streak has not happened since February 1978....Even though the first tariffs are scheduled to take effect July 6, there is uncertainty over which tariffs will actually be enforced. Therefore, it is difficult to determine what impact they will have on the economy and the stock market. As the rhetoric continues between the U.S., China, Canada and the Eurozone markets, more economists are expressing their views on what these tariffs might mean...Some economists are concerned that the trade conflict could offset the economic benefit of the growing U.S. economy and the tax cuts. If the threatened tariffs on China are implemented, then economists like Moody’s Mark Zandi fear that 'the nine-year economic expansion would veer into recession.'"
Dow drops 400 points as Trump reportedly plans to curb Chinese investments in US tech - CNBC
"Stocks kicked off the week trading lower on Monday as the Trump administration is reportedly preparing to restrict investment in U.S. technology by Chinese companies....The Wall Street Journal reported Sunday that President Donald Trump plans to bar several Chinese companies from making investments in U.S. tech. The newspaper also reported that the administration wants to block additional technology exports to China. Both measures are expected to be announced by the end of the week....Increasing trade tensions between the U.S. and its key trade partners, including China, have kept Wall Street on edge. The major indexes finished last week lower after Trump asked the U.S. trade representative to target $200 billion worth of Chinese products for tariffs. Trump also raised the possibility of slapping a 20 percent charge on European cars."
6.22.18 - China Threatens To Go After Dow Index
Gold last traded at $1,270 an ounce. Silver at $16.45 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors tried to shake off jitters about escalating China trade war tensions.
Gold prices edge up as dollar retreats from 11-mth peak -Reuters
"Gold prices inched higher on Friday after hitting a six-month trough in the previous session, as the U.S. dollar pulled back from a 11-month peak on profit-booking....Gold has rebounded a little bit from the lower side due to the weakness in the dollar, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies....Meanwhile, the ongoing trade war between the world's two largest economies has now claimed another victim - Germany's auto sector."
China threatens to go after Dow index giants next in trade war -Fox Business
"Dow members Boeing, Apple and Nike may be targeted by the Chinese as the trade war with the U.S. rages on, according to The Global Times a state-controlled tabloid. China may need to adopt a 'hard-line approach' targeting U.S. firms listed on the Dow Jones Industrial Average, if President Donald Trump keeps up with his trade threat antics, the paper reported. 'China does not want a trade war, but if Chinese companies suffer great losses due to Trump's protectionist trade policies, China will have no choice but to fight back in a bid to safeguard the interests of Chinese investors,' The Global Times said on Thursday. The 30 companies that comprise the weighted Dow Jones Industrial Average are among the world's biggest and storied companies and may be some of the first to bear the brunt of China's countermeasures,' the outlet added....'China is in full combat mode and prepared to strongly respond to any probable threat or economic assault from Trump,' the Global Times reiterated in its report."
Supreme Court Opens The Door To Internet Taxes - What Comes Next Could Be A Lot Worse -Investors
"Whatever you think about the issue of taxing internet sales, the simple fact is that the Supreme Court has just guaranteed that people across the country will now be paying more in state taxes. It's hard for us to see how this is good news. In its 5-4 decision on South Dakota v. Wayfair, the court overturned two previous rulings that prevented states from taxing sales of out-of-state companies. That meant a catalog company based in Maine didn't have to navigate 45 state sales-tax laws to figure out how much each customer owed, and then remit that money to the right states. Brick-and-mortar stores have been trying to lift this ban for decades, because, they say, it unfairly tilts the playing field in favor of catalog and online retailers. According to the Government Accountability Office, this break cost states up to $13.4 billion in lost revenue last year alone. And, retailers say it cost jobs and hurt local economies. Not surprisingly, Amazon.com, Shopify, Etsy, Wayfair and other e-commerce stocks dropped on Thursday....Whatever the merits of the decision, the Court's ruling means not only higher taxes for consumers, but higher prices."
EU retaliatory tariffs on raft of US goods go into force -ABC News/Associated Press
"The European Union started enforcing tariffs Friday on American imports like bourbon, peanut butter and orange juice, part of a growing global trade rift that's likely to intensify over the next few weeks. The EU tariffs on $3.4 billion worth of U.S. products are in retaliation for duties the Trump administration has imposed on European steel and aluminum. The EU trade commissioner has acknowledged that the EU targeted some iconic American items to put political pressure on U.S. President Donald Trump and senior U.S. politicians. European Commission spokesman Alexander Winterstein said the EU's response is proportionate and reasonable....Trump imposed tariffs of 25 percent on EU steel and 10 percent on aluminum on June 1. Europeans claim that breaks global trade rules. The spat is part of a wider tussle over global trade. In two weeks, the United States will start taxing $34 billion in Chinese goods."
6.21.18 - Supreme Court Rules States Can Tax Web
Gold last traded at $1,270 an ounce. Silver at $16.32 an ounce.
NEWS SUMMARY: Precious metal prices inched higher Thursday on bargain-hunting despite a firm dollar. U.S. stocks fell for an 8th day on trade war worry as internet tax dragged tech stocks down.
Gold prices inch up, but firm dollar limits gains -Reuters
"Gold prices edged up on Thursday, but hovered close to a six-month low touched in the previous session as a firm U.S. dollar curbed gains....The dollar index, which measures the greenback against a basket of six major currencies, stood at 95.102 after rising to 95.299 overnight, its highest since mid-July 2017....A developing trade war between the world's biggest economies is weighing on business confidence and could force central banks to downgrade their outlook, the world's most powerful policymakers argued on Wednesday. It is too early to assess the monetary policy impact of an escalation in trade tariffs between the United States and its partners but there is no reason for optimism, the head of the European Central Bank said on Wednesday....The European Union will begin charging import duties of 25 percent on a range of U.S. products on Friday, in response to U.S tariffs imposed on EU steel and aluminum early this month, the European Commission said on Wednesday."
Supreme Court rules states can force online shoppers to pay sales tax -CNBC
"States have broad authority to force online retailers to collect potentially billions of dollars worth of sales taxes, the U.S. Supreme Court ruled on Thursday, siding with South Dakota in its high-profile fight with e-commerce companies. The justices, in a 5-4 ruling against Wayfair, Overstock.com and Newegg, overturned a 1992 Supreme Court precedent that had barred states from requiring businesses with no 'physical presence' in that state, like out-of-state online retailers, to collect sales taxes."
"The ruling is likely to lead other states to try to collect sales tax on purchases from out-of-state online businesses more aggressively. It also likely will lead to many consumers paying more at the online checkout....Most states would need to pass legislation before seeking to collect the additional taxes, although some have already enacted laws or regulations similar to South Dakota's. The ruling opens the door to a new revenue stream to fill state coffers - up to $13 billion annually, according to a federal report - while imperiling a competitive advantage that e-commerce companies had over brick-and-mortar rivals that already must collect sales tax."
The Meaninglessness of the Stock Market Index in a Digital World -The Atlantic
"General Electric, which has been a component of the Dow Jones Industrial Average since Teddy Roosevelt was president in 1907, will be pulled out of the basket of 30 stocks next week. It'll be replaced by... Walgreens. Why'd GE get bounced? While it still generates a tremendous amount of revenue - $120 billion in 2017 - its margins have fallen, and it swung into the red in each of the past two quarters. As a result, GE's shares have fallen roughly 60 percent, from highs close to $32 per share at the end of 2016 down to today's close at $12.88. Its shares performed the worst of any in the Dow last year. The index is supposed to represent the country's 30 biggest, best companies out of the more than 3,500 publicly listed corporations....There is a nostalgic comfort in thinking that the same single number, composed of a potpourri of well-known companies nominally headquartered in this country, represent the American role in the massively complex, globalized economy. However: The index probably can't include the really high-priced stocks like Google and Amazon. Back in 2012, Adam Davidson argued that the index isn't even a good measure of the companies that it contains, because the price of an individual share of a company is not the best measure of its value to investors....'The stock market might actually be our worst option. Rather than being a useful indicator, it's an anxiety-amplification device. It reflects investors' own reactions, and often hysterical overreactions, as they progress through the turmoil,' Davidson wrote."
A Modest Proposal for Making America, and the World, Great Again -Benko/American Spectator
"Time to think Big by thinking Small. Hello, Tim Draper. Break California up into three States? High time! What might be the larger implications of tugging on a loose thread of the sweater that is the Megastates that dominate the world?....Let us place Draper's scheme to divide California in three into the Grand Scheme of Things: the decline and fall of the Megastate....Yes, back in the Days of Yore the 13 colonies and their successor states - and their first attempted union - were weak. Small, and vulnerable, America was at risk of being a plaything of foreign Emperors....President William Jefferson Clinton famously said in his 1996 State of the Union address, 'the era of big government is over.' This was prophetic. And yet...The conservative movement has long been thwarted in its noble efforts to seriously downsize the federal government. Why? I contend that this failure was because conservatives failed to think Big - meaning Small - enough....Make America (and the world) Great Again by restoring nations to loose but loyal confederations of small states. Let's think small so that the natural power of affection for our families and our neighbors will work as a force to keep our governments good."
6.19.18 - Gold: The Best Kept Secret on Wall Street
Gold last traded at $1,278 an ounce. Silver at $16.33 an ounce.
NEWS SUMMARY: Precious metal prices remained steady despite trade war fears and a stronger dollar. U.S. and global stocks fell sharply as new U.S.-China tariffs rattled investors.
Dow tumbles 300 points, wiping out gain for year -CNBC
"Stocks fell sharply on Tuesday after President Donald Trump's latest threat to China increased fears of an impending trade war between the world's largest economies. The Dow Jones industrial average fell 306 points, with Boeing, DowDuPont and Caterpillar as the worst-performing stocks in the index. The 30-stock index also erased all of its gains for the year....Trump asked the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs, at a rate of 10 percent. If China 'refuses to change its practices' and insists on continuing with the new tariffs it recently declared, then the additional levies would be imposed on Beijing, Trump said Monday night. Soon after, the Chinese Commerce Ministry issued a response, stating that the latest threat of more tariffs violates previous negotiations and consensus reached between both the U.S. and China. 'The United States has initiated a trade war that violates market laws and is not in accordance with current global development trends,' the ministry said."
Gold: The Best Kept Secret on Wall Street -Craig R. Smith
"Gold remains the natural, constant standard of real money that it was in year 2000, and that it was 2000 years ago....Since 2000, the Dow 30 has increased by 109%, from $11,722 to $25,517 – on average, about 6% per year...Gold, by comparison, since 2000 has increased 400% -- from $257 to $1,300 today – an average of 22.2% per year….or about 3.7 times more than stocks....Advertisers try to sell us what sparkles and can be given a temporary shine, from stocks to mysterious digital currencies with no proven track record....All the natural gold ever mined or gathered as nuggets would fit into a cube only 66 feet on a side, or would fit into one Olympic-sized swimming pool. Gold’s scarcity, incorruptibility, and beauty explain why gold remains precious while things based on paper and politics, from stocks and bonds to government fiat money, have been valuable for a brief moment and then been 'delisted,' often suddenly, by history. With the steady, reliable glow of gold lighting your path, you never need worry that a company or its stock are being mismanaged, or that government or banks are manipulating values." Full story: Watch 5-minute Craig Smith video
Only A Stock Market Rout Can Avert A Trump Trade War -Investors
"The U.S. economy is cruising along so well right now that it might take a stock-market rout to avert a Trump trade war....Now that verbal bombs aimed at Europe, Canada, Mexico, China and others are being followed by live tariffs and retaliatory action, the prospect for talks have never looked so dim. The trade conflict seems likely to get worse before it gets better. Meanwhile, Republicans in Congress have largely ruled out trying to wrest control of trade policy back from the White House. The only thing that might stop a trade war in its tracks - before the costs escalate - would be a suddenly lousy stock market that begins to put Trump's economic record and GOP control of Congress in jeopardy....Ed Yardeni, chief investment strategist of Yardeni Research, wrote that his bullish stock-market outlook requires Trump's 'benevolent Dr. Jekyll persona' of tax-cutter and deregulator to triumph over his protectionist Mr. Hyde. 'If his tariffs trigger widespread retaliation and an outright global trade war, then earnings will take a dive,' Yardeni wrote. 'We continue to expect that it will all end peaceably. But it isn't heading in that direction right now.'"
Mergers Would Make AT&T, Comcast World’s Most Indebted Companies -Wall Street Journal
"A wave of expected big media mergers would transform AT&T Inc. and Comcast Corp. into the two most indebted companies in the world, a standing that carries uncharted risks for investors in the firms' bonds. AT&T has bought Time Warner Inc., and Comcast hopes to purchase most of 21st Century Fox Inc. The companies would carry a combined $350 billion of bonds and loans, according to data from Dealogic and Moody’s Investors Service. 'It's a very big number,' said Mike Collins, a bond fund manager at PGIM Fixed Income, which manages $329 billion of corporate debt investments. 'It has fixed-income investors a little nervous and rightfully so.'....Global corporate debt excluding financial institutions now stands at $11 trillion, and the median leverage for such companies rated investment grade has jumped 30% since the eve of the financial crisis in 2007, according to Moody’s research....'The risk is that everyone wants to get out of the debt at the same time,' Mr. Collins said. 'That's when it gets ugly.'"
6.18.18 - Five Reasons to Buy Gold Price Dips
Gold last traded at $1,280 an ounce. Silver at $16.44 an ounce.
NEWS SUMMARY: Precious metal prices steadied Monday on rising uncertainty and a flat dollar. U.S. stocks fell for a 5th day as a potential trade war between the U.S. and China left Wall Street rattled.
5 Reasons The Drop In Gold Prices Shouldn't Worry Investors -Forbes
"Gold prices took a hit at the end of last week, and it has some observers concerned. But the truth is it shouldn't be worrying. Here's why gold investors shouldn't worry. 1. A 2% move in a day isn't much....2. Gold prices mostly move down when the dollar gains strength....3. When gold prices do poorly, then other investments tend to do well....4. Gold is still useful to own during times of market stress....5. The fact that gold prices move up and down is one of its attractions for investors....All these points remain true despite Friday's pullback. If you own gold and are worried that prices may drop then think about why you purchased it in the first place. Most veteran investors say that they own it for one of the following three reasons: To help with portfolio diversification, or as a hedge against the declining value of paper money, or as insurance that you'll always be able to raise cash by selling some of the metal."
The greatest asset inflation bubble in 20 years, fund manager warns -CNBC
"Nobody wants to use the 'B' word, but a bubble is upon us, a growing number of market watchers are warning. And it could pop sooner than many expect, Centricus Asset Management Fund Manager Ralph Jainz said Monday, joining a long list of financial players casting doubt on the strength of the market's current bull run. 'Nobody wants to talk about this being a bubble. It's the greatest asset inflation bubble we have seen in 20 years,' Jainz said during an appearance on CNBC's 'Squawk Box Europe.'...'Dispersion levels have been rising, people have been selling the losers to buy the winners,' the fund manager said, describing stocks that were already expensive becoming more expensive - like those in tech - as buyers rush to those out-performers and in turn sell the underperformers....Tech stocks have become so expensive, according to some investors, that many believe they no longer have room to grow."
The ominous new politics of trade - Ponte/WND
"Last Friday, markets were shaken by President Donald Trump's levy of $50 billion in tariffs via a 25 percent duty on 1,102 Chinese products involving industries such as aerospace, communications and information technology, and robotics....Mr. Trump's 'necessary' actions, says CPA Chairman Dan DiMicco, were 'to hold China accountable for its hostile actions and to ensure the future viability of key U.S. high-tech sectors.' 'China steals American technology by any possible means, then sells it back to the U.S. at a profit,' says CPA CEO Michael Stumo. 'In doing so, Beijing is not only directing the erosion of America's competitiveness in high-tech industries, but ensuring that domestic U.S. companies go out of business at the same time.'....Nations are starting to use targeted tariffs and other trade manipulations, wrote journalist Monica Showalter, 'to change our politics and force us [to] vote differently.' If you thought 'Russian collusion' was manipulating American politics, then what does it mean when foreign nations target their trade policies to harm one political party and thereby help elect its rival party? How long before one political party colludes with foreign powers to politicize trade?" Full story
Russia cuts Treasury holdings in half as foreigners start losing appetite for US debt -CNBC
"Foreign governments pulled back their purchases of longer-term U.S. debt as trade tensions escalated around the world....'We need all the help we can get in the search for buyers of US Treasuries due to the enormous supply coming our way in the next few years,' Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. 'Our stance on trade with our trading partners could very well play into this in coming months and quarters, especially with China, the largest owner of US Treasuries.' President Donald Trump's administration has been in a tit-for-tat battle of tariff threats with multiple U.S. trading partners, particularly China....One of the most glaring declines has come from Russia, which sliced its holdings of U.S. debt nearly in half from March to April, from $96.1 billion to $48.7 billion....With the budget deficit expected to rise in coming years - passing $1 trillion in 2020, according to Congressional Budget Office estimates - the government has been issuing debt heavily."
Goldman Co-Head Of Trading: I Am Worried The Market May "Break" And Not Snap Back -Zero Hedge
"Several weeks ago, Goldman's Chief Markets Economist Charlie Himmelberg became the latest Wall Street strategist to admit the threat to the market posed by High-Frequency Trading (HFT). The Goldman strategist warned that HFTs - due to their inability to process nuanced fundamental information - may trigger surprisingly large drops in liquidity that exacerbate price declines, and result in flash crashes....There will come a day 'with actual bad news' when the selling onslaught is so broad, not even BTFD HFTs will be able to resist the sudden avalanche of selling. That's the day when the increasingly fragile market, one in which 'liquidity is the new leverage' will officially break and stocks will 'trade outside of the NBBO constituting a genuine flash crash' in a 'negative feedback loop that causes more volatility.' A selloff from which there will be no 'snap back.'....And, more ominously, as of this moment - for the first time in the past decade - central banks, that ultimate backstop of every market crash, are once again draining liquidity...which, as we and Deutsche Bank explained previously, together with central bank tightening has been the catalyst for every major 'market event', whether economic recession or market crash or both in the post-Fed era."
6.15.18 - Could Bitcoin Crash Hit Stocks?
Gold last traded at $1,287 an ounce. Silver at $16.76 an ounce.
NEWS SUMMARY: Precious metal prices fell Friday on short-term profit taking and trade war fears. U.S. stocks fell after the Trump administration said it will impose a 25 percent charge on up to $50 billion in Chinese goods.
As trade war with China looms, U.S. readies second wave of duties -Reuters
"The United States has nearly completed a second list of tariffs on $100 billion in Chinese goods, as President Donald Trump prepares to enact an initial round of duties that is expected to trigger an in-kind response from Beijing, several sources said. The second wave of products has been cued up as Washington prepares to announce on Friday a list of about $50 billion of goods to be targeted. They are part of Trump's decision to go forward with 'pretty significant' tariffs, an administration official said on Thursday. The $100 billion list will be subject to the same public comment and hearing process as the $50 billion list, so it could take 60 days or more to put into effect, three sources familiar with the Trump administration’s thinking on tariff plans told Reuters. The list is intended to minimize the impact on U.S. consumers and businesses by selecting goods where there are ample alternative supplies from other countries. Eliminating any impact may be impossible."
Did You Know That Gold Outshines Stocks? -Craig R. Smith
"If the stock market is a great investment, why do Madison Avenue executives get paid tens of billions of dollars each year to promote it? Gold puts real, reliable value in your hands, and gold companies spend comparatively little on advertising. I looked into both. Since 2000, the Dow 30 has increased by 109%, from $11,722 to $25,517 - on average, about 6% per year. But is this a giant shell game? The Dow during those years changed, delisting 11 of its 30 benchmark companies and replacing 37% of them since 2000. They just keep replacing the numbers. Gold, by comparison, since 2000 has increased 400% - from $257 to $1,300 today - an average of 22.2% per year…or about 3.7 times more than stocks. And nothing has been 'delisted' from gold. It remains the natural, constant standard of real money that it was in year 2000, and that it was 2000 years ago....Gold's scarcity, incorruptibility, and beauty explain why gold remains precious while things based on paper and politics, from stocks and bonds to government fiat money, have been valuable for a brief moment and then been 'delisted,' often suddenly, by history." Full story: Watch 5-minute Craig Smith video
Is Mr. Trump's "madness" really leading to the Gold Standard? -Price/Plata
"Way back in 1995, when Mexico was in the throes of another financial crisis, I figured out the problem of the existing world's monetary system, based on the paper dollar as the fundamental currency of the world. The problem is really very simple: If the dollar - such as it is - is going to be the basis of the world's monetary system, and therefore required by all Central Banks as Reserves, there is only one way that these CBs can obtain those Reserves: their countries are forced to undersell all US producers, in order to be able to sell more to the US, than they buy from the US. The difference between the dollars they get from sales, is more, than the dollars they spend to buy from the US. That difference - known as the US Trade Deficit - flows to the CBs of the world and swells their Reserves. So if Mr. Trump wants to cut down, or even ideally abolish the Trade Deficit, that would mean that foreign CBs would have to find it much harder to obtain dollars for their Reserves....There is one way, and only one way, to do away with the Trade Deficit and renew the productivity of the US: abandon the present International Monetary System return to the gold standard. There are no 'Trade Deficits' under the Gold Standard, because all countries have to pay Cash Gold for their imports, and collect Cash Gold for their exports. Result: Balanced Trade. No Trade Deficits....Is Mr. Trump's 'madness' really leading to the Gold Standard? Is that what he really wants? Because if he continues to undermine the present US Dollar as the World's Reserve Currency, by making it impossible for CBs to obtain Dollars through the US Trade Deficit, that would appear to be the likely final outcome."
Bitcoin is crashing. Here’s what it could mean for stocks -CNBC
"Bitcoin is now nearly a third of its record high of nearly $20,000 reached last December. To investors worried bitcoin's bursting bubble could spill over into equities, one market watcher says the crisis is contained. 'There are things to be concerned about in terms of the stock market here with emerging markets and other issues, but I don't think bitcoin is going to be one of them,' Matt Maley, equity strategist at Miller Tabak, told CNBC's 'Trading Nation' on Wednesday....Bitcoin 'attracted a huge amount of speculative capital early and that capital is getting bled out,' Schlossberg said on Wednesday's 'Trading Nation.' 'You're going to see even a further divergence between the price of bitcoin and the price of stocks going forward. The $5,000 area is going to be the line between the diehards and the fair-weather fans in bitcoin. If the currency basically drops below that level I think you're going to see forced liquidation from all ends,' he said."
6.14.18 - Cashless Society Leading to Chaos?
Gold last traded at $1,308 an ounce. Silver at $17.26 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying despite a sharply higher dollar. U.S. stocks rose as media and tech stocks jumped on deal-making.
Two Banks See Post-FOMC Upside Potential For Gold Prices -Kitco
"Gold is poised to climb in the months ahead despite another U.S. interest-rate hike on Wednesday and prospects for further monetary tightening, said two banks in research notes Thursday. 'Following the seventh U.S. rate hike this cycle and with the promise of two more before year-end, I see the potential for the gold focus turning more supportive,' said Ole Hansen, head of commodity strategy with Saxo Bank. Suki Cooper, precious-metals analyst with Standard Chartered, was also upbeat on gold. She commented that the upgrade to inflation projections were modest, and Standard Chartered strategists noted the Fed is deep into a tightening cycle, with limited scope for U.S. rates to move higher relative to the euro zone. 'Gold price risks are skewed to the upside, in our view, despite the hawkish FOMC meeting yesterday,' Cooper said. 'FOMC meetings have marked the cycle lows for gold, as prices have softened in the weeks before the meeting, but have tended to recover thereafter,' Cooper said. 'We continue to expect gold prices to test five-year highs in Q4 2018.'"
Will a cashless society lead to chaos? -Independent
"Recent payment tech and bank problems show how our digital future could have consequences. Technology is great when it works, goes the adage. Yet the past few weeks have seen some stunning examples of how bad things can get when it doesn't. First there were the multiple problems at TSB, with some customers still claiming to have issues more than a month on from their disastrous IT switchover. The initial chaos left millions of customers unable to access online or mobile banking, while some were even mistakenly given access to other people's accounts....Then at the end of last week there was a Europe-wide Visa outage, leaving many customers unable to make card payments. Some of those cardholders found that their attempted transactions meant funds in their accounts were ringfenced, leaving them unable to even withdraw cash for use. Different issues, different outcomes but one unifying problem: the tech failed and left many people with no alternative. Many bank branches are closed; many people no longer routinely carry cash. When problems arose, people were stuck. It's possible to view this as a cautionary tale for our potential future as a cashless society. The more we rely on technological advancements, the more we will struggle when they fail."
To discover the latest developments in the ongoing 'war on cash', request a FREE copy of our 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction.
Can the Euro Be Saved? -Stiglitz/Project-Syndicate
"The euro may be approaching another crisis. Italy, the eurozone's third largest economy, has chosen what can at best be described as a Euroskeptic government. This should surprise no one. The backlash in Italy is another predictable (and predicted) episode in the long saga of a poorly designed currency arrangement, in which the dominant power, Germany, impedes the necessary reforms and insists on policies that exacerbate the inherent problems, using rhetoric seemingly intended to inflame passions. Italy has been performing poorly since the euro's launch. Its real (inflation-adjusted) GDP in 2016 was the same as it was in 2001. But the eurozone as a whole has not been doing well, either. From 2008 to 2016, its real GDP increased by just 3% in total....If one country does poorly, blame the country; if many countries are doing poorly, blame the system. And as I put it in my book The Euro: How a Common Currency Threatens the Future of Europe, the euro was a system almost designed to fail....Across the eurozone, political leaders are moving into a state of paralysis: citizens want to remain in the EU, but also want an end to austerity and the return of prosperity....Germany and other countries in northern Europe can save the euro by showing more humanity and more flexibility. But, having watched the first acts of this play so many times, I am not counting on them to change the plot."
Social Security & Medicare are slowly dying, but no one in Washington will lift a finger -USA Today
"During the 2012 presidential campaign, an infamous TV ad portrayed vice presidential candidate Paul Ryan murdering a grandmother...Being called a murderer was Ryan's reward for trying to keep Medicare solvent....Without any changes, the CBO projected that spending on those programs would grow to an unsustainable 12 1/4% of GDP by 2050....The Romney-Ryan defeat in 2012 killed the political viability of entitlement reform. Five years later, the CBO projected that without changes to stem runaway federal health care spending, major health care programs 'would account for 40% of federal noninterest spending in 2047, compared with 28% today.'....It's a similar story for the federal debt. In 2010, federal debt held by the public was 62% of GDP. At the end of 2017, it was 76.5% of GDP. This April, the CBO projected that it would reach 96.2% in 2028....We delayed dealing with these crises in the hope that they would fall to some future suckers. But we're the suckers. We believed the lies. All our delays bought us was a bigger crisis - one that's just a few years away."
6.13.18 - Food Stamps Hit 8-Year Low
Gold last traded at $1,303 an ounce. Silver at $17.11 an ounce.
NEWS SUMMARY: Precious metal prices were steady Wednesday on dollar weakness after the Fed lifted rates 0.25%. U.S. stocks traded lower following the Fed rate hike, despite upbeat tech news.
Gold steady as investors brace for expected Fed rate rise -Reuters
"Gold prices traded just below $1,300 an ounce on Wednesday ahead of a U.S. Federal Reserve policy announcement that could trigger a sharp move in prices. Investors expect the Fed to raise interest rates but want to know if it intends to tighten policy four times in 2018 or three times, as it indicated earlier this year....Gold prices have tended to fall before recent U.S. interest rate rises, as investors anticipate the change, but rally afterwards. 'It might be different this time,' said Robin Bhar, head of metals research at Societe Generale. 'Forward guidance will be crucial ... That will dictate direction in the short term.'....The dollar weakened slightly against a basket of major currencies, giving gold some support."
Fed Lifts Interest Rates: Good or Bad? -Fox Business
Is the Federal Reserve helping or hurting the economy by raising interest rates at least four times this year? Will the flattening interest rate yield curve signal a recession is coming; as it has in the past? Watch now to find out.
Trump's Creative Destruction of the International Order -Foreign Policy
"Apparently, according to multiple reports, U.S. President Donald Trump blew up the post-Cold War world order during brief, contentious meetings at the G-7 summit in Ottawa this weekend. His summit with North Korea, of course, promises more of the same, though at least in a manner that most support....Trump has indeed torpedoed decades of assiduous work to build a global economic and political alliance among the world’s largest economies. Even then, the result might not be as bad as one might think. First, there's nothing inherently objectionable about trying to alter a given international order. Such systems are fluid; they should not be fetishized or treated a permanent just because they have served purposes in the past....For the moment, we are in the realm of angry words, not structural changes. The minor tariffs on steel and aluminum, along with the retaliatory actions of Canada, Mexico, the EU, and China for the moment amount to a few billion dollars in a global trade system in the trillions....To be fair, something is changing. China is easing its way into its identity as an economic superpower, and another dozen or so of the world's most affluent nations, including the G-7 members, are less and less willing to take a back seat to the United States....Trump supporters cheer because so many are up in arms...Trump did what Trump does: he stirred the pot, poked the hornet's nest. As for the rest, the world is evolving in ways that have nothing to do with him, began before him, and will long outlast this particular tempest."
Food Stamp Enrollment Dips to Lowest Level in 8 Years -Breitbart
"Overall enrollment in the nation's food stamp program has dipped to its lowest level in eight years, according to the latest statistics released by the U.S. Department of Agriculture (USDA). The latest USDA data reveals that enrollment in the Supplemental Nutrition Assistance Program (SNAP) - the federal government program that administers food stamps - dropped to 40,083,954 in March 2018. The last time enrollment in the food stamp program reached that level was February 2010, when 39,588,993 people participated in the nation's food stamp program. Although overall enrollment has reached its lowest point in eight years, food stamp enrollment has been declining steadily since 2013 and has only continued throughout President Trump's first year in office. Under Trump, 2.2 million fewer people have discontinued their participation in SNAP, mainly due to the Trump administration's attempts to reform SNAP by controlling program costs at the federal and state levels."
6.12.18 - G7 Summit: Outlived Usefulness?
Gold last traded at $1,299 an ounce. Silver at $16.89 an ounce.
NEWS SUMMARY: Precious metal prices were steady Tuesday ahead of tomorrow's expected Fed rate hike. U.S. stocks traded flat as investors digested the potential outcome of the historic Trump-Kim summit.
Will the Fed Set Off a Recession Alarm? -Wall Street Journal
"The chairman of the Federal Reserve, just four months into his term, could be in the uncomfortable situation this week of signaling that a recession is coming. The Fed seems all but certain to raise its target range on overnight rates by a quarter point for the second time this year on Wednesday. There is a good chance it lifts its estimate for total rate increases for 2018 from three to four....The difference between three and four rate increases may not matter much to investors, who expect rates to keep rising next year. But it matters a lot for the yield curve, which is edging closer toward inverting, the situation in which short-term rates are higher than long-term rates. That is a longstanding signal that a recession is coming....The yield curve last was inverted in 2007, just before a recession. It also inverted in 2000. Federal Reserve Chairman Jerome Powell, when he holds his news conference on Wednesday, may be asked to explain why a recession won’t follow if the curve inverts again."
Trump's bluster may just pay off with North Korea -Marketwatch
"Let's not award any Nobel Peace Prize just yet, but as a longtime - and often harsh - Trump critic, I think he deserves credit for taking a new approach in dealing with one of the most dangerous problems on the planet: North Korea and its deadly arsenal of nuclear weapons. Since the Eisenhower administration, North Korea has been an enemy. Eleven presidents have worked to contain it, but that's not the same as actually eliminating the problem. And while there are no guarantees Trump will succeed where his many predecessors have failed, talking, in and of itself, isn't a bad thing. 'Let us never negotiate out of fear,' John F Kennedy said in 1961, 'but let us never fear to negotiate.'....Trump has played the buildup to the summit well, downplaying its prospects - 'We'll see what happens' - while focusing on the long-term potential of a more docile North Korean regime...So, what else can Trump do on the global stage with his unorthodox out-of-the-box bluster? Not much."
U.S. Inflation Accelerates to Six-Year High, Eroding Wages -Bloomberg
"U.S. inflation accelerated in May to the fastest pace in more than six years, reinforcing the Federal Reserve’s outlook for gradual interest-rate hikes while eroding wage gains that remain relatively tepid despite an 18-year low in unemployment. The consumer price index rose 0.2 percent from the previous month and 2.8 percent from a year earlier, matching estimates, a Labor Department report showed Tuesday. The annual gain was the biggest since February 2012 and follows a 2.5 percent increase in April. The pickup in headline inflation partly reflects gains in fuel prices, though the annual gain in the core measure - seen by officials as a better gauge of underlying inflation trends - was the most since February 2017....A separate Labor Department report on Tuesday illustrated how higher prices are pinching wallets: average hourly wages, adjusted for inflation, were unchanged in May from a year earlier."
President Trump Didn't Sign G7's Leftist Agenda - Smart Move -Investors
"President Trump created a quite a stir among the other Western leaders by refusing to sign the 'communique' that capped the G7 summit. But he was right to do so. This is once again being styled as the crude, unnuanced American president refusing to accommodate himself to the much wiser leaders of Europe. In fact, he wisely refrained from signing what was an empty, far-left political document, which is typical of the G7 'consensus' that American presidents have gone along with for decades....All told, the communique contains 27 points made in five major sections. All of them enlighten citizens around the world about how to think about everything, from gender and jobs to peace and climate change....The leadership of the nations allied with the U.S. come up short. They've ridden the anti-Trump wave of the so-called Progressives, rolling their eyes at his comments and acting as if he, not they, are the problem....Based on its recent performances, the G7 summit has outlived its usefulness. It has become an opportunity for troubled European leaders to preen and pose for cameras, speak progressive platitudes, engage in a little anti-Americanism, but do little if anything of substance."
6.11.18 - Social Security Crisis is Here
Gold last traded at $1,303 an ounce. Silver at $16.95 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on geopolitical uncertainty and a flat dollar. U.S. stocks inched higher following a turbulent G-7 meeting, ahead of key North Korea summit and Fed rate decision.
Gold Prices Edge Higher with Central Banks, U.S.-North Korea Summit in Focus -UK Investing
"Gold prices started the week higher in midmorning trade Monday while investors returned to their desks to digest the trade tension over the weekend at the G7 summit and looked ahead to the summit between the U.S. and North Korea as well as key policy decisions from the Federal Reserve and European Central Bank....In a session with no major U.S. economic reports, market participants were busy digesting the increased trade tensions that came out of the G7 summit over the weekend. U.S. President Donald Trump refused to endorse a G7 declaration calling for a reduction of tariffs, as he continued to lash out at traditionally close allies for allegedly treating the U.S. unfairly. Markets seemed unfazed by the outcome, with equities trading mostly higher on Monday, as attention turned to Singapore where Trump prepares for a historic summit with North Korean Leader Kim Jong Un to take place on Tuesday at 9:30AM local time....Meanwhile, markets were also prepping for a key week for central banks. The Fed’s two-day meeting will kick off on Tuesday with almost certain to raise interest rates by a quarter point for a second time this year at the conclusion of its two-day policy meeting at 2:00PM ET on Wednesday."
3 key foreign meetings, not just Singapore -Ponte/WND
"The June 12 meeting between President Donald Trump and North Korean Communist dictator Kim Jong-Un could be momentous, but so too could the seeds of two other June meetings. Days ago Kim fired several senior staffers, reducing his fear of a coup d'etat while he is away. If he does not move to eliminate his nuclear weapons, President Trump will likely respond by encouraging parity on the peninsula through South Korean nukes. Mr. Trump might also encourage Japan to flex its secret nukes and their accompanying space and weather rockets, which have long had the specs of ballistic missiles. Ever since the 'Three Arrows Affair' of the 1960s, it has been clear Japan would regard an attack on South Korea - whose city Busan/Pusan is only about 30 miles away from Nagasaki Prefecture's Tsushima Island, scarcely farther than the distance from Catalina Island to the California mainland - as an attack on the Japanese homeland....But while media's eyes turn to Asia, the Bilderberg gathering has been underway in Italy's Turin, shrouded in mystery....President Trump is fighting to defeat globalist Progressivism. In the G-7 and Bilderberg meetings, he faces private and public enemies of Great American nationalism. Keep your eye not only on Singapore, but on all three meetings." Full story
Sweden Tries to Halt Total Cashlessness -Bloomberg Quint
"A key committee of Swedish lawmakers wants to force the country's biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness. Parliament's Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts....The lawmakers said there needs to be 'reasonable access to those services in all of Sweden,' and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That's led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed....'We also want to see a proposal that all players must accept cash as well. It's a legal means of payment and should be accepted by all. It's like that in most countries, but not in Sweden.'"
Don't Wait For Social Security's Crisis - It's Here -Investors
"Entitlements: Social Security is like the classic children's tale, 'The Boy Who Cried Wolf.' So many warnings have been made, no one listens anymore. Well guess what? The wolf's now at the door. Are you listening now? For the first time in 36 years, Social Security will take money out of its 'trust fund' - an accounting fiction that would get you jailed for fraud in the private sector - to pay retirees. The truth is, Social Security is for all intents and purposes bankrupt. Since 2010, Social Security has been spending more than it took in, making up the difference by tapping into the interest paid on a $2.9 trillion government bond fund....By 2034, the entire pile of IOUs will disappear. Everything. It will require slashing benefits by at least 21%, or raising payroll taxes by 31%....So our financial Armageddon is coming earlier than expected. Putting an end to this latter-day Ponzi scheme won't be easy. It's time for all of us, politicians and citizens alike, to consider real, workable alternatives to fix the problem."
6.8.18 - Inflationary Tariffs May Supercharge Gold
Gold last traded at $1,302 an ounce. Silver at $16.74 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying and a flat dollar. U.S. stocks trades slightly higher as tensions between the U.S. and key trade partners rises as the G-7 summit kicked off.
At G-7 Summit, Trade Tensions Expected to Take Center Stage -Wall Street Journal
"Leaders from the Group of Seven industrialized countries gather in Quebec's Charlevoix region starting Friday for two days of meetings that is sure to include some blunt talk on trade - given the dissension in the ranks after U.S. tariffs on steel and aluminum products. Here are five things to keep an eye on over the next two days: TRADE TRUMPS ALL: Canadian Prime Minister Justin Trudeau wanted the summit in Charlevoix to focus on themes he has championed, such as gender equality, artificial intelligence and the environment....COMMUNIQUE BREAKDOWN: G-7 finance officials issued a rebuke of the U.S. in a closing statement of their meeting last week - a departure from tradition that G-7 and Group of 20 gatherings conclude with a communique in which all participants sign on....G-6 DYNAMIC: While attendees have been at odds with the U.S. over trade, the so-called G-6 may not necessarily present a united front at the summit....SOME SECURITY CONSENSUS: The G-7 won't be entirely at loggerheads. Officials are likely to rally around Mr. Trump and his pending summit with North Korean leader Kim Jong Un....TRUDEAU ON THE SPOT: According to University of Toronto's John Kirton, head of the school's G-7 research program, 'Trudeau seems to have replaced Merkel as public enemy No. 1 in Trump's mind' among the group of industrialized countries."
GO GOLD! Inflationary Tariffs Could Supercharge the Yellow Metal -Holmes/US Funds
"Ready for inflation? Just days after Treasury Secretary Steven Mnuchin reassured markets that a trade war between the U.S. and China was 'on hold,' the Trump administration announced that it would be moving forward with plans to impose 25 percent tariffs on as much as $50 billion worth of Chinese exports to the U.S. Beijing has already suggested that it will retaliate in kind. The White House also reinstated tariffs on imports of steel and aluminum from Canada, Mexico and the European Union (EU) after allowing earlier exemptions to expire. Again, there's a big chance the U.S. will see some sort of tit-for-tat response. Steel prices are already up 45 percent from a year ago....Next up, the U.S. government could slap steep tariffs on imported automobiles - and possibly even ban German luxury vehicles outright. These decisions, if fully implemented, will have a multitude of implications on the U.S. and world economies. What I can say with full confidence, though, is that prices will rise - for producers and consumers alike - which is good for gold but a headwind for continued economic growth....In the years when inflation was 3 percent or higher, annual gold returns were 15 percent on average, according to the World Gold Council (WGC)."
Ben Bernanke: The US Economy Is Going To Go Off The Cliff In 2020 -Zero Hedge
"While Ray Dalio's co-Chief Investment Officer listed several specific reasons for his unprecedented bearishness, noting that 'markets are already vulnerable as the Fed is pulling back liquidity and raising rates, making cash scarcer and more attractive'....The result was the hedge fund's now infamous conclusion: 'We are bearish on financial assets as the US economy progresses toward the late cycle, liquidity has been removed, and the markets are pricing in a continuation of recent conditions despite the changing backdrop.' Today, none other than former Fed Chair Ben Bernanke repeated the same assessment almost verbatim in explaining his own suddenly quite dire outlook on the economy....Speaking at the American Enterprise Institute, Bernanke echoed Bridgewater's biggest concern about the sugar high facing the US economy for the next 18 months....Stealing further from the Bridgewater note, Bernanke said that while the stimulus 'is going to hit the economy in a big way this year and next year and then in 2020 Wile E. Coyote is going to go off the cliff, and it's going to look down' just when the US economy collides head on with what Bridgewater called 'an unsustainable set of conditions.'"
Home flipping activity reaches six-year high -Marketwatch
"Home flippers in today's market face a conundrum: Demand for homes has perhaps never been greater, but high prices are making it harder to see a strong return on investment. Homes flipped during the first quarter represented 6.9% of all sales, up from 5.9% in the previous quarter, according to a report released Thursday by real-estate data company Attom Data Solutions. As a share of overall purchases flipped homes are at a six-year high, same as this time a year ago. A marked increase in home flipping was one of the signs of an overheating property market in the lead up to the Great Recession a decade ago....'The 2018 housing market is a double-edged sword for home flippers,' Daren Blomquist, senior vice president at ATTOM Data Solutions, said in the report. They earn more when they sell the properties, but high prices mean that 'flippers to pay more to acquire homes to flip.'....FHA loans are especially popular among first-time buyers. And the first-quarter figure represented the lowest share of FHA buyers in a decade - suggesting that recent house-flipping activity has not benefited first-time buyers."
Thinking About Retirement? Consider Working a Little Longer -New York Times
"Saving and investing for retirement are important. But at a certain stage for most people, another strategy is far more powerful: working a little longer. That is the message of an academic study stuffed with provocative nuggets...The study, 'The Power of Working Longer,' is eye opening. It acknowledges the validity of trimming investment costs, investing through workplace retirement plans and saving as long and as much as you can....As pensions vanish and the stock market gyrates, Social Security remains the most stable pillar in most people's retirement. Increasing annual Social Security income by working longer - optimally, until at least age 70 - will improve financial security more than anything else most people can safely accomplish....Do everything that you can to prepare, the paper says, but don't forget the power of working longer."
6.7.18 - "A Cashless Society Is Very, Very Dangerous"
Gold last traded at $1,303 an ounce. Silver at $16.81 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on trade uncertainty and a weaker dollar. U.S. stocks traded mixed as Facebook and other major tech names pushed the sector lower.
Texas just opened the nation's first state-run gold depository -Texas Tribune
"Texans can now store their precious metals in a publicly backed secure vault close to home, as the United States' first state-run gold depository opens for business in Austin. A 23,000-square-foot building - operated by the private storage company Lone Star Tangible Assets - will serve as Texas' precious metals depository until 2019, when Lone Star is scheduled to open a facility double that size in Leander. Texas Comptroller Glenn Hegar became the first person to take advantage of the fully insured Texas Bullion Depository when he deposited his own gold and silver in the Austin vault earlier this week, according to his office. 'By having state oversight, if you deposit your precious metals, you know that we’re constantly over there, making sure the security is top-notch,' Hegar said....The University of Texas Investment Management Company, which oversees the assets of the University of Texas and Texas A&M systems, holds $1 billion worth of gold bullion at the HSBC Bank in New York City, according to Karen Adler, a spokeswoman for the organization. When Abbott signed the gold depository bill into law in June 2015, he declared that the opening of a state-run facility would allow Texas to 'repatriate' the nonprofit's gold supply."
U.S. Jobs Outnumber Unemployed! -Fox Business
Swiss America Chairman Craig R. Smith discusses the latest upbeat employment news and explains how and why president Trump is successfully restoring confidence back to American citizens. Mr. Smith also weighs in on a possible 'Tax Cut 2.0' and what needs to be done to save Social Security from its potential demise. Watch video
FAANG Bubble Statistics -Econ Matters
"Everyone has piled into the same trade for long enough that we have an acronym for this herd mentality in FANG, then expanded to FAANG, and other derivatives to include hot stocks like Microsoft and Nvidia. The lack of imagination on behalf of investors, that they think these are still fairly priced stocks that represent good value in the market after everyone and their uncle has crowded into the same stupid trade is beyond stupidity. So is your strategy: Be the last in, and the last out of this trade - the the ultimate bagholder!....At this rate, we should just scrap the indexes, since the entire market is basically 10 stocks, and just label them Apple, Facebook and Amazon....In short when we look at some of the recent gains in these stocks after already being pushed up to ridiculous bubble levels for years, it is quite staggering just how many bagholders there are who are going to lose a lot of money on the downside in the unwinding/crash of this trade....Amazon could fall $350 in a flash crash day, Apple could gap down $50 easily with a miss at these nosebleed levels as investors all run for the exits at the same time."
Ron Paul: "A Cashless Society Is Very, Very Dangerous" -Zero Hedge
"As the global war on cash continues to accelerate, outspoken libertarian Ron Paul summarizes the effort to eliminate cash perfectly - as an 'attack on individual freedom.' Restricting and discouraging the use of cash, suggests Paul, has always been a goal of statists as a means to reduce individuals’ independence. 'A cashless society is very, very dangerous,' continues Paul....Consider just who is gaining from this war on cash. 'The banks, of course, are charging as many fees as they can think of. More importantly, your cash card leaves a wide data trail detailing your buying preferences, used by merchants and advertisers to entice you into more buying. How convenient. These thoughtful companies even offer reward points every time you use the card. Cash offers the ultimate in privacy. Your cash card might as well be a walking billboard. The government, of course, is extremely interested in your spending habits. The taxing authorities use an electronic money trail to monitor your spending and ensure against tax evasion. In addition, cards save the government the cost and trouble of printing and storing additional currency.'"
For the latest developments in the ongoing 'war on cash' request a FREE copy of our 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction. Discover the secrets behind the larger worldwide scheme to stop the private use of cash so that every single transaction can be controlled, tracked and taxed.
6.6.18 - State Collects $4M in Illegal Taxes
Gold last traded at $1,306 an ounce. Silver at $16.69 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks rose as bank shares rallied on higher interest rates, while Boeing climbed up.
Gold steady, weaker dollar provides support -Reuters
"Gold steadied on Wednesday, supported by a weaker dollar and trade tensions as the market looked ahead to an expected U.S. rate hike next week when the Federal Reserve meets....'Investors are sitting on the fence, they only want to be involved when we break out of the range,' said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen....The case for hiking U.S. interest rates next week was bolstered on Tuesday when data showed U.S. services sector activity accelerated in May and job openings rose to a record high in April....Once the rate decision has been taken, gold is likely to move higher, Hansen said. 'There is potential for gold to follow the same pattern it's taken after recent rate hikes: defensive before, only to rally afterwards.'"
Social Security Expected to Dip Into Its Reserves This Year -Wall Street Journal
"The Social Security program's costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits. This is three years sooner than expected a year ago, partly due to lower economic growth projections, according to the latest annual report the trustees of Social Security and Medicare released Tuesday....The trust fund will be depleted in 2034 and Social Security will no longer be able to pay its full scheduled benefits unless Congress takes action to shore up the program's finances. Without any changes, recipients then would receive only about three-quarters of their scheduled benefits from incoming tax revenues. The report also said that Medicare's hospital insurance fund would be depleted in 2026, three years earlier than anticipated in last year's report. Absent changes, the program then would be able to handle 91% of costs. The nation's aging population is boosting the costs of Social Security and Medicare, while revenue gains lag due to slower growth in the economy and the labor force. About 61.5 million people receive retirement or disability benefits from Social Security and 58.4 million receive Medicare....Congress has debated ways of bolstering the programs' finances, but hasn't agreed on what to do."
State collects $4 million in illegal taxes, won't give it back -WorldNetDaily
"Barack Obama's weaponization of the Internal Revenue Service, which admitted it targeted non-profits based on their conservative and Christian beliefs, only increased feelings of antipathy toward the federal agency. But there also are state tax agencies across the United States, and Pennsylvania's has given its citizens another reason to despise tax collectors. After all, they collected taxes that weren't due. Then they kept them. And even went to court to get an order saying they didn't have to be returned. The case now is before the U.S. Supreme Court, where Nextel Communications of the Mid-Atlantic is pointing out that 'the Supreme Court of Pennsylvania agreed with a taxpayer that a collection of state taxes violated a long-settled understanding of the state constitution.' Yet, it 'expressly refused to grant the taxpayer any relief,' in apparent violation of the U.S. Constitution's Due Process clause....The company says the state's failure to address due process alone merits review by the Supreme Court."
David Stockman: Stocks will plunge 50% in this 'daredevil market' -CNBC
"President Ronald Reagan's Office of Management and Budget director blames a bull market that's getting longer in the tooth - paired with headwinds ranging from President Donald Trump's leadership to fiscal policy decisions to questionable earnings. 'I call this a daredevil market. It's all risk and very little reward in the path ahead,' David Stockman said Tuesday on CNBC's 'Futures Now.' 'This market is just way, way over-priced for reality. The S&P 500 could easily drop to 1,600 because earnings could drop to $75 a share the next time we have a recession,' Stockman warned. 'We're about eight or nine years into this expansion. Everything is crazily priced. I mean the S&P 500 at 24 times at the end, tippy top of a business cycle.' One of his biggest gripes with the bulls is the notion that President Donald Trump's tax cuts are providing a fundamental lift to stocks. 'These tax cuts are going to add to the deficit in the 10th year of an expansion. It's just irresponsible crazy,' he said. 'It's all going to stock buybacks and M&A deals anyway. That doesn't cause the economy to grow. It's just a short-term boost to the stock market that doesn't last.'....'When the catalyst finally comes, it's hard to say,' Stockman said. 'No one can ever define what the black swan is because that is why it's called a black swan.'"
6.5.18 - Smart Money's Bailing Out of Markets
Gold last traded at $1,302 an ounce. Silver at $16.54 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying and a weaker dollar. U.S. stocks declined as worries about U.S. trade relations and tariffs on steel lingered.
Gold rebounds and approaches $1300 -FX Street
"Gold bounced to the upside, despite USD strength and climbed to $1,297/oz hitting a fresh daily high. The yellow metal rose from $1,290 supported by a decline in equity prices and yields. In Wall Street the DOW JONES failed to hold to gains and was down 0.31%. Despite upbeat data, US yields were modestly lower, favoring the upside in gold. After losing ground for three consecutive days, gold is up on Tuesday. It is approaching the $1,300 area where the 20-day moving average stands. A daily close above could signal more gains ahead for the metal."
Hallmark of an Economic Ponzi Scheme -Hussman/Hussman Funds
"Consider two economic systems. In one, consumers work for employers to produce products and services. The employees are paid wages and salaries, and business owners earn profits. They use much of that income to purchase the goods and services produced by the economy. They save the remainder. A certain portion of the output represents 'investment' goods, which are not consumed, and the portion of income not used for consumption - what we call 'saving' - is used to directly or indirectly purchase those investment goods....The second economic system is dysfunctional. Consumers work for employers to produce goods and services, but because of past labor market slack, weak bargaining power, and other factors, they are paid meaningfully less than they actually need to meet their consumption plans....Meanwhile, lopsided corporate profits generate a great deal of saving for individuals at high incomes, who use these savings to finance government and household deficits through loans....The first of these economic systems is self-sustaining: income from productive activity is used to purchase the output of that productive activity in a circular flow....The second of these economic systems is effectively a Ponzi scheme: the operation of the economy relies on the constant creation of low-grade debt in order to finance consumption and income shortfalls among some members of the economy, using the massive surpluses earned by other members of the economy....The hallmark of an economic Ponzi scheme is that the operation of the economy relies on the constant creation of low-grade debt in order to finance consumption and income shortfalls among some members of the economy, using the massive surpluses earned by other members of the economy. The debt burdens, speculation, and skewed valuations most responsible for today's lopsided prosperity are exactly the seeds from which the next crisis will spring."
The Smart Money's Bailing As Market Complacency Surges -Zero Hedge
"The turbulence throughout the markets last week - thanks to Italy - has given investors their first taste of a frothy summer. Especially the 'smart money'- they’re bolting for the exits...The Smart Money Flow Index (SMFI) is a leading-indicator in markets. That means when the SMFI drops sharply, usually the equity markets are right behind it. And we haven’t seen the SMFI drop this much since the Great Recession of 2008 and the 2001 Recession. Last week I wrote about the forgotten economist - Hyman Minsky - and his excellent work about the Financial Instability Hypothesis (FIH), which details how an economy shifts through three stages. From lowest risk to highest risk the stages are: hedged, speculative, and ponzi. But probably the most important takeaway from the FIH is this simple sentence...'The periods of low volatility and market calm are the seeds for high volatility and market chaos in the future; then back the other way around.'"
Will slow wage growth create another consumer debt crisis? -NBC News
"Although the labor market added a better-than-expected 223,000 jobs in May, robust wage growth again proved elusive with an increase of just 2.7 percent on an annualized rate. An accumulation of recent data indicates that some Americans are starting to struggle financially, suggesting that workers may have added debt to their household balance sheets because they expected to be earning more by now. Delinquencies have ticked up in retail credit cards, which typically have a lower bar for acceptance than general-purpose cards, and in car loans to people with subprime credit scores. The percentage of private-label retail credit card bills unpaid for 60 days or more is 4.65 percent, a seven-year high, according to credit bureau Equifax, and the amount of outstanding auto loan debt unpaid for 60 days or more has risen by more than 5 percent year on year. Consumers added $63 billion in debt in the first quarter of this year and owed a collective $13.21 trillion as of March 31, according to the Federal Reserve, and more of them appear to be having trouble servicing that debt: According to a separate Fed report, the number of people who have fallen behind on their credit card payments for 90 days or more has increased 'notably' from a year ago, and car loan payments overdue by 90 days or more have been on the rise for more than five years....The problem is that the recovery's economic gains haven’t been equally shared among Americans, said Mark Hamrick, senior economic analyst for Bankrate.com. Six months into a historic tax cut for businesses, workers aren't seeing the kinds of pay increases its political backers said would follow. A Morgan Stanley survey found that just 13 percent of this corporate windfall is going to worker pay, benefits or other compensation."
6.4.18 - Customs Seizes $58,000 Cash, Without Cause!
Gold last traded at $1,297 an ounce. Silver at $16.43 an ounce.
NEWS SUMMARY: Precious metal prices were steady Monday amid dollar weakness and lingering trade war concerns. U.S. stocks traded higher as Apple led the technology sector to a record high.
Gold May Hit $1,400 in '19 on 'Powerful Fuel' of Weak Dollar -Bloomberg
"Gold may have posted two straight months of declines, but is set to shrug off the blues and rise in 2019 as the dollar weakens. The precious metal will start to rebound in the final quarter of this year to average $1,375 an ounce in the last three months of next year and could touch a high of $1,400, said Bart Melek, global head of commodity strategy at TD Securities in Toronto. That's a level last seen in 2013....'As time moves on, there'll be less and less reasons to get into the U.S. dollar, which will likely reverse some of the flows,' said Melek, who's among speakers at a precious metals conference in Singapore this week. 'We do ultimately think that as we move into 2019, the U.S. dollar will weaken, which is a very powerful fuel for the gold complex.'....'Looking forward, the conditions for the gold market look more positive as the dollar rally becomes more stale and fiscal factors start to erode the dollar’s strength,' he said, also adding that the Fed's tightening cycle may be coming to an end next year."
A 64-year-old put his life savings in his carry-on. U.S. Customs took it without charging him with a crime. -Washington Post
"A 64-year-old Cleveland man is suing U.S. Customs and Border Protection after agents strip-searched him at an airport in October and took more than $58,000 in cash from him without charging him with any crime, according to a federal lawsuit filed this week in Ohio....Customs agents seized the money through a process known as civil asset forfeiture, a law enforcement technique that allows authorities to take cash and property from people who are never convicted or even charged with a crime. The practice is widespread at the federal level. In 2017, federal authorities seized more than $2 billion in assets from people, a net loss similar in size to annual losses from residential burglaries in the United States. Customs says it suspects that the petitioner in the case, Rustem Kazazi, was involved in smuggling, drug trafficking or money laundering. Kazazi denies those allegations and says that the agency is violating federal law by keeping his money without filing any formal complaint against him. Kazazi is a retired officer with the Albanian police who relocated with his family to the United States in 2005 after receiving visas through the State Department's lottery program. They became U.S. citizens in 2010. After several years away, Kazazi planned a trip to Albania last fall to visit relatives, make repairs on a family property and potentially purchase a vacation home."
News stories like this (both above and below) will come as no surprise to our regular readers. Starting in 2014 in our book, Don't Bank On It!, we have been exposing similar stories of civil asset forfeiture abuse. Our newest 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction, explains how they fit into a larger worldwide scheme to stop the private use of cash so every transaction can be controlled, tracked and taxed.
Australia Bans Cash For All Purchases Over $7,500 Starting July of 2019 -MSN
"Australia's Liberal Party government has announced that it will soon be illegal to purchase anything over $10,000 AU ($7,500 USD.) The government said it's, 'encouraging the transition to digital society,' and cracking down on tax evasion. The ban starts on July 1, 2019 and any payment over $10,000 will have to be made by check or credit/debit card. The goal is to drum up about $3 billion in new tax revenue over the next four years. One of the biggest targets will be the illicit tobacco trade."
Media Giants Are Becoming Leftist Tax Targets -Pontification Blog
"'The Revolution devours its children,' wrote journalist Jacques Mallet du Pan, who lived during the French Revolution. Its terror began by beheading the king and queen, then those accused of plotting against the Revolutionary leader Maximilien Robespierre, and near its end the mobilized mob hysteria guillotined Robespierre himself. In the fanatic hate of today’s 'Resistance' mobilized against President Donald Trump, which has included simulated beheadings, that same 'fearful symmetry' is now emerging. Veteran Democratic politicians know it is time to move to the political center and offer realistic compromise solutions, but their core voters were mobilized by hatred against Trump and will accept no compromises. The Democratic Party's own hate-filled demagoguery has made rational democracy impossible. The Democrats' comrades in the new media want leftist candidates to win, but, with delicious irony, starting on the local level such politicians now seem bent on devouring these rich media giants. Google and its company YouTube gave massive help to Barack Obama's reelection in 2012 and to Hillary Clinton's failed campaign in 2016. It has relentlessly biased its media information to the left, most recently this May by identifying the 'ideology' of the California Republican Party as 'Nazism.'....Such leftist media giants ignore our cries for fairness and balance as they push global socialist Revolution and try to behead elected conservatives. But now greedy leftist politicians are turning against them to feed the angry mob of welfare recipients who demand more free goodies."
6.1.18 - How Gold Has Outperformed Stocks
Gold last traded at $1,293 an ounce. Silver at $16.41 an ounce.
NEWS SUMMARY: Precious metal prices eased back Friday as upbeat job data boosted the dollar. U.S. stocks rose as a stronger-than-expected employment report showed an increase of 223,000 jobs in May.
Where The Jobs Were In May: Who's Hiring And Who Isn't -Zero Hedge
"After years of monthly payroll reports padded with excessive minimum wage waiter, bartender, educator or retail worker jobs, today's May jobs report was not only impressive in its top-line beat and which was the record 92nd straight month of US job growth, coupled with the strong wage growth, which at 2.7% came in higher than expectations, not to mention the record surge in full-time jobs, it also showed surprising strength in most components even if some negative surprises were also present....In May we saw a continuation of many of the trends observed last month: Continued strength in Goods Production: Mining (+5.5K), Construction (+25K) & Manufacturing (+18K). Trade & Transportation Rebounded: Wholesale (+4.2 after a big drop last month), Retail (+31.1K), and Truck Transportation (+6.6K). Here the surprise was that just 6.6K trucking jobs were added, following complaints from the major trucking employers, all of whom have noted they can't find enough people to hire, which suggests there may be an upward revision next month."
How Gold Has Outperformed Stocks In The Last Few Decades -WallStreet.com
"Gold has been considered a safe investment for years. For that reason people have been buying gold for decades; it's considered one of the best storehouses of value. When the 'investment craze' hit the market, stocks were most investors' first preferred option. This has more to do with the fact that the stock market back then was something new and investors were interested in knowing more about its capabilities. However, over the years they realized gold is a better and safer investment option with higher potential. Physical gold and stocks have been pitched against each other for decades, and there seems to be a connection between the two. However, the trend keeps on changing and largely depends on the time period we are considering. For example, if we look at the past 45 years, we'll see that the yellow metal has outperformed stocks and even bonds; however, the past 30 years show that stocks did better than gold. But, looking at the numbers from past 15 years it can be safely concluded that gold has outperformed both stocks and bonds....Gold has increased +669% in the last 40 years (gross), doing better than inflation (328%), cash (535%), and housing (598%). Gold has consistently ranked in the top 3 best assets since 2000."
NOTE: Most investors today are convinced by Madison Avenue ads that stocks are a better place to have their money than physical gold. However, over the long-term, this has not always been true. The Yahoo chart below compares the DJIA with Gold between 1/10/2005 and 6/1/2018. Gold prices are up 278% vs. DJIA at 225%. This means that over the last 13 1/2 years gold owners would have beat Dow stock holders by 23% - without the stress of market volatility.
Italy's Establishment Runs Out of Tricks -Weekly Standard
"A political establishment of long standing always suffers from a kind of mental illness. No matter how unambiguously it is repudiated or how joyously it is driven from office, its members will continue to remember the episode as accidental, temporary, and unjust. This week in Italy such arrogance nearly provoked a financial panic and an international crisis. In elections in March, two parties relatively new to the national scene had blown away all their establishment rivals and taken a majority of the seats in the national assembly. Because one of them, the League, was a nationalist party of the sort associated with France's Marine Le Pen, while the other, the Five Star Movement (M5S), was founded by a madcap comedian, observers snickered at how entertaining it would be to watch these two collections of losers try to cobble together a coalition. They wound up doing fine, though, because they have one big thing in common. They both hate the multinational European Union, which has hamstrung most of the continent's economies and stripped its member states of much of their sovereignty....On Monday, May 28, there was the beginning of a run on Italy's bonds. The market was more nervous about the 'responsible' Cottarelli than it had been about the 'irresponsible' Salvini and Di Maio. The reason is not far to seek. Once Salvini and Di Maio's majority had been denied the right to form a government on the grounds that one of its ministers was a europhobe, the impending election appeared to be a referendum on the common European currency. It would be like Brexit: Exitaly was the snappy portmanteau making the rounds....The problem is not that parties have been getting more obstreperous but that Europe is getting harder to govern."
How the Government Became a Deep State Puppet -Bonner/Bonner And Partners
"The difference between the next crash and the last two is that this time, the feds have less room to maneuver. At the end of an expansion cycle, like the one America has had for almost ten years, the federal government should be running a surplus....Meanwhile, over at the Fed, another knuckleheaded experiment is going on. It has left real rates (adjusted for inflation) below zero for nearly a decade, even though a recovery, such as it was, began in 2009. This, too, is unprecedented… and almost surely disastrous....In a small government, citizens can run the show. They know what is going on, and have a say in what happens next. In a global Deep State Empire, on the other hand, citizens play largely symbolic roles. They vote, but their votes don't really matter. They voice their opinions, but no one really cares what they think....The federal government is going broke. The welfare state can't be cut back (too many retiring voters). The warfare state won't be cut back (too many powerful cronies). Together, they will bankrupt the nation. But in Congress, the subject never even comes up....The elite insiders - in business, government, academia, religion, and media… left and right… whether it is the centralized government of Louis XVI or the post-World War I USA… Republican or Democrat - become parasites."