6.11.19 - Put Your Trust in Gold -Forbes
Gold last traded at $1,331 an ounce. Silver at $14.74 an ounce.
NEWS SUMMARY: Precious metal prices steadied Tuesday on bargain-hunting and a weaker dollar. U.S. stocks retreated as a rally in the technology sector fizzled out.
Put Your Trust in Gold -Forbes
"Americans' trust in institutions, from the federal government to banks to the news media, has been deteriorating for decades. Sixty years ago, three quarters of Americans expressed faith in the government to do the right thing 'most of the time' or 'just about always.' Today, only one in five people, a near-record low, believes our leaders make decisions in the country's best interest. The news media fares just as poorly. A new survey finds that Americans believe 'fake news' is a bigger problem right now than violent crime, illegal immigration and terrorism....So where can you still put your trust in today's often cynical world? Friends and family. Our churches and other religious organizations. Our jobs. As an investor, I continue to have great faith in gold as a store of value during times of economic and geopolitical uncertainty. It's behaved precisely as I expect it to. In response to heightened global trade concerns and weakening economic indicators, investors have piled into the yellow metal, pushing its price up for a remarkable eight straight days as of last Friday. We haven't seen such a winning streak since June 2014, when gold traded up for 10 straight days....As I've explained elsewhere, tariffs are essentially taxes and, as such, they're inflationary. This has historically supported the price of gold. Besides Walmart and Costco, a number of other retailers have been telling customers and investors that prices will be going up thanks to the Chinese tariff."
3 reasons real estate is a lousy retirement investment: Location, location, location -USA Today
"Owning a home is wonderful, but don't bank on real estate as your chief retirement investment. People looking to real estate today for retirement riches often point to those big post-crisis gains. Trouble is, you can't buy past performance. And the recent past probably isn't a blueprint for the next 10, 20, 30 years or more. After the housing bubble popped in 2006, prices tanked for five years, bottoming in 2011....Like all assets, home prices move on supply and demand. The key to both? Location, location, location. The housing market isn't uniform nationally or even within the same city...Even where it's cheaper to buy, eye-popping gains aren't guaranteed. If you buy where new construction is limited and job opportunities are humming, keeping supply low relative to demand, you may do very well. But what if you buy where construction eventually outpaces job creation and population growth? What if a city is focused on one or two industries, and what if they fall from favor and fizzle?....Counting on real estate for your retirement nest egg is a very long-term bet on weak real estate development plus good economic fortune - both in one location....Instead, if you see a home purchase as merely guaranteeing a roof over your head and protecting against rising rents, things look different. You don't shun a neighborhood because more housing construction might constrain property values...Homes are great. Banking on them for retirement income isn't."
It's Time To Start Worrying About The Housing Market Again -Financial Samurai
"Despite publishing cautionary posts about investing in stocks, bonds, and alternatives at current levels, the biggest caution I should be writing about is taking out massive debt to buy property at record highs as of 2Q2019. If you lose 50% on your stock and bond portfolio, you'll be upset, but fine. If your property loses 20% of its value, however, this means you've lost 100% of your 20% downpayment. In this scenario, you'll also probably still be fine - if you don't have to sell. But when property prices correct by 20% or more, many people become forced sellers because they've also lost their jobs. Things To Know Before Buying Property Now: 1) Rents have softened from peak levels in many of the most expensive cities. Given property prices are a function of rental income multiples, a real estate buyer should be looking to buy at similar pricing discounts from peak rental periods....2) Mortgage rates are rising. With the surge in the 10-year bond yield all the way up to 3.2% in 2018, mortgage rates followed suit...The 10-year bond yield is hovering at 2.55% again in 2019....3) Prices have blown past their previous peaks in many cities. While every city is different, if you look at the prices in Denver and Dallas, you'll find that the prices are roughly 45% higher than they were in 2006-2007....4) Inventory is slowly creeping higher while rents are flatlining. The construction boom we've experienced over the past several years is finally showing up in the data as a wave of new inventory hits the market. When there's more inventory, pricing comes under pressure....5) It takes a while to recognize a peak. The housing boom that began in January 1996 ended in March 2006. But it wasn't until the beginning of 2008 that people started to accept that the housing market had already peaked....Too much debt is really what will kill you if we ever return to hard times. Buy a house to enjoy life instead of looking to make a profit."
Morgan Stanley bear warns his bleak scenario for 2019 is taking shape -Marketwatch
"Last week, tariffs on Mexico increased the chances that the Fed would cut rates. Investors obviously like that. So, stocks rallied. This week, Trump backs off those same tariffs. Investors apparently like that, too. Stocks again are rallying. Josh Brown of Ritholtz Wealth Management, please explain. 'The market wanted to go up. I don't think it mattered what happened. We just use these things as a reason after the fact to look smart,' the CEO of the New York City-based investment advisory firm wrote. 'That's how it works. It's not meant to be intellectually satisfying. It's meant to take money away from people who think they can explain things.'....Mike Wilson - hailed across Finance Twitter as 'Wall Street’s most bearish analyst' - says there's one big risk out there for investors...'The macro and micro economic data continue to deteriorate,' Morgan Stanley's chief investment officer wrote, pointing to weak durable goods orders, disappointing capital spending, soggy retail earnings, lackluster freight shipments, and a 'very soft' jobs number as evidence of an economy running on fumes....Don't be so quick to blame U.S.-China trade tensions, either, he said. 'The economy was already slowing and escalation potentially makes things worse.' And if you're waiting for a lower interest rates to ignite a rally... don't. 'A rate cut after a long hiking cycle tends to be negative for stocks, in contrast to a pause like in January, which is typically positive,' Wilson said....Wilson's team is looking for GDP to hit the skids in the second half. 'If you listen to what the markets have really been saying this year, they seem to agree with our view that growth will disappoint whether there is a trade deal or not,' he said."
6.10.19 - Fake News: Bigger Issue Than Terrorism
Gold last traded at $1,329 an ounce. Silver at $14.63 an ounce.
NEWS SUMMARY: Precious metal prices eased back from 3-month highs Monday on profit taking and a firmer dollar. U.S. stocks rose after the U.S. reached an agreement with Mexico on tariffs, easing some of the trade concerns.
China Is Buying More and More Gold as the Trade War Drags On -Bloomberg
"China extended its gold-buying spree, adding to reserves for a sixth straight month, as the protracted trade war with the U.S. hurts growth expectations and boosts demand for a portfolio diversifier. The People's Bank of China increased its bullion reserves by 15.86 tons, after almost 58 tons of gold were added to the nation’s stockpile in the five months to April. The rise reflects the government's 'determined diversification' away from dollar assets, Argonaut Securities (Asia) Ltd. analyst Helen Lau said, adding that retail demand has also picked up. At this rate of accumulation, China could buy 150 tons in 2019, according to Lau. China, the world's top gold producer and consumer, is facing the prospect of a slowing domestic economy as the Trump administration raised tariffs on Chinese imports and looked to cut off companies such as Huawei Technologies Co. from the U.S. market. 'It's a diversification away from the U.S. dollar, particularly given the trade tensions and the potential technology cold war that’s evolving,' said Bart Melek, global head of commodity strategy at TD Securities. 'We have to remember that gold is nobody’s liability.' Bullion prices have risen for the past three weeks, hitting the highest level since April 2018, as investors seek out havens and traders increase bets that the Federal Reserve will cut interest rates following signs of weakness."
Americans view fake news as a bigger problem than terrorism -Axios
"Americans view made-up news and information as a bigger problem than other critical issues, including terrorism, immigration, climate change and racism, according to a new survey from Pew Research Center. Why it matters: The survey finds that Americans feel more worried today about fake news because it's undermining their trust in key institutions, like government and the media. The only issues that rank higher than made-up news and information as 'very big problems in the country today' are drug addiction, the affordability of health care, the U.S. political system, and the income gap. An overwhelming majority of Americans (68%) believe made-up news and information has a big impact on their trust in government, according to the survey....The big picture: Misinformation has always existed in various forms, but the internet era has made the problem harder to stop in real-time....What's next: Don't count on the public to be optimistic about the issue ahead of 2020. A majority of those surveyed said they think the problem will get worse over time."
Deepfakes: We Can No Longer Believe What We See. -New York Times
"Digital technology is making it much easier to fabricate convincing fakes. But more complicated fabrications, sometimes called 'deepfakes,' use algorithmic techniques to depict people doing things they've never done...making them appear to say things that they've never said at all. A recent research article suggested a technique to generate full-body animations, which could effectively make digital action figures of any famous person. It's clear that current arguments about fake news are only a taste of what will happen when sounds and images, not just words, are open to manipulation by anyone with a decent computer....We ordinarily tend to think that perception - the evidence of your eyes and ears - provides pretty strong justification. If you see something with your own eyes, you should probably believe it. By comparison, the claims that other people make - which philosophers call 'testimony' - provide some justification, but usually not quite as much as perception. Sometimes, of course, your senses can deceive you, but that's less likely than other people deceiving you. Until recently, video evidence functioned more or less like perception...We all know that Hollywood studios, with enormous amounts of time and money, can use CGI to depict almost anything, but what are the odds that a random internet video came from Hollywood? Now, with the emergence of deepfake technology, the ability to produce convincing fake video will be almost as widespread as the ability to lie. And once that happens, we ought to think of images as more like testimony than perception. In other words, you should only trust a recording if you would trust the word of the person producing it."
Goodbye Middle Class: The Percentage Of Wealth Owned By The Top 10% Just Got Even Bigger -Zero Hedge
"The middle class in America is being systematically eviscerated, and it is getting worse with each passing year...One new study has found that 10 percent of Americans now own 70 percent of all the wealth. Once upon a time, the United States had the largest and most vibrant middle class in the history of the world, but pretty soon we are just going to have the ultra-wealthy and everyone else. Our system has been designed to funnel as much wealth as possible to the very top of the financial pyramid, and that means that most of the rest of us are deeply struggling. And when you are just barely getting by from month to month, all it takes is one bad break to knock you completely out of the middle class and into poverty. According to a study that was recently conducted by the Federal Reserve, the percentage of wealth controlled by the top 10 percent of U.S. households has shot up from 60 percent in 1989 to 70 percent today...The study finds that the share of wealth among the richest 1% increased to 32% from 23% over the same period....Meanwhile, wages have stagnated for ordinary Americans. According to the Social Security Administration, the median yearly wage in the United States is currently just $30,533..and you simply can't support a middle class lifestyle for a typical American family on $2,500 a month....As the cost of living has risen faster than our incomes have, more Americans have been squeezed out of the middle class with each passing month....No matter which political party has been in power in Washington, the middle class has continued to shrink and more wealth and power has become concentrated in the hands of the elite. Now we stand on the precipice of the next major economic downturn, and many are deeply concerned about what that is going to mean for the future of our society."
6.7.19 - Charts Predict Big Gold Rally
Gold last traded at $1,346 an ounce. Silver at $15.03 an ounce.
NEWS SUMMARY: Precious metal prices rose toward yearly highs Friday on safe haven buying and a sharply weaker dollar. U.S. stocks surged after a weak May jobs report spurred interest rate-cut hopes.
Payrolls, Wages Cool as Trade War Weighs on Economy -Bloomberg
"U.S. employers added the fewest workers in three months and wage gains cooled, suggesting broader economic weakness and boosting expectations for a Federal Reserve interest-rate cut as President Donald Trump's trade policies weigh on growth. Nonfarm payrolls rose 75,000 in May after a downwardly revised 224,000 advance the prior month, according to a Labor Department report Friday. The increase missed all estimates in Bloomberg's survey calling for 175,000. The dollar and Treasury yields fell as the data signaled the labor market was facing new pressures even before Trump threatened tariffs on Mexican goods in addition to proposed higher levies on Chinese imports....'It definitely looks like we've downshifted in the pace of job growth,' said Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. 'Overall it's a disheartening report particularly since you may have some trade effects there, but a lot of the trade tensions escalated'."
Chart signals double-digit rally for gold -CNBC
"The gold trade is shining bright. Investors rushed into the commodity on Thursday, pushing it to a four-month high. Gold is now just 1% away from its 52-week high of $1,349.80 from February, and TradingAnalysis.com's Todd Gordon believes it may soon surpass that level. After examining the charts, he says bullion could climb as high as $1,500. Gold has been steadily climbing this year and is now trading around a key level that has provided resistance in the past. Since the commodity is knocking at former highs, Gordon believes that 'the next $60' will see a lot of 'buy stops going off,' which is when traders place orders ahead of time to buy something once it hits a specific price. This activity, Gordon believes, could lead to an acceleration in gold's climb, lifting it back to former highs and maybe even as high as $1,500....In addition to gold looking attractive on a technical basis, Gordon notes that the current economic backdrop of a dovish Fed, a weak dollar and a rise in geopolitical tensions supports a boom in the commodity."
"Game Over!" -Henrich/Northman Trader/Zero Hedge
"The grand central bank experiment of the last 10 years has ended in utter and complete failure. The games of cheap money and constant intervention that have brought you record global debt to the tune of $250 trillion and record wealth inequality are about to embark on a new round of peddling blue meth again. Australia has already cut, so has India. The ECB is talking about it, markets are already pricing in multiple Fed cuts. The new global rate cutting cycle begins anew before the last one ever ended. Brace yourselves as no one, absolutely no one, can know how this will turn out. Absolutely staggering. We are witnessing a historic unraveling here. Everything every central banker has uttered last year was completely wrong. Every projection they made over the last 10 years has been wrong. No wonder Jay Powell wants to toss the dot plot. It's a public record of failure. All the distortions of 10 years of cheap money, debt, wealth inequality, zombie companies, negative debt, TINA, you name it, will all be further exacerbated by hapless and scared central bankers whose only solution to failure is to embark on the same cheap money train again. All under the banner to 'extend the business cycle' at all costs. Never asking whether they should nor considering the consequences. But since they are not elected by the people and face zero consequences for failure they don't have to consider the collateral damage they inflict....We're all staring at a colossal policy failure with no accountability."
Overheating About Global Warming -American Consequences
"Decades of climate-change exaggeration in the West have produced frightened children, febrile headlines, and unrealistic political promises. The world needs a cooler approach that addresses climate change smartly without scaring us needlessly and that pays heed to the many other challenges facing the planet....For starters, leading politicians and much of the media have prioritized climate change over other issues facing the planet. Last September, United Nations Secretary-General António Guterres described climate change as a 'direct existential threat' that may become a 'runaway' problem. Last February, The New York Times ran a front-page commentary on the issue with the headline 'Time to Panic.' And some prominent politicians, as well as many activists, have taken the latest report from the United Nations Intergovernmental Panel on Climate Change (IPCC) to suggest the world will come to an end in just 12 years. This normalization of extreme language reflects decades of climate-change alarmism....Reality would sell far fewer newspapers. Yes, global warming is a problem, but it is nowhere near a catastrophe. The IPCC estimates that the total impact of global warming by the 2070s will be equivalent to an average loss of income of 0.2-2% - similar to one recession over the next half-century. The panel also says that climate change will have a 'small' economic impact compared to changes in population, age, income, technology, relative prices, lifestyle, regulation, and governance....Perhaps even more astoundingly, the number of people dying each year from weather-related catastrophes has plummeted 95% over the past century, from almost a half-million to under 20,000 today - while the world's population has quadrupled. Meanwhile, decades of fearmongering have gotten us almost nowhere. What they have done is prompt grand political gestures, such as the unrealistic cuts in carbon dioxide emissions that almost every country except the U.S. has promised under the 2015 Paris climate agreement. In total, these cuts will cost $1 trillion to $2 trillion per year. But the sum total of all these promises is less than 1% of what is needed, and recent analysis shows that very few countries are actually meeting their commitments. In this regard, the young protesters have a point: the world is failing to solve climate change. But the policy being pushed - even bigger promises of faster carbon cuts - will also fail, because green energy still isn't ready. Solar and wind currently provide less than 1% of the world’s energy, and already require subsidies of $129 billion per year. The world must invest more in green-energy research and development eventually to bring the prices of renewables below those of fossil fuels, so that everyone will switch."
6.6.19 - Perfect Storm Pushing Up Gold Prices
Gold last traded at $1,342 an ounce. Silver at $14.90 an ounce.
NEWS SUMMARY: Precious metal prices rose to fresh 3-month highs Thursday on safe haven buying and a weaker dollar. U.S. stocks traded mixed on investor expectations of looser monetary policy from the Federal Reserve.
Perfect Storm Will Push Gold To $1,400 -Capital Economics/Kitco
"A weak U.S. dollar, falling bond yields and struggling equity markets are creating the perfect storm that will eventually drive gold prices to $1,400 an ounce, according to one research firm. In a report Wednesday, commodity analysts at Capital Economics reaffirmed their year-end target for gold as the market continues to benefit from shifting investor sentiment...Gold prices are holding on to considerable gains, up nearly 4% in the last five sessions; August gold futures last traded at $1,333.80 an ounce, up 0.38% on the day. 'We have long expected the gold price to pick up strongly in 2019, largely because we thought a slowing U.S. economy would prompt the Fed to loosen monetary policy and that risky assets, including equities, would fall sharply,' the analysts said. The analysts said that a weaker U.S. dollar was the spark that lit the fuse for gold's latest rally; at the same time, the U.K. firm expects the move higher to be sustained by weaker global equity markets....'We expect the price of gold to end 2019 at $1,400 per ounce.'"
Magical Monetary Theory -Greenwood & Hanke/Wall Street Journal
"'Modern monetary theory' is the latest craze to circulate among the chattering classes. It is a fuzzy, post-Keynesian theory that has caught on in antiausterity circles. The MMT doctrine states that fiscal deficits don't matter as long as countries borrow in their own currencies and inflation stays in check. This is like manna from heaven for proponents of more government spending and larger fiscal deficits. Not surprisingly, MMT has reared its head in Japan, where debt is denominated in yen, inflation is nowhere to be found, and the ratio of government debt to gross domestic product has gone to the moon. MMT advocates claim Japan provides proof for their theory, but nothing could be further from the truth. Separate, potent forces have given rise to two seemingly strange trends in the Japanese economy: dramatic changes in the savings-investment balances in the public and private sectors, and the failure of monetary policy. MMT doesn't explain either one....Government debt has risen from 60% of GDP in 1990 to an astounding 235% today. But contrary to MMT, this fiscal extravagance has done nothing to boost the economy....Today the U.S. faces the opposite: low broad-money growth with high government debt....MMT advocates would have us believe that governments can run deficits without limit as long as they are financed by securities denominated in their own currencies - at least until inflation takes off...Money dominates economic trends, and classical monetary theory tells us why. Beware of those peddling MMT snake oil."
Russia, China Prepare To Dump Dollar, Agree To Bilateral Trade In National Currencies -Zero Hedge
"Just one month after conducting joint military exercises, Russia and China are set to sign an agreement which would boost the use of their national currencies in bilateral and international trade in an attempt to move away from the current dollar-denominated financial system, according to Russian state-owned news outlet TASS....The Kremlin released a draft decree on Wednesday outlining 'settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People's Republic of China are made in accordance with the international practice and the legislation of the sides' states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan).'....'No one currency should dominate the market, because this makes all of us dependent on the economic situation in the country that issues this reserve currency, even when we are talking about a strong economy such as the United States,' Medvedev said last year....On Wednesday, Chinese President Xi Jinping touted a new level of relations with Russia during his three-day visit. 'Step by step, we've been able to bring our relations to the highest level in history,' said Xi. Russian President Vladimir Putin chimed in, adding as he kicked off the meeting that ties between the two countries are 'at an unprecedented level.'"
Socialism debate roils Democratic primary -The Hill
"A fierce debate over socialism has erupted among Democrats, with several centrist presidential candidates warning that progressive proposals on health care and the environment that have dominated the primary are a surefire way to get President Trump reelected. Three low-polling contenders - former Colorado Gov. John Hickenlooper, Sen. Michael Bennet (Colo.) and former Rep. John Delaney (Md.) - are unloading on socialism or taking shots at 'Medicare for All' and the Green New Deal, which have gone mainstream in the Democratic Party since being embraced by Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (Mass.), as well as Rep. Alexandria Ocasio-Cortez (N.Y.). Hickenlooper and Delaney made waves with their warnings about socialism and Medicare for All at the California Democratic Party convention over the weekend in San Francisco, where they were booed mercilessly by the liberal crowd. Now they've become targets for the party's energized left wing, including Ocasio-Cortez, who encouraged Delaney to 'sashay away' from the race after he said that Medicare for All would result in hospital bankruptcies and cost 150 million Americans access to health insurance. But the centrists are doubling down and warning that a leftward lurch toward socialism could cost Democrats the White House in 2020. 'If we put socialism on the ballot in 2020, that sounds very risky to me,' Delaney said in a Monday phone interview with The Hill. 'The lesson from 2018 is very clear. We flipped the House with moderate candidates...We win when we put forth problem solvers who run in the center.'....Democrats are bracing to see how former Vice President Joe Biden reacts to the controversy, noting that the party's presidential front-runner could ignite a vicious struggle between the progressive and establishment wings of the party if he sides with the centrists....Said one prominent Democratic strategist: 'If we have a general election debate over socialism, we lose.'"
6.5.19 - Should The Fed Fear A Gold Planet?
Gold last traded at $1,333 an ounce. Silver at $14.79 an ounce.
NEWS SUMMARY: Precious metal prices rose for a sixth day Wednesday on safe-haven buying and a flat dollar. U.S. stocks rose as Wall Street increased bets that the Federal Reserve will lower interest rates soon.
Fear of a Gold Planet -Alt-M.org
"Proposed nominees Stephen Moore and Herman Cain having dropped out of contention, discussion continues over the Trump administration's possible next nomination to the Federal Reserve's Board of Governors. The views of the latest candidate under consideration by the administration, Judy Shelton, have revived a question that commentators raised earlier about Moore and Cain: Should favoring some kind of gold standard disqualify a nominee from occupying one of seven seats on the Board?....While the inflation rate today is certainly lower than it was in the 1970s and 1980s, it is still not as low today as it was under the classical gold standard. The inflation rate was only 0.1 percent over Britain's 93 years on the classical gold standard. It was only 0.01 percent in the United States between gold resumption in 1879 and 1913. By contrast, during the most recent ten years (April 2009 to April 2019) of the United States' current fiat money system, the CPI-U price index rose 19.8 percent, for an annualized inflation rate of 1.8 percent. A gold standard has more to offer than an anti-inflation program, however....There are at least three additional arguments for a gold standard that others have made since the Great Recession. First, in contrast to the status quo system, a gold standard combined with free banking would have restrained the boom and the bust. Second, in contrast to fiat standards, gold standards historically have exhibited lower price level uncertainty at medium to long horizons...And third, a gold standard without bailouts provides greater fiscal discipline, restraining government over-indebtedness....Appreciation for the classical gold standard, and a desire to see the Federal Reserve perform at least as well, should not be grounds for disqualification from a seat at the table where monetary policy is made."
The Disconnect Between The Economy & Stocks Is At Record Highs -Zero Hedge
"The bear case for U.S. stocks is getting more compelling by the day, according to Bloomberg macro strategist Mark Cudmore. Via Bloomberg, 'There's been a remarkable deterioration in the macro environment since my column last week, yet U.S. equities have gained in value. This divergence is unsustainable but it's a reminder that bear markets take many months to play out....It should be increasingly clear to even the most optimistic of analysts that any deal between the U.S. and China will be very difficult to achieve and is by no means imminent. Economists are starting to reduce their growth projections but there's a great amount of global economic damage still to be factored in. Equity strategists mostly remain in denial but, at some point, they will speak to their eco-colleagues and slash earnings forecasts, making overvalued U.S. stocks appear even more expensive....the U.S. seems determined to also pick a fight with its second-largest trading partner (after China) with the threat of imminent tariffs on Mexico...And then there's the marginal negative of removing tariff exemptions on India, the world's fifth-largest economy....Bear markets are always difficult to trade and bear market rallies can be savage."
Gold At 3-Month High Amid Rate-Cut Expectations -Investing
"Gold prices continued to surge in early trading on Wednesday, entering a sixth consecutive day of gains. Rising expectations that the U.S. Federal Reserve will cut interest rates and ongoing global trade tensions helped to push the yellow metal to its highest levels since February 21st. Federal Reserve chairman, Jerome Powell signaled on Tuesday that the central bank is ready to cut interest rates if necessary. Stocks soared on the heels of the remarks with the Dow gaining over 500 points as the market saw an increase in the likelihood of a cut in rates....A slew of alarming headlines intensified trade related tensions last week; on Monday President Trump stated that the U.S. is 'not ready' for a trade deal with China. The People's Daily, China's largest state owned newspaper, responded on Wednesday with a commentary titled 'United States, don't underestimate China's ability to strike back'....Analyst forecasts for weaker global economic growth has supported safe havens such as gold, the Japanese yen and the Swiss franc."
G.O.P. Stumbling blind into the age of diversity -Brooks/New York Times
"For much of the 20th century, young and old people voted pretty similarly. The defining gaps in our recent politics have been the gender gap (women preferring Democrats) and the education gap. But now the generation gap is back, with a vengeance. This is most immediately evident in the way Democrats are sorting themselves in their early primary preferences. A Democratic voter's race, sex or education level doesn't predict which candidate he or she is leaning toward, but age does....As Ronald Brownstein pointed out in The Atlantic, older Democrats prefer a more moderate candidate who they think can win. Younger Democrats prefer a more progressive candidate who they think can bring systemic change...The generation gap is even more powerful when it comes to Republicans...In 2018, voters under 30 supported Democratic House candidates over Republican ones by an astounding 67 percent to 32 percent....It's hard to look at the generational data and not see long-term disaster for Republicans. Some people think generations get more conservative as they age, but that is not borne out by the evidence....Unlike the Silent Generation and the boomers, millennials and Gen Z voters live with difference every single day. Only 16 percent of the Silent Generation is minority, but 44 percent of the millennial generation is...In just over two decades, America will be a majority-minority country....These days the Republican Party looks like a direct reaction against this ethos - against immigration, against diversity, against pluralism....The most burning question for conservatives should be: What do we have to say to young adults and about the diverse world they are living in?....There is a conservative way to embrace pluralism and diversity. It's to point out that there is a deep strain of pessimism in progressive multiculturalism...A better multiculturalism would be optimistic: We can communicate across difference; the American creed is the right recipe for a thick and respectful pluralism; American structures are basically sound and can be realistically reformed."
6.4.19 - Gold in the Age of Eroding Trust
Gold last traded at $1,328 an ounce. Silver at $14.76 an ounce.
NEWS SUMMARY: Precious metal prices remained near 3-month highs Tuesday on a flat dollar. U.S. stocks rose as trade tensions eased slightly and the Fed signaled it will help the economy if needed.
Stocks Have a Rendezvous With Destiny -Bonner/Bonner And Partners
"You'll recall that the Greed/Fear ratio - the ratio of the Dow to gold - measures the underlying zeitgeist of a society. Like every natural thing, a society breathes in and out. Sometimes, it is bold. And sometimes, it is fearful. Sometimes, it gets richer with open trade and win-win deals… and sometimes, it closes the door and wants protection. Greed, or 'optimism,' reached its peak in 1999...At that point – Peak Greed – it took 41 ounces of gold to buy the 30 Dow stocks… up from just 1 ounce in 1980. 'Sell stocks; Buy gold,' we told dear readers...And for a while, that's what happened. Stocks fell. Gold climbed. The Dow-to-Gold ratio very nearly hit 5 in 2009....If we’re right, the runup in asset prices since 2009 was just a fake-out. Fake money created a fake boom and a fake bull market. Asset holders – mostly, the top 10% – made money. Everyone else lost ground....In September 2018, the feds bounced the Greed/Fear ratio back up to 22. But there it stopped… and then began to sink again. Twice since then, it has tried to rally. Twice it has failed. Now, the Greed/Fear ratio is about 19. Gold is trading at a three-month high. Stocks are under pressure. If we're right, the Greed/Fear index will continue to fall…until it finally makes its historic rendezvous with destiny somewhere below 5."
Gold in the Age of Eroding Trust -Yahoo Finance
"On Tuesday, Incrementum AG published its annual In Gold We Trust report. The authors did a lot of work – the full version has 339 pages!....The current edition of the report focuses on trust, which is the basic value of any interpersonal relationship and the foundation of social order in general. The problem is that we are observing the erosion of trust in many areas. Think about the politics - only one person in ten still has confidence in the government...Gold is 'clotted' trust or, clotted mistrust against all other promises of value. Indeed, the recent acceleration in central banks' purchases of gold and the repatriation of their bullion indicate growing distrust in the current monetary system based on fiat currencies in general, and the greenback in particular....'Trust looks to the future, forms itself in the present, and feeds itself from the past...Gold is the universal reserve asset to which central banks, investors, and private individuals from every corner of the world and of every religion and every class return again and again.'....The authors are perma-bullish and they believe that gold is already in the early stages of a new bull market which could soon pick up momentum...a gold price of over $1,800 seems within reach in the medium term, the report authors further believe....When the trust in the Fed and the US dollar fades, gold will shine...We also trust in gold, but it’s important to not expect too much and too soon from it. Gold glimmers beautifully, but how is it supposed to shine in a bright room?"
The government is threatening big tech — and the market just took notice -CNBC
"Politicians and technology executives have spent well over a year debating the proper role for regulators in the tech industry, which has assumed outsized influence over the U.S. economy. Monday was the day that the chatter turned to early stages of action, and the market punished big tech. Investors were most concerned about Facebook and Google parent Alphabet on Monday, sending shares of each down more than 6%. Amazon dropped more than 4.6% and Apple slid 1%. In total, they lost about $130 billion in market value and led a 1.6% slump in the Nasdaq Composite, sending the tech-heavy index into correction territory - down more than 10% off its record high set in April. Following reports late Friday that the Justice Department is preparing an antitrust probe of Google, Reuters reported on Monday that the same department has been given jurisdiction over Apple’s practices as part of a broader review into the behavior of tech companies....In assuming greater oversight over four of the world’s five most valuable companies (Microsoft has the biggest market cap), regulators are suggesting that the days of unfettered growth for the tech industry may be numbered."
Worried You're Going to Retire in a Bear Market? Here's What to Do. -Barrons
"Most of us spend our working lives saving for retirement. But retirement isn't just grandkids and golf clubs - it's also the moment a financial plan is most at risk. And the next wave of retirees may be particularly vulnerable. We are a decade into a robust bull market...but there's virtually no market strategist, economist, or investor who expects the next 10 years to look like the past 10. Investors - and new retirees in particular - need to prepare for much lower returns, and protect themselves from a downturn. A market downturn early in retirement is much more damaging than one a decade or so in...The math is simple: If your portfolio drops 20%, you need a 25% gain just to get back to where you were. And if you’ve withdrawn money to live on, your balance is even lower and requires an even greater upswing to recover....If market turmoil increases as you're nearing retirement, consider working a little longer, if you're able. Another year of living off your salary rather than your savings can benefit you for decades, as discussed earlier; you might be able to save a bit more, and your Social Security benefit will increase."
6.3.19 - Nasdaq Enters Correction Territory
Gold last traded at $1,327 an ounce. Silver at $14.74 an ounce.
NEWS SUMMARY: Precious metal prices shot higher Monday on safe-haven buying and a weaker dollar. U.S. stocks fell as investors fretted over the possibility of tech giants like Alphabet and Facebook facing tighter regulations.
Malaysia's Mahathir Mohamed Goes For Gold -Forbes
"Last week in Tokyo, while addressing the 25th International Conference on the Future of Asia, Malaysia’s Prime Minister, the venerable Mahathir Mohamad, went for gold. He brought the audience to attention by proposing an Asian currency linked to gold. Dr. Mahathir argued that such a currency would promote regional stability, while avoiding the so-called 'dollar trap' (read: dollar dependency). This time around, the ninety-three-year-old Mahathir is onto something - something that would deliver its advertised benefits. Dr. Mahathir’s comments on currencies are, of course, legendary. Remember the Asian Financial Crisis of 1997-1998? That is when Prime Minister Mahathir lashed out against currency speculators, particularly George Soros, and imposed capital controls on September 1, 1998 to 'save' the hapless Malaysian ringgit from a meltdown....Dr. Mahathir has turned away from what turned out to be a phony currency quick fix to a real elixir - indeed, the real thing: gold. Just how could Dr. Mahathir implement his idea? He could start in Malaysia. The Malaysian ringgit would be changed from a fiat currency to a gold-backed ringgit that would trade at a fixed rate of 'X' grams of fine gold per ringgit....A gold-backed currency board would provide Malaysia with a 'Great Escape' from the U.S. dollar trap. By reestablishing such a currency board in Malaysia, the ringgit would literally be as good as gold. Others might follow Malaysia's lead. Yes, Iran, Turkey, Russia, and so on, might also go for gold. And, from one day to next, a significant gold bloc would be established."
Fed Chairman Jerome Powell: The 60 Minutes interview -CBS News
"Chairman Jerome Powell was appointed to the board of governors by President Obama and was elevated last year to chairman by President Trump. When we met with Powell in early March at the Fed's headquarters in Washington, we asked the chairman about interest rates, whether the president can fire him and what he believes are the greatest threats to prosperity...Scott Pelley: Have you stopped raising rates? Jerome Powell: We don't feel any hurry to change our interest rate policy. What's happened in the last 90 or so days is that we've seen increasing evidence of the global economy slowing down....Pelley: Where do you see weakness in the U.S. economy? Powell: We've seen a bit of a slowing, But I would say the principal risks to our economy now seem to be coming from slower growth in China and Europe and also risk events such as Brexit....Pelley: Can the president fire you? Powell: Well, the law is clear that I have a four-year term. And I fully intend to serve it....Pelley: Are American banks safe today? Powell: The American banking system is much, much stronger and more resilient than it was before the financial crisis...There's a plan for what to do, which doesn't involve a taxpayer bailout....Pelley: How concerned are you about either criminals or more importantly hostile nations attacking our banking system through the computer system? Powell: I would say for cyber risk, I've never felt a time when I think we're doing enough. Pelley: I have the sense that I just hit on the thing that keeps you up at night. Powell: I would say of the risks that we face, that certainly is the largest one. Pelley: It's become your top priority. Powell: Cyber is a relatively new kind of a risk with nation-state actors. And it's one where - the playbook is still being developed in real time."
Nasdaq Enters Correction Territory -CNBC
"The Nasdaq Composite dropped 1.4%, led lower by sharp declines in Alphabet and Facebook on Monday. The tech-heavy index also entered correction territory, trading more than 10% below its record high set in late April....U.S. manufacturing activity in the U.S. fell last month to its slowest pace of growth since October 2016, according data from the Institute for Supply Management....The major indexes fell more than 1% each on Friday to end a torrid month for Wall Street. Stocks logged in their first monthly decline of 2019, snapping a four-month winning streak....'This issue with China continues to be the big elephant in the room,' said Randy Frederick, vice president of trading and derivatives at Charles Schwab. 'If the two sides, China and the U.S., break down on these negotiations, we could see a 10% correction. We're more than halfway there already and talks haven't broken down yet.'....Alphabet shares slid 6.5% after reports said the Justice Department is preparing to launch an antitrust probe on Google. Facebook shares declined by 4% as the news sparked fears the social media company could also be hit with tougher regulations."
The Tide of Fear Is Approaching -Bonner/Bonner And Partners
"The further stock prices get away from the economy that supports them, the greater the danger that they will die in the woods, like a lost hiker....For what it is worth, our indicators are flashing red. If this were a car, we'd pull over to the side of the road and open the hood. There, we may find a trade war, frayed politics, stretched-out valuations, and maybe even an upside-down yield curve....The world of money is not a mechanic's world; it is a poet's world...And it is ruled by two major emotions: greed and fear. People are either eager to get more… or they are afraid of ending up with less. Typically, when investors are greedy, they buy stocks - especially in innovative new companies, where 'he sky's the limit' on the profits they might earn. And then, when the sky begins to fall, the tide ebbs and they grow fearful. Then, they retreat to bonds… real estate… cash… and ultimately, gold. The same cycle dominates life itself. Boom… then bust. Greed… then fear. A young man is greedy for new things… new experiences… new wealth. He hungers for the first light… for a race… for an app!...An older man, alas, can't take chances. He is the old dog who doesn't want to try new tricks; he might hurt himself....But what ho? A recent Gallup poll tells us that even the young are becoming fearful. They no longer trust freewheeling capitalism, a can-do spirit, and an open economy to deliver the goods. Millennials (those aged 22–37) told pollsters that they would be just as happy with socialism as with capitalism. Until now, Americans of all ages favored freedom (or, at least, so they said). Now, it's protection they want....Since 2009, approximately $50 trillion dollars has flowed into American household wealth - mostly in stocks, bonds, and real estate… and mostly into the households of the rich. What are the odds that the tides have stopped now… and that that $50 trillion stays put?"
5.31.19 - Why Parents Should Teach Kids to Give
Gold last traded at $1,311 an ounce. Silver at $14.56 an ounce.
NEWS SUMMARY: Precious metal prices traded sharply higher Friday on international trade fears. U.S. stocks fell as investors feared President Trump's threat of tariffs on Mexican imports, amid a worsening trade war with China, could send the U.S. economy into a recession.
Stocks Fall as Trump’s Mexico Tariff Threat Rattles Markets -Wall Street Journal
"Stocks and bond yields around the world fell Friday after President Trump threatened to impose escalating tariffs on Mexico, capping a brutal month for markets as rising trade tensions roiled investor confidence. The threat pushed stock markets down as investors feared applying tariffs on Mexican products could hurt corporate earnings, increase prices for U.S. consumers and crimp economic growth. As investors sold stocks, they moved to government bonds, gold and the Japanese yen, all assets typically perceived as safer. 'This will impact consumer spending. This will impact corporate earnings. This is utilizing a trade policy tool to enforce policy outside of trade, and that sets a concerning precedent and leaves investors wondering how else tariffs could possibly be used,' said Kristina Hooper, chief global market strategist at Invesco. 'Markets were already freaking out over existing tariffs. We've just thrown gas on the fire.'....Using tariffs to influence immigration policy shows the White House is prepared to use trade to gain leverage outside of the economic sphere, Martin Moeller, co-head of Swiss and global equity at Union Bancaire Privée said. He suggested the next target could be NATO members that refuse to raise military spending in line with U.S. demands."
Fed candidate slams central bank's 'Soviet' power over markets -Financial Times/GATA.org
"Judy Shelton, a senior US official who is being vetted for a job on the board of the Federal Reserve, has attacked the central bank for wielding undemocratic, Soviet-style powers over markets and suggested it should not even be in the business of setting interest rates. In an interview with the Financial Times at the Trump International Hotel in Washington this week, Ms. Shelton called on the Fed to 'think about whether they are doing more harm than good.' If appointed to the board, she would be 'asking tough questions' about its most basic mission, she said. 'How can slightly less than a dozen people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market-supply-determined rate? The Fed is not omniscient. They don't know what the right rate should be. How could anyone?' Ms. Shelton said. 'If the success of capitalism depends on someone being smart enough to know what the rate should be on everything ... we're doomed. We might as well resurrect Gosplan,' she said, referring to the state committee that ran the Soviet Union's planned economy. Ms. Shelton did post-doctoral research on the Soviet economy at Stanford University's Hoover Institution....Ms. Shelton has called for the central bank to stop paying banks interest on excess reserves, a policy introduced during the financial crisis, saying it was turning financial institutions into 'utilities,' rewarding them for allowing money to 'sit doing zilch' rather than being loaned out. She also said that the Fed should continue to reduce its balance sheet below the $3.5 trillion target set by Jay Powell, the chairman. 'I would rather the Fed be less of an entity. When a central bank buys up government debt, that's the beginning of compromised finances.'....Ms. Shelton, who has close ties to Larry Kudlow, the director of the National Economic Council, as well as David Malpass, the president of the World Bank, worked for Mr. Trump as an economic adviser during the 2016 presidential campaign."
Gold Prices To Hit $1,400 "In A Near Second" Should Inflation Rise -Kitco
"Recently imposed tariffs on Chinese imports could push up inflation in the U.S., adding a tailwind to gold prices, this according to Frank Holmes, CEO of U.S. Global Investors. 'Historically when you look at tariffs, it's a taxation, and that taxation is going to be picked up by the consumers in America, and so that's going to be inflationary for buying products,' Holmes told Kitco News. Gold has historically been a good hedge against inflation, and Holmes noted that this time around will not be any different. In addition, lower rates from a more dovish Fed will also provide a boon for gold prices, Holmes said. 'Now we're seeing rates are much lower than they were in October, and that is also a very supporting underbelly structure for the price of gold, and if you add inflation on that, gold in a near second is going to be $1,400,' he said."
Why Parents Should Teach Kids to Give -University of Arizona
"Teaching children how to appropriately give money away can help them learn financial basics such as budgeting, and it may contribute to their well-being later in life, UA research suggests. Financial education often stresses the importance of earning and saving, but new research suggests that one of the most valuable lessons parents can teach their children about money might be how to appropriately give it away. The study, led by University of Arizona researcher Ashley LeBaron and published in the Journal of Family and Economic Issues, explores how financial-giving habits are passed down through generations, and how early life lessons in giving may contribute to personal and financial well-being later on. LeBaron and her collaborators interviewed 115 participants, including college students, parents and grandparents, about what they learned about money from their parents. The parent and grandparent participants also were asked what they taught their children about the topic, ultimately providing researchers a picture of how financial lessons are shared across four generations. Participants were not asked to talk about financial giving directly, yet nearly 83 percent of them brought it up as an important part of the financial education they gave or received....They generally talked about three different types of giving: 1. Charitable donations. This encompasses monetary gifts to religious or charitable organizations. 2. Acts of kindness. This includes donations, gifts or acts of service provided more directly to people in need. Examples might include providing meals for homeless individuals or purchasing Christmas gifts for neighboring families in need. 3. Investments in family. This category encompasses financial decisions made by parents to benefit their children or family....LeBaron and her colleagues also found that just as parents can influence their kids' financial behaviors, so, too, can kids influence their parents....'In finance classes, we never talk about giving,' LeBaron said. 'But we learned that giving is maybe one of the more important facets of financial socialization, so we need to be paying more attention to how it is taught.'"
5.30.19 - GOP's Duty: Explain the Cost of 'Free'
Gold last traded at $1,292 an ounce. Silver at $14.49 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying despite a firmer dollar. U.S. stocks wobbled as investors were cautious amid ongoing worries over the global economy.
Why the stock market is one or two bad economic reports away from a collapse -Yahoo Finance
"The signs are starting to build that the global economy is cooling down more quickly than many balding pundits and aging stock price predictors would have investors to believe. Consequently, valuations on stocks are well overdue for a significant haircut...Think 10% nosedive, or more. In other words, a classic collapse....To many, the Federal Reserve is a friend and the U.S. jobs market is humming along - both serving as powerful reasons for stocks not to stay on the mat for too long. Going lost in this rose-colored glasses backdrop is mounting evidence that the trade war is taking its toll on companies around the world. In turn, economic data and leading areas of the market are worsening....'If markets are pinning their hopes on a U.S.-China trade deal next month or on the Fed successfully saving the day, then they could be in for a rude awakening,' says Paul Ashworth at Capital Economics. Ashworth believes incoming economic data point to a 'sharp' slowdown....Many on Wall Street I have talked with these past few weeks continue to be optimistic on stocks this year...All of this dialogue suggests to me the market is one or two bad economic reports away from a sharp reversal as investment theses become derailed."
The GOP's Duty: Explain the Cost of 'Free' -Jindal/Wall Street Journal
"Progressives are changing the Democratic Party's focus from building stronger safety nets for the disadvantaged to subsidizing everything for everybody...Democrats now promise free college, free health care and more - for everyone. Republicans can't outspend Democrats, but they can make the case for freedom and against the idea that everything is 'free' without sounding like Scrooge...The American Dream is to get a good job and live better than one's parents; becoming dependent on government is the American nightmare. Even Howard Schultz, the man who brought America $5 coffee, realizes promises like Medicare for All are unrealistic and too expensive. Yet Republicans have to do more than mock the Green New Deal's bans on air travel, targeting of flatulent cows and subsidies for those unwilling to work if they want to persuade young voters of the case for limited government and personal freedom. In reality, 'free' means more government control at the expense of consumer autonomy....Progressive health, education and energy policies would result in government interference in larger parts of the economy...Consumers have a hundred choices of coffee but won't be able to choose their health plans. Government paying for college would result in even more political interference with academic freedom....'Free' means less efficiency, more expense and lower quality....Republicans have lost credibility on fiscal responsibility. Spending vastly increased on their watch. Even so, Medicare for All’s $32 trillion price tag makes even today's appropriators look miserly. Republicans can't outbid Santa Claus. Americans are willing to work hard and sacrifice for a better life but need to know how pro-growth policies benefit them...They will embrace effective market-based solutions that promote freedom if Republicans offer them, but voters will only wait so long."
'The Riskiest Credit Market Ever, Central Banks Control Over Markets Is Coming To An End' -Pimco/Zero Hedge
"The world's largest bond manager is getting extremely worried about two things that it knows a lot about; i) the overall market and ii) the bond market in particular. Speaking to Bloomberg TV, Scott Mather, chief investment officer of U.S. core strategies at Pimco, joined a bevy of other money managers and warned, in no uncertain terms, that the credit market is heading for a crash the likes of which have never before been seen. 'We have probably the riskiest credit market that we have ever had' in terms of size, duration, quality and lack of liquidity, Mather said, adding that the current situation compares risk to mid-2000s, just before the global financial crisis. 'We see it in the build up in corporate leverage, the decline in credit quality, and declining underwriting standards - all this late-cycle credit behavior we began to see in 2005 and 2006.'....Mather said that Pimco is 'much more defensive' and prefers asset backed securities....Mather's conclusion: 'People are starting to come to a more realistic outlook about the forward-looking growth prospects, as well as the power of central banks to pump up asset prices.' Considering the S&P is about a few hundred percent higher than where it would be without central banks 'pumping up prices', the market is about to go through a lot of pain in the near future if the world's largest bond manager is correct."
10 Things College Grads Can Do to Prepare Themselves for the Journey Ahead -Whitehead/FEE.org
"Cersei Lannister of Game of Thrones once said, 'No matter who you are, no matter how strong you are, sooner or later, you'll face circumstances beyond your control.' Those coming of age today will face some of the greatest obstacles ever encountered by young people...Based on the current political climate, things could very well get much worse before they ever take a turn for the better. Here are a few pieces of advice that will hopefully help those coming of age today survive the perils of the journey that awaits: 1. Be an Individual - As John F. Kennedy warned, conformity is 'the jailer of freedom, and the enemy of growth.'....2. Learn Your Rights - We're losing our freedoms for one simple reason: most of us don't know anything about our freedoms....3. Speak Truth to Power - Don't be naive about those in positions of authority. People in power, more often than not, abuse that power....4. Resist All Things That Numb You - As George Orwell warned, 'Until they become conscious, they will never rebel, and until after they rebelled, they cannot become conscious.'....5. Don't Let Technology Turn You into Zombies - Techno-gadgets are merely distractions from what's really going on in America and around the world....Read all 10 things here.
5.29.19 - How to Fix the Broken Welfare State
Gold last traded at $1,281 an ounce. Silver at $14.43 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying despite a firmer dollar. U.S. stocks fell sharply as bond yields declined again, triggering concerns about the economic outlook amid increasing trade tensions in the China-U.S. trade fight.
U.S. economy is on 'recession watch' as bond market flashes warning -Morgan Stanley/CNBC
"The stock market and economic outlook in the United States are 'deteriorating,' according to an analysis from one of Wall Street's top investment banks. Renewed trade tensions and a slump in economic data - ranging from falling durable goods and capital spending to a downshift in the services sector - has put U.S. profits and economic growth at risk, Morgan Stanley warned Tuesday. 'Recent data points suggest US earnings and economic risk is greater than most investors may think,' wrote Michael Wilson, the firm's chief U.S. equity strategist....Wilson was one of the most bearish stock strategists last year...often warning that investors could be caught in a 'rolling bear market' for the next several years. The stock market sold off Tuesday, adding to steep losses for the month of May. The Dow fell 237 points and the S&P dropped 0.8% during the session; they are down 4.6% and 4.8% this month, respectively."
The dollar may be knocked off its pedestal -Mahtani/GATA.org
"Will the U.S. dollar soon lose its status as the world's pre-eminent currency?...Developments in foreign-exchange markets during the past 18 months point toward dedollarization. Consider that Chinese 'petroyuan' crude-oil futures now sit right behind Brent and West Texas Intermediate in trade volume. The world's central banks bought more gold last year than at any time since President Nixon took the U.S. off the gold standard in 1971. Markets recently learned that China added gold to its reserves for the fifth month in a row. Earlier this year, the U.K., France, and Germany created a new payment-processing system to permit payments to Iran. It will begin quietly with humanitarian aid, then move to other goods and services, potentially competing with the American-influenced Swift system....Surging U.S. oil production also has implications for the currency. By 2025 the U.S. is expected to overtake Saudi Arabia as the world's biggest oil exporter...This is in many ways positive for the U.S. economy, but if America buys less international crude oil while the Chinese ramp up purchases, the likelihood increases that oil exporters will accept currencies other than the U.S. dollar....Meanwhile, political polarization in the U.S. implies budget deficits as far as the eye can see, driven by tax cuts and higher entitlement spending. Congressional Budget Office forecasts show U.S. federal debt hitting 152% of gross domestic product by 2048, up from 78% today. The U.S. twin deficits - fiscal and current account - are a good leading indicator of dollar weakness....Habitual dollar use remains high - everywhere. Nevertheless, the emergence of a genuinely multipolar world means the coming market cycle is likely to be different. The U.S. dollar may finally be knocked off its pedestal."
25% of Americans say they worry about money 'all the time' -CNBC
"Americans are feeling mostly good about their finances, according to data recently published by analytics firm Gallup. At the start of 2019, in fact, their optimism 'reached levels not seen in more than 16 years,' Gallup found....However, not everyone is as optimistic. Nearly 30% of respondents rate their financial situation as 'only fair' and 15% say it's 'poor.' Meanwhile, 25% worry 'all' or 'most' of the time that their household income won't be enough to cover their expenses. Their biggest concerns: Saving enough for retirement and unplanned medical costs, with 54% and 51%, respectively, saying they're 'very' or 'moderately' worried about each prospect. Other studies could point to why: Northwestern Mutual surveyed more than 2,000 U.S. adults in 2018 and found that a third have less than $5,000 stashed away for retirement...Meanwhile, 21% have nothing saved at all, the data shows. A third of Americans don't have enough savings to cover an unexpected $400 expense, like a medical emergency, without selling something or borrowing money, the Federal Reserve found."
The Welfare State Is Broken. Here's How to Fix It. -Brooks/New York Times
"Ella is a British woman who grew up in a broken home and was abused by her stepdad. Her eldest son got thrown out of school and ended up sitting around the house drinking. By the time her daughter was 16, she was pregnant and had an eating disorder. Ella, though in her mid-30s, had never had a real job....An astonishing 73 professionals spread across 20 different agencies and departments got involved with this family. Nobody had ever sat down with them to devise a comprehensive way forward. In her mind-shifting book, 'Radical Help,' the British social entrepreneur Hilary Cottam tracks how one of the social workers in Ella's case spent his days. Roughly 74 percent of his time was spent on administrative matters...Only 14 percent of the social worker's time was actually spent with the family he was meant to be serving....Cottam asked the government workers involved in Ella's case if they could recall a time when they'd transformed a family so it no longer needed government help. They couldn't think of one....Most Western systems were not designed to confront the kind of poverty prevalent today. When these systems were put in place in the 1950s and '60s, unemployment was more often a temporary thing...Now, economic insecurity is often a permanent state, as people patch together different jobs to make ends meet. Cottam has spent the past decade or so helping local authorities across Britain build new welfare programs...Ella was asked if she would like to lead a 'life team' that would help her family turn around. She agreed. Members of the team spent 80 percent of their time with the family and only 20 percent on administration. Ella and the team worked together to stabilize her most immediate issue - negotiating away eviction notices. Then the team worked to improve inter-family dynamics so there wasn't so much violence and screaming....Ella got her first office job and assumed more responsibility for her family. Her kids were back in mainstream schooling. In the old welfare model, social workers are detached professionals and overwhelmed, bound by bureaucratic rules and often slipping into emotional permafrost. At Life Team, it's about relational accompaniment, giving social workers the discretion to do what they think is best....The old legacy welfare programs were designed for people enmeshed in thick communities but who had suffered a temporary setback. Today many people lack precisely that web of thick relationship. The welfare state of the future has to build the social structures that people need to thrive. This is one way government can build community."
5.28.19 - Recession: Now is Time to Prepare
Gold last traded at $1,277 an ounce. Silver at $14.47 an ounce.
NEWS SUMMARY: Precious metal prices eased back Tuesday on profit-taking and a firmer dollar. U.S. stocks rose in choppy trading as investor trade worries persisted following President Trump's latest remarks.
Gold To Tackle $1,300, Watch For 'Deteriorating Data' -TD Securities/Kitco
"'Buying the dips' will define gold's latest trading pattern as the precious metal heads towards $1,300 in the near-term, guided by a dovish Federal Reserve and an aversion to risk amid U.S.-China trade tensions, according to TD Securities. 'Gold is set to improve and trend toward $1,300/oz. Lower rates, a flat curve and a growing likelihood of rising equity market vol are all factors helping gold … suggesting buying the dips may well be the order of the day in the precious space,' TD Securities strategists wrote in a note on Monday. The precious metals sector is finally starting to benefit from some renewed risk aversion amid escalating tensions between the U.S. and China, TD Securities pointed out....Another core element lending gold a hand is a more dovish perception of the Federal Reserve, TD Securities noted, adding that the U.S. central bank could cut rates sooner than expected. 'The risk from a slower global economy will drive the Fed to cut sooner rather than later, keeping the global yield curve flat and interest rates low,' TD Securities explained."
"Unmistakeable Whiff Of Recession": The Time To Prepare Is Now -Zero Hedge
"Although talk of a recession subsided early this year, it's back in full force thanks to the trade war with China. 'Call it scare-mongering if you like, but many of the data releases last week had the unmistakable whiff of a recession,' said chief U.S. economist Paul Ashworth of Capital Economics. According to Market Watch, none of us should expect great economic news during this holiday-abbreviated week. The trade deficit is likely to widen (and not in the United States' favor), consumer confidence could decline (and it should for all intents and purposes), and household spending was probably tepid in April. This all signifying one thing: an economic recession. The U.S. economy has taken a turn for the worse and it doesn't look as if things will get much better anytime soon as global problems persist. A mountain of evidence in the past two weeks shows that key segments of the economy have slackened. Retail sales fell last month, business investment nearly dried up and manufacturers are growing at the slowest pace in nine years....This trade war has the ability to fling the U.S. into recession, and if that happens before the election in 2020, Donald Trump’s chances of reelection will drop dramatically."
Only Central Bankers Could Dream Up 'Negative Interest Rates' -Tamny/Real Clear Markets
"Central bankers are an odd bunch. They're convinced that 'low interest rates' at banks will power economic activity, but low interest rates paid on deposits signal low-risk lending. Think about it. If banks were truly seeking higher return loans they would be paying more for deposits....What's expected to not succeed, and what's dismissed right up to when it flowers, is rarely - if ever- hatched by low-interest lending. Entrepreneurs, by their very name, believe in a concept that most think has no chance of success. Hence the surprise when they prosper. Still, it's a reminder that a venture with the potential for surprising upside would never rate a low-interest loan....All of this requires lots of thought as European central banks work to stimulate economic growth through 'negative rates.' According to a Wall Street Journal report from last Tuesday, the thinking inside central banks is that if they charge actual banks for parking cash with them, those institutions will instead lend their reserves at a market rate of interest, thus allegedly stimulating the economy. And if they charge individual customers to park their cash, maybe those customers will instead spend the money....True growth is driven by surprise developments that spring from investment in what's the picture definition of uncertain. In short, negative rates and entrepreneurial endeavor have nothing to do with one another."
A Europe More Divided -Wall Street Journal
"Anyone looking for a clear message from the European Union's parliamentary elections has a better divining rod than we do. The anti-EU right did well, but so did the greens on the left. While nationalists gained votes, pro-EU parties will still hold two-thirds of the seats in Brussels. Perhaps it makes more sense to look at the meaning for nation states....The ruling Conservative Party fell to 9%, as voters punished it for bumbling over Brexit. The competitors to succeed Prime Minister Theresa May, who announced her June departure last week, differ on the kind of Brexit they'll seek....While the European Parliament still has a pro-EU majority, it's as fragmented and ideologically incoherent as ever. The traditional center-right and center-left parties saw declines from 2014 but remain the two biggest parties. The bloc's 28 members, save Britain, support basic EU arrangements like the free movement of people and goods. But the deeper political integration envisioned by German Chancellor Angela Merkel and Mr. Macron requires a much broader consensus."
5.24.19 - Things You Didn't Know About Memorial Day
Gold last traded at $1,284 an ounce. Silver at $14.57 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a weaker dollar. U.S. stocks headed for a fifth-consecutive weekly loss as investors worry the U.S.-China trade war is hurting economic growth.
Gold scores weekly win after reasserting haven role -Marketwatch
"Gold prices edged higher Friday and were on track for a weekly win after seeing renewed haven demand on the back of trade-war worries....'Gold's safe-haven demand has underperformed other flight-to-safety assets throughout the recent trade war escalation,' said Edward Moya, senior market analyst at Oanda....Gold caught a flight-to-safety bid Thursday, settling at a one-week high, as U.S. stocks fell sharply, with the decline blamed on rising U.S.-China tensions that investors now fear could turn into a prolonged trade battle. A weaker U.S. dollar also provided support, as did a fall in bond yields....Gold also appeared to find some support from political uncertainty in the U.K. following Prime Minister Theresa May's decision to step down next month after failing repeatedly to win support for her Brexit plan, ensuring weeks of continued wrangling over the terms of the country’s exit from the European Union."
18 Things You Didn't Know About Memorial Day (But Should) -24/7 Wall Street
"This Monday, May 27, is Memorial Day, so named because it is the day we remember those who died in war defending the United States...As the nation prepares to observe Memorial Day, 24/7 Tempo has compiled a list of things you didn't know about the holiday (but should), using resources such as the U.S. Department of Veteran Affairs....1. It started as a response to the Civil War carnage - In 1868, three years after the end of the Civil War, several Union Army veterans established a day to honor those who had fallen during the nation’s deadliest conflict....2. A former general, not the president, made the day a holiday - A retired Union Army major general, John A. Logan, the commander-in-chief of a veterans' group, which was called the Grand Army of the Republic, set the date of the holiday for May 30....3. It used to be called Decoration Day - The day we now observe as Memorial Day was originally called Decoration Day so that the nation could place flowers on the graves of those fallen in battle....4. This is why it's celebrated in May - May 30 was chosen for the holiday because it was not the anniversary of any particular battle....5. The date may have been chosen because of the weather - Some historians believe that the date for the holiday was selected to ensure that flowers across the country would be in full bloom by that time....6. Freed slaves held the first ceremony - Freed slaves are believed to have held the first event commemorating war dead from the Civil War....7. Memorial Day started honoring all veterans after World War I - Decoration Day, or Memorial Day, was begun to honor those who died during the Civil War. But once the United States entered World War I, the holiday was broadened to commemorate American soldiers who died in all wars." Read the full list...
House Passes Bill Making Big Changes to U.S. Retirement System -Wall Street Journal
"Americans could see the most significant changes in more than a decade to their retirement plans under legislation the House of Representatives passed Thursday, with measures designed to make it easier for employers to offer 401(k)-type accounts and for participants to convert their balances into a steady lifetime income....The House bill, passed by an overwhelming House majority and expected to be taken up by the Senate before it heads to President Trump's desk, would encourage 401(k)-type plans to offer annuities, a type of insurance contract that guarantees a monthly income stream as long as a retiree lives. It also would repeal the age cap for contributing to traditional individual retirement accounts, currently 70½, and would increase the age at which savers must start taking withdrawals from 401(k)s and IRAs to 72 from 70 1/2. Joe DeBello, a financial adviser in Orlando, Fla., who consults businesses on retirement plans, said his clients are excited about the lifetime-income provision of the bill. While 401(k)s are good for accumulating money to live on during retirement, he said, when people retire they don't always have much guidance about spending and run the risk of outliving their savings....The House bill, known as the Setting Every Community Up for Retirement Enhancement, or Secure Act, passed with a vote of 417-3. Senators have signaled they are keen to quickly take up the legislation, and Mr. Trump isn't expected to oppose it."
Living from the Inside Out -Palmer/Primelifers.org
"Bestselling author, teacher and activist, Parker J. Palmer offers six inspiring life lessons at his commencement address to Naropa University in Boulder, Colorado from his latest book, ON the BRINK OF EVERYTHING. 'My first suggestion is simple: be reckless when it comes to affairs of the heart...offer yourself to the world...with openhearted generosity...cultivate a beginner's mind. Second, as you integrate ignorance and failure into your knowledge and success...take everything that's bright and beautiful in you and introduce it to your shadow side...if you choose to live an unexamined life, I beg you: do not take a job that involves other people. Third, as you welcome whatever you find alien within yourself, extend the same welcome to whatever you find in the outer world...practice hospitality to the stranger. Fourth, take on big jobs worth doing, like the spread of love, peace and justice...refuse to be seduced by our cultural obsession with being effective as measured by short-term results...long to be treasured, not measured. Fifth, since suffering as well as joy comes with being human, I urge you to remember this: violence is what happens when we don't know what to do with our suffering...The good news that suffering can be transformed...exercise your heart by taking in life's pains and joys...it will make your heart supple...with a greater capacity for love. Finally, I quote Saint Benedict, who said, 'Daily keep your death before your eyes.'...If an unexamined life is not worth living, it's equally true that the unlived life is not worth examining." Read the full book review...
5.23.19 - Stable Money Leads To Prosperity
Gold last traded at $1,285 an ounce. Silver at $14.62 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Thursday on safe-haven buying and a weaker dollar. U.S. stocks fell sharply as U.S.-China trade worries persisted with more companies suspending business with Chinese telecom giant Huawei.
"Sea Of Red": S&P Futures, Bond Yields Tumble As All Out Trade War Becomes "Base Case" -Zero Hedge
"Yesterday's modest selloff has become an all-out rout, dragging world stocks lower for 4 of the past 5 days, with US equity futures tumbling and global markets a 'sea of red' as fears grow that the China-U.S. trade conflict is fast turning into a 'technology cold war' and as Wall Street's denial is finally shifting to acceptance that a lengthy, all-out trade war is now inevitable, and the only way out and for someone to concede is for markets to plunge. Sure enough, that's what they are doing this morning. 'It's tin hats on and battening down the hatches for a fair bit of volatility for the next few months,' said Tony Cousins, Chief Executive of Pyrford International, the global equities arm of BMO Global Asset Management. 'We are as defensively positioned as we could be,' he said, adding it was impossible to predict what steps Trump was likely to take next in the trade war with China. Analysts at Nomura warned in a note that 'without a clear way forward during an intensifying 2020 U.S. presidential election, we see a rising risk that tariffs will remain in effect through end 2020.'....Goldman Sachs, Nomura and JPMorgan Chase 'are among those that have rewritten their forecasts as U.S. President Donald Trump threatens to impose a 25% tariffs on around $300 billion of additional Chinese imports.'"
The Problem With Capitalism? We Don’t Have Enough of It. -Institutional Investor
"The economic engine we have in place today has for decades produced virtually no increase in wealth for the majority of earners. According to information pulled from the Federal Reserve, the median net worth of the bottom three quintiles of families declined in inflation-adjusted dollars from 1998 until 2013, tumbling by 20 percent or more. This decrease has hit working-class families the hardest; their real net worth has been halved over this time. On the other hand, the inflation-adjusted wealth of the top 10 percent of earners has spiked dramatically in that same period, rising 75 percent cumulatively. Such a trend is not sustainable, and it is symptomatic of an unhealthy economic system; on that we are all in agreement...Rather than being the result of runaway capitalism, these problems, I believe, have been caused by its disappearance. We don't have too much capitalism; rather, we have far too little....Capitalism is freedom. At its core it simply means that individuals should have equal rights to own capital and capital goods, and to manage those economic resources or dispose of them however they see fit, in accordance with their own personal well-being....The reality that going from ten businesses controlling 40 percent of an industry to three firms controlling 80 percent is not more capitalism, it's less....Perhaps it's time the government got back to its job of protecting capitalism and the ability of individuals to control their own means of production with a bit more vigor - in two ways. First, by breaking up businesses, and groups of businesses, that have turned industries into oligopolies with noncompetitive market share dynamics....Second, it's critical for the government to normalize the legal rights of individuals to, at the very least, give them equal status with the current preferred neofeudal empire, the corporation....Let's stop blaming our problems on capitalism...you can't fix a problem that is misdiagnosed."
Gold firms as equities sink -Reuters
"Gold prices firmed on Thursday, supported by a slide in equity markets amid fresh trade tensions... 'We have the higher dollar and lower Chinese yuan pressuring gold. At the same time, yields are a bit lower and equity markets are down (supporting gold),' said ABN AMRO analyst Georgette Boele....World shares were in the red as concerns grew that the China-U.S. trade conflict was fast turning into a technology cold war between the world's two largest economies. The White House is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision....Meanwhile, U.S. Federal Reserve officials at their last meeting agreed that their current patient approach to setting monetary policy could remain in place 'for some time,' a further sign policymakers see little need to adjust rates."
How Stable Money Leads To Prosperity -Stossel/Reason
"What makes money trustworthy? 'It has to be fixed in value,' says Steve Forbes in his new documentary, 'In Money We Trust?' Forbes notes that money has to be reliable, like a clock. We have 'sixty minutes in an hour; sixty seconds in a minute. Imagine if that floated each day; that would make life chaotic.' Stossel presents an abbreviated version of the documentary, which notes that throughout history, people needed a way to assign a fixed value to money. They tried all sorts of things, including backing money with crops, silver, and salt. 'Salt' is where our word 'SALary' comes from. Eventually, most people settled on gold, which was used up through the mid-1900s to back currency. The stability it brought to markets helped enable massive economic growth....Today, the Federal Reserve controls the supply of dollars. People use them because they trust that others will value them, and because the government says it stands behind them. But dollars are not backed by gold, or anything else. That worries people like Steve Forbes. A dollar buys 80 percent less than it did when Nixon took the country off gold in 1971. That's largely because the Federal Reserve intentionally creates 2 percent inflation every year - they set it at 2 percent rather zero because it provides a buffer against deflation, which they fear will cause recessions."
Forbes' documentary backs a return to the gold standard....You can see the full documentary on some PBS stations, or stream it at: InMoneyWeTrust.org
5.22.19 - How America Goes Full-Venezuela
Gold last traded at $1,274 an ounce. Silver at $14.44 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a flat dollar. U.S. stocks traded lower as trade worries increased while declines in Qualcomm and retailer shares also dampened market sentiment.
'Unusual uncertainty' puts stocks in red zone -CNBC
"QMA's chief investment strategist has significantly pulled back the firm's risk exposure during the past few weeks due to the escalating U.S.-China trade war. Ed Keon, who runs more than $50 billion in multi-asset portfolios for QMA, says stocks are in a danger zone because it's becoming increasingly unclear whether a resolution on tariffs is coming....'The risk is significantly higher if you go to a full-blown trade war with tit-for-tat retaliation,' said Keon. He said that scenario could push the market back into correction territory."
How America Goes Full-Venezuela -Bonner/Bonner And Partners
"In the last five years, Venezuela's GDP has fallen by nearly two-thirds. Inflation is running over 10,000,000%. And today's Financial Times tells us that 'Venezuelans queue up for petrol, despite sitting on huge oil reserves.' Motorists are waiting in line for up to 20 hours to fill their tanks. Venezuelans are living… or dying… through the most hellish economic catastrophe of the 21st century. But the century has 81 more years to go. Our guess is that there are bigger disasters ahead. There is nothing particularly novel about the Venezuelan debacle. It's the kind of thing you can get when you mix bad politics with bad money....As far as we know, no disaster of this sort has ever occurred without fake money being involved...You can have bad food, bad public policies, bad breath, and even bad weather. But if you want a real financial catastrophe - France 1790-1797, Weimar Germany, Argentina, Brazil, Zimbabwe - you need fake money....Not only has fake money been an essential part of every financial disaster, it always leads to some sort of societal disaster, too. Which is why we suspect a bigger disaster is coming later in the century… and why we suspect it will be centered in the Fake Money Capital of the World - the USA...Fake money is as old as the hills. But it usually only takes a few years before the fakeness of it is exposed… the financial system blows up… and real money is brought back."
The Boycott Begins: Chinese Company Orders Employees To "Stop Using American Products" -Zero Hedge
"In a harbinger of what's to come as the US-China trade war gets worse by the day, a Chinese company has told all of its employees to boycott American products and halt international travels to the U.S., reported The Epoch Times. Jinggang Motor Vehicle Inspection Station notified all employees last Thursday, May 16 that the use of iPhones, driving in American automobiles, eating at American fast food restaurants, using American household products, and even traveling to the U.S. was forbidden by a new company policy; any employee who violated the new rules would be fired. As a result of a prolonged trade war with the U.S., the company said: 'To help our country win this war, company authorities have decided that all employees must immediately stop purchasing and using American products.'....The ban against Huawei comes days after the Trump administration increased tariffs to 25% on $200 billion of Chinese products. In a tit-for-tat effort, China slapped a 25% tariff on $60 billion worth of American products that go into effect June 1....All last week, anti-American propaganda flourished across the country, with the slogan 'Wanna talk? Let's talk. Wanna fight? Let's do it. Wanna bully us? Dream on!' going viral on Chinese social media."
‘Unfreedom of the Press’ lays bare the true nature of the media -Conservative Review
"The mainstream media claim to be neutral arbiters of 'the truth.' In reality they are the de facto propaganda wing of the Democratic Party. In his latest book, 'Unfreedom of the Press,' LevinTV host Mark Levin rips off the mask and lays bare the true nature of the media....The press has always been biased. Levin takes the reader back through American history, showing the path from the open press biases during our Founding to the modern, laughable, insistence that bias does not exist. From the Founding through today, the press has taken sides and advocated for them. The difference is that today, the media are determined to hide under the false patina of impartiality, neutrality, and so-called truth. The turning point, as Levin shows through comprehensive sourcing, was the Progressive Era. The prevailing wisdom of that time was that the 'scientific' method could be applied to all things...it was determined that the media should be neutral observers and apply the scientific method to journalism. The myth of the objective newsman was born....After laying the groundwork exposing how the press arrived at its current state, Levin closes with a look at the media's treatment of President Trump and their attempt to work the nation into a frenzy...In the media's collective mind, Trump is also the greatest threat to press freedom in the nation's history. Levin shows that is pure hogwash."
5.21.19 - 40% in US Embrace a Form of Socialism
Gold last traded at $1,273 an ounce. Silver at $14.41 an ounce
NEWS SUMMARY: Precious metal prices eased Tuesday on a firmer dollar. U.S. stocks rose following news that the U.S. temporarily eased restrictions on Chinese telecom giant Huawei.
Without China "Fraud", Gold Prices Would Be Soaring -Holmes/Kitco
"Gold prices are being manipulated on Chinese markets, said Frank Holmes, chief investment officer and CEO at U.S. Global Investors. The market manipulation, or spoofing, occurs during Chinese holidays when trading is thin, according to Holmes. He explained a large number of contracts will be 'flashed' on the markets with the intent to sell. 'Immediately the market becomes fearful there is a big seller,' said Holmes. '[Traders] start hitting all their bids, and the price of gold cascades down. It's fraud. It's mis-communication,' he said. Holmes explained that gold is being suppressed because officials want to keep gold at a price that is low in relation to the country's currency. He added that the Chinese market is especially important to observe for traders and investors now that the global hub of gold trading has shifted from London to China....China is not the only sour point in the price manipulation of gold, Holmes said, as the Bank of International Settlements (BIS) has also suppressed the yellow metal with its policies, this according to his findings....According to Holmes, the BIS has 60 central banks in the world clearing through them, and it is in their interest to not have competition from alternative currencies like gold and bitcoin."
China is preparing for protracted trade war -South China Morning Post
"Chinese President Xi Jinping has called for the nation to embark on a new Long March and 'start all over again', in the most dramatic sign to date that Beijing has given up hope of reaching a trade deal with the United States in the near term. 'We are here at the starting point of the Long March to remember the time when the Red Army began its journey,' Xi told cheering crowds on Monday...'We are now embarking on a new Long March, and we must start all over again.' While Xi did not directly mention the trade war or the United States, his remarks are being perceived as clear signals that the Chinese public is being told to prepare for hardships because of the worsening external environment The economy is already slowing and the trade war could trim as much as 1 per cent from its gross domestic product, Wang Yang, of the elite Politburo Standing Committee of the Communist Party of China, said last week....The Long March was a military retreat between 1934 to 1936 undertaken by the Red Army, the forerunner of the People's Liberation Army, to evade Kuomintang troops during the Chinese civil war. A long article by the official Xinhua News Agency on Monday claimed that 'bullying by the US side' was the cause of the failed trade talks....China warned last Friday that there was no point in holding more talks if the US was not 'sincere' in wanting to achieve a fair outcome. 'The message is clear: China is ready to fight a protracted trade war,' said one source."
Four in 10 Americans Embrace Some Form of Socialism -Gallup
"Americans today are more closely divided than they were earlier in the last century when asked whether some form of socialism would be a good or bad thing for the country. While 51% of U.S. adults say socialism would be a bad thing for the country, 43% believe it would be a good thing. Those results contrast with a 1942 Roper/Fortune survey that found 40% describing socialism as a bad thing, 25% a good thing and 34% not having an opinion....A majority of Democrats have said they view socialism positively in Gallup polling since 2010, including 57% in the most recent measure in 2018....In the same April survey, Gallup asked Americans whether they would prefer mostly free market or government control over several economic and societal activities. Americans are most likely to prefer free market control in the areas of technological innovation and the distribution of wealth. Majorities also want the free market to drive the economy overall, wages, higher education and healthcare. Notably, more Americans favor free market than government control over healthcare and higher education...But at least four in 10 Americans appear sympathetic to policies that would increase the government's role in those areas."
The Big Story You Don't Read About -Brooks/New York Times
"My colleague David Bornstein points out that a lot of American journalism is based on a mistaken theory of change. That theory is: The world will get better when we show where things have gone wrong...Bornstein, who writes for The Times and also co-founded the Solutions Journalism Network, says that you've got to expose problems, but you've also got to describe how the problems are being tackled. The search for solutions is more exciting than the problems themselves. I’ve spent the past year around people who weave social fabric, and this week about 275 community weavers gathered in Washington, for a conference called #WeaveThePeople, organized by the Aspen Institute....At most conferences people lead with their bios, but at this gathering people led with their pain. A prominent researcher described how she was abused as a child, and how this led her into her research into children's emotional development. A woman from South Carolina talked about loved ones she had lost and the time she tried to talk a man out of jumping off a bridge, finally confessing: If you jump, I’m going to jump, too...The weavers know how to open relationships with vulnerability and they know how to build connections and move to action. Their defining feature is that they are geniuses at relationship....'Relationship moves at the speed of trust. Social change moves at the speed of relationship.' 'Neighbors are people we practice doing life with.' 'We’re trying to do something that has never been done before....Alexis de Tocqueville pointed out that associational life is the central feature of American life. But somehow we in the media under-cover this sector. We barely cover the most important social change agents."
5.20.19 - What if Green Energy Isn’t the Future?
Gold last traded at $1,277 an ounce. Silver at $14.44 an ounce
NEWS SUMMARY: Precious metal prices traded steady Monday on a weaker dollar. U.S. stocks fell as the intensifying fallout from a U.S. crackdown on the Chinese telcom giant Huawei pressured the technology sector.
Why Now Is The Time To Buy Gold -Seeking Alpha
"Ray Dalio once said, 'If you don't own gold, you know neither history nor economics.'....This is the crux of Dalio's statement. Paper currency regimes, with no mechanism to regulate increases in the money supply, have an inflationary tendency...While paper currencies lose value over time, gold has served as a store of value for over 5,000 years....A study conducted by Flexible Plan Investments determined the optimal allocation of gold to a portfolio. It determined that a 20% allocation to gold, with 48% in equities, and 32% in treasuries provided the highest Sharpe (risk-to-reward) ratio....Saddled with rising debt and a wave of retiring baby boomers, there's a chance that the U.S. remains stuck in a Japan-like deflationary spiral...With demographic trends skewing the numbers...I would reduce the optimal allocation of gold from 20% to 10%....With corporate debt at record highs and 50% of corporate credit ratings one level above junk, I believe over-levered corporations, not necessarily banks, will be at risk of defaulting when corporate profits drop in the next recession....In conclusion, gold may chronically underperform if the Fed implements the same monetary policy as Japan. However, if current MMT rumblings come to fruition, gold will skyrocket while other asset classes lag."
Levin's 'Unfreedom of the Press' Is the Right Book at the Right Time -Shirley/Newsmax
"When the Framers met in Philadelphia to craft the Constitution, they wrestled long and hard over the First Amendment, which contains mostly personal rights such as speech, freedom to worship, petition the government, and the less understood right of assembly....All presidents were savaged at one time or another by the ink stained wretches of the national press as the role of the newspapers was working, just as the Framers had planned. This all changed with the election of Barack Obama and for the first time in our nation's history, the national media sided with the national government, against the American people....Enter Mark Levin and his new, important book, 'Unfreedom of the Press.'....From the very first pages, Levin identifies the problem with the current state of the Fourth Estate: 'Unlike the early patriot press, today's newsrooms and journalists are mostly hostile to America's founding principles, traditions, and institutions. Issues, events, groups, and individuals that do not fit the narrative are dismissed or diminished; those that do fit the narrative are elevated and celebrated.' Bingo. Further, Levin cites chapter and verse how the dominant liberal media 'squelches' speech rather than celebrating the diversity of thought....Levin’s book is not a polemic, but rather written in the rational, but also folksy style of a smart prosecutor. Think Spencer Tracy in 'Inherit the Wind.'...Levin’s book comes along in the right place, at the right time."
Mark Levin's new book is vital reading for all freedom-loving Americans. To discover why, watch last night's Life, Liberty & Levin program on Fox News. Mark devotes the entire show to giving viewers an overview of the book - which will help explain why it's currently at the #1 spot on the New York Times Bestseller list a day ahead of its release. The irony is that Levin devotes an entire chapter to lamenting the relentless decline of unbiased journalism at the New York Times.
China's new 'social credit system' is an Orwellian nightmare -Mosher/New York Post
"Imagine calling a friend. Only instead of hearing a ring tone you hear a police siren, and then a voice intoning, 'Be careful in your dealings with this person.' Would that put a damper on your relationship? It's supposed to. Welcome to life in China's 'Social Credit System,' where a low score can ruin your life in more ways than one....The government algorithm will go as far as to install an 'embarrassing' ring tone on the phones, shaming them every time they get a call in public. But an embarrassing ring tone, flight bans and slow trains are just the beginning of the dystopian nightmare that is now daily life in China for tens of millions of people. A low social credit score will exclude you from well-paid jobs, make it impossible for you to get a house or a car loan or even book a hotel room....The government claims that its purpose is to enhance trust and social stability by creating a 'culture of sincerity' that will 'restore social trust.' What it will actually create, of course, is a culture of fear and a nation of informants. This is because one of the ways that people can improve their own social credit score is to report on the supposed misdeeds of others. Individuals can earn points, for example, for reporting those who violate the new restrictions on religious practice, such as Christians who illegally meet to pray in private homes, or the Muslim Uyghurs and Kazakhs in China's far west whom they spot praying in public, fasting during Ramadan or just growing a beard. Of course, as the state progresses ever closer toward its goal of monitoring all of the activities of its citizens 24 hours a day, seven days a week, society itself becomes a virtual prison....It is China's ancient totalitarian impulse - the absolute rule of the god-emperor over his subjects - brought into the modern age. It is George Orwell's prophetic '1984' come alive...The Chinese Communist Party has given birth to the world's first high-tech digital dictatorship."
What if Green Energy Isn’t the Future? -Wall Street Journal
"There's a reason Warren Buffett decided to bet $10 billion on the future of oil and natural gas...A week doesn't pass without a mayor, governor or policy maker joining the headlong rush to pledge or demand a green energy future. Some 100 U.S. cities have made such promises. Hydrocarbons may be the source of 80% of America's and the world's energy, but to say they are currently out of favor is a dramatic understatement...The prevailing wisdom has wind and solar, paired with batteries, adding 250% more energy to the world over the next two decades than American shale has added over the past 15 years. Is that realistic?...Even bullish green scenarios still see global demand for oil and gas rising, if more slowly. If the favored alternatives fall short of delivering what growing economies need, will markets tolerate energy starvation? Not likely. Nations everywhere will necessarily turn to hydrocarbons. Green forecasters are likely out over their skis. All the predictions assume that emerging economies - the least wealthy nations - will account for more nearly three-fourths of total new spending on renewables. That won't happen unless the promised radical cost reductions occur...The reason? Using wind, solar and batteries as the primary sources of a nation's energy supply remains far too expensive....A common response to all of the above: Make more electric cars. But mere arithmetic reveals that even the optimists' 100-fold growth in electric vehicles wouldn't displace more than 5% of global oil demand in two decades."
5.17.19 - Half of Americans One Paycheck From Disaster
Gold last traded at $1,275 an ounce. Silver at $14.38 an ounce.
NEWS SUMMARY: Precious metal prices eased back Friday on profit-taking and a firmer dollar. U.S. stocks traded lower on rising U.S.-China trade worries despite upbeat U.S. consumer sentiment data.
Global Markets, Yuan Tumble As China Crushes Trade Hopes -Zero Hedge
"World markets suffered a fresh bout of risk aversion on Friday after China doused hopes for a quick deal when its state media signaled a lack of interest in resuming trade talks with the U.S. under the current threat to escalate tariffs, while the government said stimulus will be stepped up to buttress the domestic economy. Asian stocks erased most gains for the day with the MSCI index of Asia-Pacific shares outside Japan sliding to 15-week lows and down 2.6% for the week at the end of trading...China's Shanghai Composite Index fell 2.5% after a front page commentary in the Communist Party's People's Daily evoked the patriotic spirit of past wars, saying the trade war would never bring China down. 'The China state media commentaries fueled concerns that the U.S.-China trade disputes will prolong, deterring risk-taking,' said Koji Fukaya, CEO of Japan's FPG Securities. 'This issue will probably be one of the major market drivers for a while as U.S.-China trade war influences global economic conditions.'"
A Recession Indicator No One Is Talking About - and It's Flashing Red -Mauldin Economics
"The yield curve isn't the only sign recession is coming. Rising corporate misconduct says the same. Business scandals seem to peak at the end of every growth cycle. I think that’s because CEOs are human, and humans get overconfident when everything is going well. Allegations of negligence and/or misconduct at public companies now seem to be growing again....Why anyone would own shares in such companies, I don't know. For many, it's probably because they only care about a rising stock price. And they've been getting it. But if the stock is rising not because the business is well-run but because it is borrowing money to buy back its own shares, the gains won't last....With creative destruction now scarce, as zombie companies refuse to die and monopolies refuse to improve, we also struggle to generate even mild economic growth. I think those facts are connected. And that makes corporate corruption and incompetence a problem for everyone...Such conditions haven't ended well in the past."
U.S. Consumer Sentiment Hits Highest Level in 15 Years -Wall Street Journal
"U.S. household sentiment rose starkly at the beginning of May to its highest level in a decade and a half, driven by a brighter economic outlook...The survey's underlying gauge of future expectations increased to the highest level since 2004, driving most of the month's overall sentiment rise. 'That consumers view prospects for the economy both near and long term at the highest levels since 2004 coincides with more economists pushing out forecasts for the start of the next recession from 2020 to 2021,' said Robert Frick, economist at Navy Federal Credit Union....Richard Curtin, the survey's chief economist, pointed out that the index growth was recorded largely before the U.S.-China trade negotiations collapsed. He said negative references to tariffs rose in the past week and thinks they 'are likely to rise further in late May and June.'"
Half of Americans are just one paycheck away from financial disaster -Marketwatch
"Missing more than one paycheck is a one-way ticket to financial hardship for nearly half of the country's workforce. A new study from NORC at the University of Chicago, an independent social research institution, found that 51% of working adults in the United States would need to access savings to cover necessities if they missed more than one paycheck....The findings were based on a survey of more than 1,000 adults. The researchers interviewed a nationally representative panel designed to be indicative of the U.S. population. The survey provides a sobering look at Americans' precarious finances even as the economy is improving...'Even short disruptions in pay can cause significant hardship, as most Americans appear to be living paycheck-to-paycheck,' Angela Fontes, director of the Behavioral and Economic Analysis and Decision-Making (BEAD) program at NORC at the University of Chicago, said in the report."
5.16.19 - America's Illusions of Growth
Gold last traded at $1,286 an ounce. Silver at $14.53 an ounce.
NEWS SUMMARY: Precious metal prices eased back Thursday on profit-taking and a firmer dollar. U.S. stocks rose as investors focused on strong earnings from Walmart and Cisco Systems rather than growing trade-war fears.
America's Illusions of Growth -Project Syndicate
"National politics in the United States has become enslaved to macroeconomic indicators that have little bearing on true wellbeing. For many commentators, the snapshot growth rate of 3.2% for the first quarter of 2019, coupled with a decline in the unemployment rate to 3.6% in April, implies that President Trump's economic policies have been vindicated...But this interpretation overlooks what these indicators fail to measure. And what they fail to measure happens to be what really counts for the public....Macroeconomic indicators hide much about the quality of life. For example, even while the US economy has expanded during recent years, America's public health crisis has continued to mount. The US has experienced two consecutive years of declining life expectancy, in 2016 and 2017 – the longest consecutive decline since World War I and the subsequent flu epidemic. Yet the current decline is caused by despair, not by illness. Suicide rates and opioid overdoses are soaring. Another alarming epidemic not captured by GDP or unemployment rates is the sharp rise in anxiety among Americans....It's time that economists, pundits, and politicians start looking holistically at life in our times, and take seriously the long-term structural changes needed to address the multiple crises of health care, despair, inequality, and stress in the US and many other countries."
Atlanta Fed forecast for GDP growth sliding, rate cut chances surging -CNBC
"A Federal Reserve projection on economic growth just weakened substantially, and expectations for a rate cut over the next eight months got a lot stronger. The Atlanta Fed's closely watched GDPNow tracker is pointing to a 1.1% gain for the economy in the second quarter, according to a revision posted Wednesday. Disappointing retail sales in April fueled the latest leg down in the Atlanta Fed outlook. The Commerce Department reported Wednesday that sales declined 0.2% for the month against expectations of a 0.2% gain. Along with the retail letdown, industrial production fell 0.5% against Wall Street estimates of a 0.1% gain. The drop in the GDP forecast coincided with market expectations that the Fed will be lowering interest rates in the months ahead."
Gold steadies as trade optimism dims on Huawei sanctions -Reuters
"Gold steadied on Thursday, consolidating in a tight range below the key $1,300 pivot, as Washington slapped sanctions on Chinese telecoms giant Huawei, souring optimism for a thaw in U.S-China trade tensions. 'There are still a lot of underlying tensions (surrounding U.S.-China trade relations) so that might be supportive for gold,' said John Sharma, economist at National Australia Bank....Asian equities slipped after the United States hit Huawei with severe sanctions, threatening to further strain trade ties, and erasing limited gains triggered by news that U.S. President Donald Trump planned to delay implementing tariffs on auto imports....Escalations in trade tensions or economic uncertainty would make a case for gold, which is considered a safe-haven asset."
We’re Stumbling Into a Surveillance State -New York Times
"Cameras are the defining technological advance of our age. They are the keys to our smartphones, the eyes of tomorrow’s autonomous drones and the FOMO engines that drive Facebook, Instagram, TikTok, Snapchat and Pornhub...And cameras aren't done. They keep getting cheaper and - in ways both amazing and alarming - they are getting smarter. Advances in computer vision are giving machines the ability to distinguish and track faces, to make guesses about people's behaviors and intentions, and to comprehend and navigate threats in the physical environment. In China, smart cameras sit at the foundation of an all-encompassing surveillance totalitarianism unprecedented in human history. That's why I worry that we're stumbling dumbly into a surveillance state. And it's why I think the only reasonable thing to do about smart cameras now is to put a stop to them. This week, San Francisco's board of supervisors voted to ban the use of facial-recognition technology by the city's police and other agencies. Oakland and Berkeley are also considering bans, as is the city of Somerville, Mass. I'm hoping for a cascade. States, cities and the federal government should impose an immediate moratorium on facial recognition, especially its use by law-enforcement agencies....Georgetown Law's Center on Privacy & Technology...uncovered municipal contracts indicating that law enforcement agencies in Chicago, Detroit and several other cities are moving quickly, and with little public notice, to install Chinese-style 'real time' facial recognition systems.....It has chilling implications for speech and assembly protected by the First Amendment; it means that the police can watch who participates in protests against the police and keep tabs on them afterward....None of this is to say that facial recognition should be banned forever. The technology may have some legitimate uses. But it also poses profound legal and ethical quandaries."
5.15.19 - "Megapolitics" Destroy Wealth
Gold last traded at $1,297 an ounce. Silver at $14.81 an ounce.
NEWS SUMMARY: Precious metal prices held near 1-week highs Wednesday on rising geopolitical uncertainty. U.S. stocks rose on news that President Donald Trump plans to delay the implementation of auto tariffs.
Fears of war with Iran as US orders staff out of Iraq immediately -Metro
"The US embassy in Iraq said the state department has ordered all non-essential, non-emergency government staff to leave the country right away amid escalating tensions with Iran. The alert, published on the embassy's website, comes after Washington last week said it had detected new and urgent threats from Iran and its proxy forces in the region targeting Americans and American interests. On Sunday, the embassy advised Americans to avoid travel to Iraq, citing 'heightened tensions'. The state department said 'normal visa services at both posts will be temporarily suspended. The U.S. government has limited ability to provide emergency services to U.S. citizens in Iraq.'....US security officials have been picking up intelligence that Iran is threatening American interests in the Middle East. On Tuesday, Spain temporarily pulled one of its frigates from the US-led combat fleet heading towards the Strait of Hormuz....Last week, US officials said they had detected signs of Iranian preparations for potential attacks on American forces and interests in the Middle East, but Washington has not spelled out that threat. The US has about 5,000 troops in Iraq and about 2,000 in Syria as part of the coalition campaign to defeat the Islamic State group there."
Gold And Silver May Be Setting Up For A Big Move -Seeking Alpha
"The price of gold soared over $13 Monday as flight-to-safety money flowed into the precious metals sector while the stock market went into a downward spiral. I see Monday's market action as a preview of what's in store going forward as price discovery once again engulfs the stock market and causes the most extreme stock bubble in U.S. history to deflate. Despite the fact that it seems to be taking forever for gold and silver to enter into a prolonged move higher, the chart below should offer encouragement. Gold, silver and mining stocks are deeply oversold technically. It's obvious that the western Central Banks are throwing everything they can at the gold price via the paper derivative gold markets in London and NYC in an attempt to prevent a massive move higher. The data for gold and silver futures on the Comex show that the banks are working hard to stunt any rally by unloading loads of paper gold on the market. This effort is rewarding the large physical gold importing countries in the east....At some point, the Fed is going to be forced by the market to cut the Fed Funds rate...Despite the 600 pt sell-off in the Dow on Monday, complacency persists, along with an expectation that the Fed will continue to support wanton speculation in the stock market...At some point, the Fed and its western Central Bank collaborators, led by the BIS, will also lose control of the gold price."
Senior Admin Official: "A Trade Deal Isn't Close; US Could Be In For A Long Trade War" -Zero Hedge
"According to Axios, senior administration officials told senior White House reporter Jonathan Swan that a trade deal with China 'isn't close' and that the US 'could be in for a long trade war.' Swans' sources said the differences between the two sides 'are so profound that, based on his read of the situation, he can't see the fight getting resolved before the end of the year.' That's a much longer timeline than the three-four weeks Trump touted Monday night, who touted the possibility that the a meeting with President Xi at the G-20 in Japan next month could yield an agreement. The White House is already moving ahead with plans to slap tariffs of up to 25% on the remaining - $300 billion in Chinese imports that aren't already subject to trade-war related tariffs....Trump is also convinced that China will suffer more than the US, since Americans buy more Chinese products than the other way around, but over the weekend, Larry Kudlow said both sides will suffer."
How "Megapolitics" Destroy Wealth -Bonner/Bonner And Partners
"One of the most cherished lessons humans ever learned is that wars are dangerous, destructive, and rarely profitable. The war-makers are wealth (and happiness) destroyers; they need to be kept on a leash. That was the central insight of conservatism for generations: The feds may be useful servants, but they are bad masters. They have the brute force to take away life, liberty, and property. And they’ll do it, if you let them....Because there are forces at work that go beyond our control… our election-day choices, our editorial-page fantasies, and the borders of our own minds. Our old friends Lord William Rees-Mogg (now deceased) and Jim Davidson (still very much alive) called these forces 'megapolitics.' Sometimes, megapolitics lead us towards peace and prosperity. And sometimes, they don’t. And now? The war-mongers’ stock is rising. The feds are becoming bolder, more aggressive....A few years ago, hardly anyone would have thought that we should let the feds control our commerce. If Americans wanted to buy gadgets and gizmos from the Chinese, well, that was their business....What’s going on? Why give up on freedom? Why let the feds tell us what to do? As we explain in our new book, Win-Win or Lose, material progress depends on win-win deals. And win-win deals also provide a rich soil in which the other elements of civilized life can take root. In a win-win deal, threats, bombs, and sanctions have no place. You need to think about the other guy....And thus - as if guided by an invisible hand - civilization advances."
5.14.19 - Investors Seek Safe Harbors in the Storm
Gold last traded at $1,296 an ounce. Silver at $14.81 an ounce.
NEWS SUMMARY: Precious metal prices steadied Tuesday on mild profit-taking and a firmer dollar. U.S. stocks regained some of the ground lost following yesterday's steep sell-off, as investors digested the escalating trade war between the U.S. and China.
Gold steadies near 1-month peak as trade woes lift safe-haven demand -Reuters
"Gold prices held near one-month highs on Tuesday as an escalation in the Sino-U.S. trade dispute sent investors looking for safe-haven assets. Asian shares extended losses on Tuesday, following sharp overnight declines in Wall Street, after Beijing on Monday announced retaliatory tariff-hike to counter Washington. 'People are looking to find a safe harbor in the storm while they wait for the dust to settle,' said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA....In addition to more tariffs, traders are concerned that China, the largest foreign U.S. creditor, may dump treasuries to counter the Trump administration's hardening trade stance. Besides trade worries, gold investors were also keeping a tab on escalating tensions between the United States and Iran after Saudi Arabia said on Monday that two of its oil tankers were among those attacked off the coast of the United Arab Emirates."
'I don't trust this market at all' because it's so dependent on Trump tweets -Cramer/CNBC
"CNBC's Jim Cramer voiced concern about the staying power of the stock market's bounce Tuesday morning following President Donald Trump's latest tweetstorm on China trade and Monday’s sharp decline. 'I don't trust this market at all,' warned Cramer on 'Squawk on the Street' as stock futures indicated a higher Wall Street open, which came to pass. '[Trump] has made it so we got to wait to be able to buy.' Cramer said he was troubled by Trump's barrage of tweets, calling them 'a little erratic this morning' and a bit confusing. 'He's really disturbing the zeitgeist of the stock market,' Cramer said. 'He should knock the tweets off if he wants the Dow to start going up'.... In light of the uncertainty around Trump's Tuesday tweets, Cramer advised investors to let things shake out, saying there may be a buying opportunity in stocks later."
How to enforce ethics on unethical lawmakers -Ponte/WND
"The Democrats failed to destroy Donald Trump with smears...and endless unproven accusations from the leftist media. Instead of quitting, Democrats have turned to an endless Inquisition of Stalinist show trials to be held before not one, not two, but SIX committees...In the center ring of this circus at the moment is New York Congressman Jerrold Nadler, who for many years waged personal vendettas against Trump. Nadler is the new chairman of the House Judiciary Committee and has issued demands for endless documentation touching on President Trump from 81 different individuals and entities....Nadler's Judiciary Committee, however, reportedly has 22 Democrats to only 12 Republicans, giving Democrats a rigged 65 percent committee majority...Televising lawmaker interrogation before such a committee would therefore present a fake impression that Congress is overwhelmingly against the Trump Administration. Democrats have at least two reasons for this unethical tactic. One is that the Attorney General is vastly experienced, articulate, has a sterling reputation and is at least 20 IQ points smarter than any Democrat on the Committee...Honest Republicans should assign a Senate committee to do tit-for-tat to Democrats whatever is done in the House to Republicans. Subpoenas should demand that Pelosi, Hillary Clinton, and all Democratic chairmen surrender 20 years of tax and other records...Sauce for the populist goose is sauce for the leftist gander."
If the sell-off is just starting, here's where to hide out -CNBC
"With the stock market roiling over new barbs between Washington and Beijing, investors are scrambling to figure out where to put money in times of volatility. History shows gold and bonds outperform when fear spreads on Wall Street....The volatility index or 'VIX' is considered one of the market's best fear gauges...The index traded up to 21 on Monday, up from lows under 13 on May 3....'Volatility surged to multi-month highs last week as US-China trade war drama unexpectedly escalated,' Tom Essaye, founder of The Sevens Report, wrote in a note. 'The lack of trade agreement does put a headwind on global growth, so I would re-view portfolios and make sure they are insulated from volatility and that would mean rotating out of cyclical sectors and into more defensive sectors.'....A rise in gold often accompanies market pessimism as investors favor metals and the security of government debt for their reliable returns when turbulence rattles the fragile equity markets."
5.13.19 - Dems' New Plan to Ban Private Medicine
Gold last traded at $1,287 an ounce. Silver at $14.79 an ounce.
NEWS SUMMARY: Precious metal prices shot higher Monday on rising fears of a China trade war. U.S. stocks fell sharply after China decided to raise retaliatory tariffs on some U.S. goods.
Markets Tumble As China Unveils Retaliatory Tariffs, May Dump "Some Treasuries" -Zero Hedge
"After vowing over the weekend to 'never surrender to external pressure', Beijing has defied President Trump's demands that it not resort to retaliatory tariffs and announced plans to slap new levies on $60 billion in US goods effective June 1st. China's announcement comes after the White House raised tariffs on some $200 billion in Chinese goods to 25% from 10% on Friday...In further bad news for American farmers, China might stop purchasing agricultural products from the US, reduce its orders for Boeing planes and restrict service trade. There has also been talk that the PBOC could start dumping Treasurys (which would, in addition to pushing US rates higher, could also have the effect of strengthening the yuan). Though if China is going to dump Treasuries, will they also be dumping US stocks and real estate? Stocks have now erased the entirety of the 'constructive talks' ramp from Friday afternoon. The yuan, which has been incredibly sensitive to trade-deal news, also crashed on the news....And just like that, with no new deal talks planned and the US preparing to unveil its own next steps to impose 25% tariffs on all Chinese goods entering the American market later in the day, it appears the year-long trade war between the US and China is finally about to go nuclear. At least that's how it's looking right now: We imagine it's only a matter of time before the US announces the timing of the next round of talks, prompting algos to send the market 500 points higher in a frenzy of buying."
Is Fear Finally Coming Back? 'Outlook For Gold Works Against The Market' -Sprott/Kitco
"Fear is finally making its way back into the financial markets and pushing gold higher, said Eric Sprott, billionaire precious metals investor and founder of Sprott Inc. 'The outlook for gold works against the market and that's why it is up this week because the markets have been down about 3% across the board and there is fear coming back into things here,' Sprott said....The latest headlines keeping the markets worried are the trade war negotiations that are likely to be an ugly affair with no easy resolution, Sprott pointed out. 'You can just sense it. It is not going to be an easy negotiation. Obviously Chinese pushed back on things and the only option Trump had was to put more tariffs on. And this trade war… is going to have a big impact on earnings and sales all around the worlds and those who believe we are in the Goldilocks market might have to reconsider,' Sprott explained....A more reliable measure when it comes to gold price direction is the physical side of the market, added billionaire precious metals investor. 'I always fall back on the physical side,' he said, highlighting impressive demand for the metal worldwide. 'China stepped up their buying to 15 tons last month. That I find very significant … Plus, we have these other government and central banks that are also buying,' he noted."
Everything Investors Need to Know About the War on Cash -Motley Fool
"Physical forms of currency - cash and personal checks - are losing favor among global consumers to alternative forms of payment, including debit and credit cards, digital wallets, mobile commerce platforms, and, in some circles, even cryptocurrencies. Online banking applications and automatic bill-pay options are making writing checks, using cash for high-cost transactions, and other traditional financial services less and less attractive....Why is cash use declining? Three catalysts are responsible for global commerce's gravitation toward cashless payments: 1. E-commerce, 2. Mobile payments, 3. International adoption of digital payments....The primary risk to investing in this trend is probably obvious: While we have named the loser in this 'war,' it is much harder to know who the ultimate winner will be. Will card payments spread from the United States and other developed economies to emerging economies, or will mobile payments displace the plastic rectangles residing in our wallets? Are cryptocurrencies the future of money or a fad that will mostly be used for illicit purposes and black-market transactions?....The war on cash isn't going away any time soon...Cash might never go extinct, but it will probably occupy decreasing market share in the world's economy for some time to come."
We agree with the reasons Motley Fool lists regarding why the use of cash is declining; but we would add a very important, but less obvious, fourth reason: In a cashless world your financial privacy vanishes. Swiss America's The Secret War explains why the government will soon require every financial transaction to be taxable, trackable... and blockable! The report is yours free by calling 800-289-2646 or register HERE.
New Democratic Plan Would Ban Private Medicine -Wall Street Journal
"The latest liberal policy idea would effectively end all private health care for many Americans. The proposal, the Medicare for America Act, first appeared as a 2018 paper by the Center for American Progress. It was a plan to expand government-run health care. It's been called 'the Democratic establishment's alternative' to Sen. Bernie Sanders's single-payer scheme. In March, Democratic presidential hopeful Beto O'Rourke endorsed Medicare for America in lieu of the Sanders plan. CNN declared that Mr. O'Rourke's endorsement of Medicare for America demonstrates his 'moderate path,' but the bill is anything but moderate. When Rep. Rosa DeLauro reintroduced Medicare for America legislation on May 1, she included a new, radical provision. The revised bill prohibits any medical provider 'from entering into a private contract with an individual enrolled under Medicare for America for any item or service coverable under Medicare for America.' Essentially, this would bar program enrollees from paying for health care using their own money....The legislation squeezes out the private insurance market in short order. For starters, the law would automatically enroll babies in the new government program at birth...Under the bill, employees would be able to enroll in the government program without penalty, but their employers would have to pay an 8% payroll tax as soon as even one employee opts into the government insurance....With everyone enrolled in Medicare for America, truly private health care would cease to exist....Rather than empowering Americans to get the health care they want, Democrats are intent on forcing them to buy what liberals say is best. They would give the government massive power over medicine - but patients would have none of their own."
5.10.19 - Democrats See Themselves in Trump
Gold last traded at $1,287 an ounce. Silver at $14.79 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday as geopolitical angst weakened the dollar. U.S. stocks extended this week's sell-off, after President Trump said there's 'absolutely no need to rush' on a trade agreement with China as new tariffs kicked in.
Gold set for a weekly rise as US tariffs on China kick in -CNBC
"Gold prices rose on Friday and were set to post a weekly rise as the United States raised tariffs on Chinese goods and increased fears of a global economic slowdown, with a weaker dollar also offering support to the precious metal. 'Gold is up today and will be up in the short term until there is a concrete resolution to the continuing trade tensions between the United States and China,' said Rob Lutts, chief investment officer at Cabot Wealth Management. The United States intensified a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods amid talks to rescue a trade deal. U.S. President Donald Trump said on Friday he was in no hurry to sign a trade deal with China....The trade conflict between the United States and China could also force the U.S. Federal Reserve to cut interest rates, which could further support bullion prices. Global anxiety has also seen an uptick as U.S. bombers arrived at a U.S. base in Qatar. The bombers have been sent to the Middle East to counter what Washington describes as threats from Iran."
Escalating US-China trade rift risks causing 'bad' Black Friday -Crudele/New York Post
"You've heard of Black Friday. That's a good day for business because consumers start their Christmas shopping. Well, May 10 is also a sort of Black Friday - but the bad kind. It's the day that President Trump increased tariffs on some Chinese goods and add taxes on other products coming into the US from that country. It will definitely be bad for some businesses and will slow down the economies of both the US and China. Don't get me wrong. The Trump administration needs to correct the imbalance of trade with China....Because of the trade deficit, China now holds $1.13 trillion in US government securities. That makes China the biggest financier of the US debt and, depending on whom you talk with, that leaves the US vulnerable to outside interference in our financial affairs. Some say this is unlikely, but if the trade talks got out of hand, China could threaten to sell the US debt it holds...And that would hurt our economy....But the president is nothing if not confident. When I brought up the issue of trade wars and tariffs with him before he was elected, he simply said, 'Don’t worry about it.' OK, so I won’t. But farmers in the Midwest who rely on selling their crops to China will. As will Apple and other technology firms for which China’s population is a huge potential market."
"The Fountainhead" Shows Us That There's More to Life Than Money -Forbes
"On this day in 1943, Ayn Rand's The Fountainhead was published. It tells the story of an impoverished architecture school dropout, Howard Roark, and how he navigates - or fails to navigate - the New York architecture scene. Rand is a hero in many minds and a villain in many more....The Fountainhead is an entire novel about an artist who refuses to sell out...Unyielding and unwavering commitment to principle is why Roark won't budge. He cares about designing to his standards and being faithful to his vision of what a building should be...He doesn't care about being famous. He doesn't care about being rich. He doesn't care about getting credit. He cares about his vision and seeing it fulfilled....By contrast, his nemesis Peter Keating is the star of the New York architecture world. He is rich. He is famous. But he is a fraud and unprincipled faker... Keating's only good work isn't his work at all: it is Roark's. But Roark, again, doesn't want credit. He just wants to see his vision made a reality. Keating is commissioned to design a housing project. As usual, he gets Roark to do the design work for him, and again Roark wants only to see that the building is done exactly to his specifications...They mangle Roark's vision, and Keating does nothing to stop them. Roark does: he dynamites the building....At the end of the novel, Roark stands triumphantly atop a tower he is building, a beacon of the triumph of reason and principle over vanity and avarice."
NOTE: For classic movie lovers here's a link to watch the 1943 Warner Brothers rendition of Ayn Rand's The Fountainhead movie, staring Gary Cooper and Patricia Neal. This movie is a gripping human drama which seems very relevant today given China's proclivity for stealing U.S. technology and ideas and President Trump's willingness to blow things up rather than settle for a substandard trade agreement.
Democrats see themselves in Donald Trump -Ponte/WND
"Could it be that Trump Derangement Syndrome is actually self-hatred by subconsciously guilty and ashamed Democrats and their leftist comrades? Do leftists unconsciously know they need to go to rehab to treat their megalomania, but are silently screaming 'No! No! No!' as in the song by the late Amy Winehouse? Sigmund Freud, the father of psychoanalysis, said that an oddity of certain human psychology was what he called projection: a tendency to see in, and blame, others for the evils they refuse to acknowledge in themselves. Last Friday, without using the term, the liberal-left Washington Post in an editorial warned that President Donald Trump's Attorney General William Barr was going to politicize the Department of Justice and use it as a weapon to destroy the Democrats' 2020 presidential candidates. What the Post editors neglected to admit, of course, is that this is precisely what President Barack Obama's corrupt Department of Justice and politicized FBI has done to Donald Trump. Democrats must fear, at least unconsciously, that justice is coming - but also feel deep guilt, shame and self-loathing for their corrupt, mentally-ill lust-for-power behavior. Freud's projection theory may explain the Democrats' obsession with tearing down the statues of long-dead (Democrat) slave owners from 150 or more years ago. The deeper reality is that socialist Democrats are eager to turn the rest of us into their slaves today. We should keep the historic statues and tear down today's leftist little tin gods."
5.9.19 - Will China-U.S. Trade Talks Falter?
Gold last traded at $1,285 an ounce. Silver at $14.77 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying and a weaker dollar. U.S. stocks resumed a deep sell-off this week after President Trump said China "broke the deal," fueling worries the U.S. and China will be unable to reach a trade agreement before new tariffs go into effect at midnight.
Why the World's Central Banks Are Going Gaga Over Gold -The Street
"Central banks are going gaga over gold. They are snapping up the metal at the fastest rate in almost half a century in a trend that looks set to continue. Over the 12 months through March 31, they purchased a whopping 715.7 metric tons of gold bullion worth around $29.4 billion, according to a recently published report from the industry group World Gold Council. 'In all likelihood, we expect another strong year,' says Alistair Hewitt, director of market intelligence at WGC in London. He notes that the volume of gold purchased by such institutions over the most recent four quarters was higher than for any calendar year since 1971. That was when President Richard Nixon pulled the U.S. off the gold standard monetary system at a time when gold was worth $35 a troy ounce....If the demand for gold from central banks continues, that should be good for the gold market because it all but guarantees that a significant portion of the annual supply of the metal will get taken off the market each year."
"Win-Win or Lose"- A Sneak Peek of Bill's New Book -Bonner/Bonner And Partners
"Bill has been hard at work on his newest book, Win-Win or Lose...Bill reveals the elemental force at the heart of human progress, and shows what happens when we abandon it. Everything is built from the same atoms. We all have the same basic matter at hand; it all depends on how we put it together. A skyscraper is nothing more than various basic elements… assembled in a certain way. Poor tribesmen in the Amazon don't know how to do it; rich people in New York, Tokyo, or Paris do. The difference is knowledge. But there are two forms of learning - technical and social. They are both essential to civilization and our advanced living standards. And they are very different. Technical learning is what brings us atomic bombs and rolling suitcases. Social learning brings us manners, morals, and protocols....The 'game' of life is a learning game. The participants learn every day. Then, they apply the lessons... continue playing... test further... and learn more....Both social and technical innovations result from the exchanges it permits....Win-lose deals - done at the point of a gun - tell you little. Societies, or groups of people, learn from their experiences and follow up, applying the lessons to do better in the future. But that involves a process that the economist Joseph Schumpeter described as 'creative destruction.' Win-win deals create. But they also destroy, regularly ditching mistakes. Otherwise, bad chefs stay in business… bad drivers stay on the road… and bad money stays in circulation....Win-win deals...let markets tell their tales. Voluntary buying and selling discovered prices...The results, gathered over centuries of win-win deals, congeal into a vernacular culture of relationships, language, technical know-how, architecture, rules, manners, customs, old wives' tales, and moral lessons....That is the elegant justice meted out by the 'invisible hand.' Everyone does his best to get what he wants. But to get what he wants, he has to give his counterparty what he wants. The result is more satisfaction for all. And civilization."
Chinese-U.S. Integration Frays as Trade Talks Falter -Wall Street Journal
"The sudden deterioration of trade talks between the U.S. and China this week has raised the prospect of a once-unimaginable rupture between the world's two largest economies. Whether talks ultimately yield a deal, the decadeslong integration of the two economies appears bound to go into reverse as mutual suspicion and geostrategic rivalry permeate political and personal relationships. The signs are accumulating: Manufacturers of shoes, cameras and iPhones are looking to move production beyond China. American officials are forcing Chinese investors to sell their stakes in American startups. Chinese scientists' visas to visit the U.S. are facing delays. How much further this decoupling goes depends critically on what sort of deal, if any, emerges from the current negotiations....Even if President Trump eventually lifts tariffs, multinationals will know they can be reimposed if tensions flare again. And China could slap tariffs, too. So to limit their exposure, many will shift assembly of U.S.-bound goods to third countries less exposed to protectionist threats....The results are already evident. Chinese investment into the U.S. plummeted to $5 billion last year, a seven-year low, from $29 billion in 2017, according to a report Wednesday by Rhodium Group....'There is this theory in the U.S. that the future world would consist of two circles. One is the U.S. centric economic order and the other is the China centric economic order,' says John Gong, a professor at The University of International Business and Economics in Beijing. 'It’s an economic version of the Cold War.'"
Housing Data Warns The Era Of Double-Digit Price Gains Is Over -Zero Hedge
"Following last month's disastrous starts and permits data, Tuesday's release of the S&P/Case-Shiller US National Home Price Index hinted at a nasty slowdown in all 20 metropolitan regions the index tracks, indicating that the era of double-digit growth is coming to an end...This is the weakest annual growth since September 2012, decelerating for an 11th month in January as buyers held out for more affordable properties. At the national level, home prices increased at just a 4% rate, the smallest gain since 2012. With a housing slowdown observed across the country, it certainly seems like the housing market has reached a significant turning point....West Coast housing has started to deflate in the last several quarters. This was a similar call at Bank of America last September, as we reported, the bank said: existing home sales have peaked, reflecting declining affordability, greater price reductions, and deteriorating housing sentiment....Overall, mortgage applications fell 4.3% on the week, following last week's 7.3% plunge; but refis tumbled 5.0% on the week... More signs of the housing industry is faltering....With rate traders pricing in 30bps of rate-cuts in 2019, will the Fed cut before or after home prices across the country plunge?"
5.8.19 - Who Pays for Tariffs?
Gold last traded at $1,285 an ounce. Silver at $14.90 an ounce.
NEWS SUMMARY: Precious metal prices eased back amid market volatility and a flat dollar. U.S. stocks attempted a rebound from a deep sell-off this week as investors remained on edge about an escalating trade war between the U.S. and China.
Gold hits 1-week high as trade jitters dampen risk appetite -Reuters
"Gold prices rose to their highest in more than a week on Wednesday as renewed worries over U.S.-China trade dispute and its potential impact on global growth dented risk sentiment, stoking investors towards safe-haven assets....'Gold is being supported by risk-aversion buying at the moment,' said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA....U.S. President Donald Trump tweeted on Sunday he would raise tariffs on $200 billion worth of Chinese goods, while Washington accused Beijing of backtracking from commitments made during trade negotiations....'Downside risks to growth from higher tariffs and the potential for equity weakness and lower yields should support gold,' UBS said in a research note."
The Irresistible Allure of Modern Monetary Theory -FEE.org
"With Americans taxed to the hilt and refusing to finance greater deficits, Bernie Sanders's vulnerability remains his inability to address how his initiatives for increased government spending on infrastructure, subsidized college tuition, and medical care will be paid for. No problem, says Stephanie Kelton, a professor at Stony Brook University; the U.S. government can simply print the money. As strange as it may seem, Kelton's idea, broadly known as Modern Monetary Theory - which has been called 'The biggest idea in Washington' - has broad appeal...However, bypassing traditional monetary policy distribution channels has huge implications for gold and, more importantly, for productivity and for freedom itself. To understand the irresistible allure of Stephanie Kelton and Modern Monetary Theory, you need to understand where we are in the economic cycle. During the past four decades, American system-wide taxes, borrowing, and government spending have been growing faster than GDP. As any first-year economics student could tell you, it’s a classic Ponzi Scheme. Worse, professional economists in government, banking, and academia - whose chief role is to justify transfers of funds to their respective organizations - won't breathe a word of just how dangerous things are because their jobs are reliant on the current system....In America's fantasy economy, government money-printing thus emerges as an ideal solution to prolong the Ponzi....We don't give investment advice regarding gold or anything else. But with America in the midst of an intractable, slow-motion, stealth, Soviet-style economic collapse, we will give storage advice. Those who own the yellow metal… should bury it six feet deeper."
Who Pays for Tariffs? -Wall Street Journal
"The U.S.-China trade conflict is headed for America's shopping centers. When the Trump administration began placing tariffs on Chinese imports last year, it cushioned the blow to consumers by targeting items purchased by U.S. manufacturers and other businesses. But the higher tariffs set to go into force Friday would apply 25% levies on more than $40 billion worth of items purchased directly by consumers - furniture, handbags, clothing, Christmas decorations, fire alarms and other items shoppers find on the shelves at Target, Walmart, Macy's and other stores, Josh Zumbrun reports. 'Consumers pay: One of the administration's earliest tariffs, in January 2018, was a 20% duty on washing machines. Prices of both washing machines and dryers rose by about 12% as appliance makers spread the cost increase across both items, even though dryers weren't tariffed. Drop in the bucket: Though consumers are much more likely to notice if tariffs increase to 25%, the move isn't likely to derail the U.S. economy. Oxford Economics estimated that tariffs of 25% against all Chinese imports would reduce economic growth by 0.3%. That may push the growth rate below 2% by the end of the year, but still nowhere near a recession.'....U.S.-China trade negotiations resume Thursday, just ahead of a deadline set by President Trump to raise tariffs on Chinese goods. At the top of the agenda: a U.S. demand that a trade agreement lay out an inventory of laws and regulations that Beijing must revise for compliance. China has objected to including the list."
The Trade War Is Back -Rickards/Daily Reckoning
"President Trump shocked markets yesterday when he announced that a new, heavy round of tariffs on Chinese goods will take effect this Friday. Complacent markets had assumed that a trade deal would get done, that it was just a matter of sorting out the details. Now that is far from certain. Failing a last minute deal, which is certainly possible, the trade war is back. And it could get worse. What most surprised me about the new trade war was not that it started, but that the mainstream financial media denied it was happening for so long....Today the story line has been that the trade war will not have a large impact on macroeconomic growth. It will. The mainstream media have been wrong in their analysis at every stage of this trade war. And it did not see this latest salvo coming. The bottom line is that the trade war is here, it's highly impactful and it could get worse. The sooner investors and policymakers internalize that reality, the better off they'll be. For years I've been warning my readers that a global trade war was likely in the wake of the currency wars.....Countries resort to currency wars when they face a global situation of too much debt and not enough growth....The trade war will be good for U.S. jobs but bad for global output. The stock market is going to wake up to this reality. The currency wars and trade wars are set to get worse. Investors should prepare."
5.7.19 - Stocks Plunge on Trade Worries
Gold last traded at $1,285 an ounce. Silver at $14.92 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying despite a firmer dollar. U.S. stocks fell as investors sold after a top U.S. trade official said higher tariffs on Chinese goods are coming later this week.
10 Reasons to Double-Up on Gold in 2019 -Craig R. Smith/SATC
"2019 represents a golden opportunity to double-up on your precious metals holdings for many fundamental reasons....1. Rising Political Uncertainty – With the 2020 presidential election in sight, Americans will soon be deciding whether to continue embracing free market capitalism or to vote in favor of progressively bigger government, higher taxes and less freedom...2. High Stock Market Valuations - Investors are increasingly wary of stocks that are priced steeply relative to projected earnings...3. Institutional & Billionaire Buying - When it comes to being ahead of the curve, big money has already turned to gold...4. Rising Central Bank Purchases - Central Bank purchasing of physical gold is up 74% year-over-year reaching 651 metric tons in 2018; the highest annual net purchases since Nixon closed the gold window back in 1971!...5. Growing International Risks - The geopolitical environment is the most dangerous it has been in decades, according to the World Economic Forum Global Risks Report. Some 90% of experts say rising tensions and further economic confrontation are the single most urgent risk in 2019....I suggest reviewing your gold holdings with your Swiss America broker. Find out how much gold you should consider adding to your portfolio this year - before gold prices begin an even steeper upward trajectory."
Read the full story for the complete list of ten reasons why now is the time to convert a portion of your savings into physical gold. Gold is one the few 'pure assets' on earth - in other words, it is not someone else's liability, or debt.
America Needs A Debt Jubilee -Roberts/Zero Hedge
"As far as I can discern these days no one in the general population has any thoughts of Sumer, Babylonia, Assyria, or Ur....These civilizations were more advanced and more humanitarian than our own. They were more advanced because the rulers were focused on ensuring the society's longevity by maintaining a livable balance between debtors and creditors. It has all been downhill ever since. The rulers maintained social balance and, thereby, the life of the society by periodically canceling debts. The rulers understood that compound interest resulted in debt growing faster than the economy....To protect their societies from dissolution by unpayable debts, rulers periodically cancelled agrarian debts owed by the citizenry at large, but not mercantile debts among businessmen. The reason for debt forgiveness was stability, not egalitarianism....In America today the population is drowning in unpayable debts - student loan debt, credit card debt, home mortgage debt, state and local government debt, and business debt - but policymakers have reserved forgiveness only for the debt associated with the bad and irresponsible investments of the big banks and financial institutions...Modern day economics has no prescription for preventing our society from failing from debt overload...This is an economy headed down, not up."
Debt Collection Activities Shifting to Digital Devices -Wall Street Journal
"Consumers with debts in collection could soon see email and text messages replace phone calls and letters as the main channels of communication from debt collectors. The Consumer Financial Protection Bureau on Tuesday unveiled a plan to update rules governing debt-collection practices, proposing to reduce the number of calls collectors can make to consumers...The proposed rule is expected to spur a shift in how the debt-collection industry operates. 'What most of us know as consumers is people pick up telephone messages far less frequently than they used to,' a senior CFPB official said Tuesday. 'Some of this is inevitable. It would accelerate the trend in the industry.' The proposed rule would prohibit debt collectors from making more than seven attempts to collect a specific debt by telephone a week...The limit doesn't apply to email or text messages....The number of individuals with an account in third-party collections was 25 million in June 2018, according to a review of credit reports by the Federal Reserve Bank of New York, and more than 40% of individuals have had an account in collections at some point over the past 10 years."
Wall Street plunges on heightening U.S.-China trade worries -Yahoo/Reuters
"Wall Street's main indexes tumbled more than 1 percent on Tuesday, as renewed worries over trade negotiations with China stoked global growth worries and kept investors away from risky assets. Beijing said on Tuesday that Chinese Vice Premier Liu He will visit the United States this week for trade talks, playing down U.S. President Donald Trump's unexpected threat on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent. Trade tensions also pushed U.S. treasury yields lower as investors turned to low-risk government bonds, pressuring interest rate sensitive banking stocks, which fell 1.69%. 'Many had been looking at this week as providing a potential breakthrough in talks between the world's two largest economies, yet we instead have seen the U.S. threaten a raft of new tariffs,' Joshua Mahony, senior market analyst at IG, wrote in a note."
5.6.19 - Trump Doubles Down on China Tariffs
Gold last traded at $1,283 an ounce. Silver at $14.92 an ounce.
NEWS SUMMARY: Precious metal prices steadied Monday on safe-haven buying despite a firmer dollar. U.S. stocks fell after President Trump said the U.S. will hike tariffs on goods imported from China.
Trump Doubles Down: 'We're Not Going To Lose To Beijing Anymore' -Zero Hedge
"Just when US equity futures were finally starting to move higher, President Trump doubled-down on his antagonistic stance toward Beijing, tweeting that the US was done losing '500 billion dollars' a year in trade to China. The message was clear: Trump isn't backing down from his threats to hike tariffs and impose new ones....Trump latest tweet follows reports that Beijing was still planning to send a trade delegation to the US this week, but that Vice Premier Liu He, the official who has led the Beijing side during the now ten rounds of talks that have been held over the past year, might either delay a trip to Washington by a few days, or not go at all. It supports the view that, given the market's robust performance since the start of the year, Trump feels he has the latitude to ratchet up the pressure on Beijing, given the strength of the labor market and Q1 GDP."
Global Aging Changes Everything -Reason
"From Ninja Economics comes the incredible chart showing that 'for the first time ever there are now more people in the world older than 65 than younger than 5.' At first blush, this might seem like a vaguely interesting fact and not much else. But in reality, this development will affect virtually every aspect of our future lives. First and foremost, it means that the global human population will start to fall, since aging populations have fewer kids (and as Reason's Ronald Bailey notes, global fertility rates have been falling for years). The impact on the world's economy will be staggering, especially since there are effectively no known cases where long-term economic growth takes place against the backdrop of a shrinking population....What will an older world look like...It's not at all clear. One of the great things about capitalism and free markets is that they are constantly changing what gets produced and consumed. 'Creative destruction,' Joseph Schumpeter famously wrote, is 'the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.' For all the recent talk about 'late capitalism,' the increasingly capitalistic global economy that has emerged over the past half-century or more has been pretty great for most people...That should give us some faith that we'll figure out a way to increase living standards even in a world whose population is shrinking."
Gold steadies as Trump’s tariff threat supports dollar -CNBC
"Gold was little changed on Monday as the dollar gained after U.S. President Donald Trump threatened to raise tariffs on Chinese goods, escalating Sino-U.S. trade tensions and prompting investors to sell riskier assets. U.S. President Donald Trump on Sunday said he would raise tariffs on $200 billion worth of Chinese goods this week. He also said he would target a further $325 billion of Chinese goods with 25 percent tariffs 'shortly,' essentially covering all products imported into the United States from China. 'We are seeing the markets reacting to uncertainty about trade talks. It is creating some nervousness in the markets. The dollar is a tad stronger, countering some of the potential moves we would have seen otherwise in gold,' said Ole Hansen, commodity strategist at Saxo Bank....Physical demand for the metal had been robust last week with India and Singapore leveraging the correction in prices ahead of a key gold-buying festival."
U.S. Deploys Forces to Mideast to Deter Iran -Wall Street Journal
"The Pentagon is sending a carrier and its accompanying ships as well as what is known as a bomber task force to the region in coming days in response to 'a number of troubling and escalatory indications and warnings,' National Security Adviser John Bolton said in a statement Sunday. 'The United States is not seeking war with the Iranian regime, but we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces,' he said....The move to deploy additional forces to the region was based on a specific threat to U.S. forces operating in the region, according to a U.S. official. There have been indications recently of Iran or its proxies assembling and moving assets both on land and at sea, the official said....The Trump administration has been pushing to drive Iran's oil exports to zero and has taken other steps to ratchet up the economic pressure on Iran, including by designating Iran's Islamic Revolutionary Guard Corps as a foreign terrorist organization....Iranian Foreign Minister Javad Zarif also warned last month of a potential military confrontation in the region, though he insisted that it wouldn't be caused by Iran."
5.3.19 - The Ongoing Federal Reserve Fight
Gold last traded at $1,281 an ounce. Silver at $14.97 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Friday on bargain-hunting and a weaker dollar. U.S. stocks rebounded from a two-day loss, as data showed U.S. job creation was stronger than expected in April.
April Jobs Smash Expectations, But Wage Growth Muted -Zero Hedge
"The US job market juggernaut continues to accelerate...The BLS reported that in April the US economy added another 263K, smashing expectations of a 190K print, and well above both the March (189K) and February (56K) prints. The April print was well above the average monthly gain of 213,000 over the prior 12 months. Payrolls were highlighted by strength in construction (+33,000), professional and business services (+76,000), education and health services (+62,000); weak spots include manufacturing (+4,000) and retail (-12,000), the third straight decline. Average hourly earnings rose 'only' 0.2% from the prior month, and 3.2% from a year earlier - once again these figures were below forecasts and the same as March's readings...As Bloomberg notes, wage growth was led by lower-paid employees - those in production and non-supervisory roles. What is more concerning, and suggests that the real hourly earnings number would be even worse, is that the average workweek actually declined from 34.5 to 34.4....The labor force participation rate unexpectedly dropped back to the lowest level since the 1960s, sliding from 63.0% to 62.8%....Stocks rose while both the dollar and 10Y yields kneejerked higher initially before sliding lower."
The Federal Reserve Fight -Editors/New York Sun
"The defeat of Steve Moore's candidacy for a governorship of the Federal Reserve invites a strategic look at the fight over our central bank. This fight has, after all, been brewing a long time - since, in our view, 1971, when President Nixon closed the gold window and ended the era of Bretton Woods, when the dollar was redeemable by foreign governments for a 35th of an ounce of gold. Since which the value of the dollar has plunged more than 97%. We share the Wall Street Journal's admiration for Mr. Moore. It is denouncing the low tactics used against Mr. Moore. It notes that Democrats will never forgive Mr. Moore for being right on taxes. We've admired his preparedness to ask 'basic, even radical questions about our monetary system, such as whether we need the Federal Reserve in the first place.'....We took the possibility that Mr. Trump would nominate Mr. Moore to the Fed as a signal that Mr. Trump might begin redeeming his campaign promises on monetary reform. One promise is for a monetary commission that would review the Fed's performance in its first century. The thing to note right now is that the Left was unable to defeat Mr. Moore on that issue. It managed to stop him only by shameful, ad hominem attacks. All the more reason for Mr. Trump to turn to other reform-minded nominees, such as economist Judy Shelton, for whom the Wall Street Journal is reiterating its support, which The New York Sun very much shares."
My Brush With Personal Destruction -Moore/Wall Street Journal
"When President Trump asked me to serve as a member of the Federal Reserve Board, I was honored. I never imagined the storm that would follow. The left and the media instantly launched a relentless campaign against me...On Thursday I reluctantly threw in the towel and asked the president not to nominate me. I knew that many of my ideas on monetary policy were controversial and outside the box. That’s why the president picked me. My central argument is that economic growth does not cause inflation - an assault on the core belief of the Keynesian economists at the Fed....A majority in the Senate viewed my economic-policy expertise favorably, and my confirmation seemed likely....What did me in was not my economic ideas but gutter campaign tactics and personal assaults. I've been called an adulterer, a misogynist, a tax cheat, a deadbeat dad, antigay and mentally unfit. A Washington Post editorial warned that I was a “dangerous” pick for the Fed...They must imagine I have superheroic powers of persuasion....One irony is that one of my most vicious attackers has been CNN. In 2017 the network signed me to a two-year contract as a senior economic analyst. I appeared on the air more than 100 times, and CNN renewed my contract. As soon as Mr. Trump said he would nominate me to the Fed, the network began trashing me day after day for things I'd written decades before it hired me. The low point of the sleaze campaign was when the media successfully persuaded the Fairfax County, Va., courts to unseal my divorce records from nine years ago - over not only my objections but my ex-wife's. The Post, New York Times and others unfolded our dirty laundry on their pages - never bothering to report that she and I are on amicable terms and often jointly attend our kids' events....Still, some good has come of all this. Because of all this attention, unwelcome as it was, my mantra that growth doesn't cause inflation seems to be taking hold. Tax cuts, deregulation, sound money and pro-business policies shift the supply of goods and services outward and increase the global demand for dollars. This in turn lowers prices. That was the lesson of the Reagan years, and we're now rediscovering it under Mr. Trump."
Gold Won't 'Hibernate' For Much Longer -Bloomberg Intelligence/Kitco
"Gold bulls will not be locked up for much longer as gold's hibernation is likely to come to an end soon, said Bloomberg Intelligence (BI), noting the metal’s divergent strength in Q1. 'The primary diversifier, gold, at the bottom of the performers, is more likely to move higher, notably if the dollar doesn't. Unchanged gold is showing divergent strength vs. the primary recovery driver in 4Q - increasing stock market volatility - which has plunged in 2019,' BI's senior commodity strategist Mike McGlone said in the May's edition of Commodity Outlook. Gold bulls have been restrained this year due to lower U.S. stock market volatility and higher U.S. dollar, McGlone pointed out, adding that those factors are unlikely to last....One of the key drivers for gold in Q2 will be increased stock market volatility, which has hit a bottom and is most likely to go up from here, according to BI."
5.2.19 - AOC Doc: Capitalism Spreads Socialism
Gold last traded at $1,272 an ounce. Silver at $14.61 an ounce.
NEWS SUMMARY: Precious metal prices eased back Thursday after the Fed douses rate cut hopes. U.S. stocks fell for a second day as interest rates continued to rise following comments on Wednesday by Fed Chairman Jerome Powell.
"Like It Or Not" Central Banking Is On Its Way Out; MMT Will "Inevitably" Replace It -Dalio/Zero Hedge
"Following the publication of his 'capitalist manifesto' Ray Dalio called for drastic reforms of the American capitalist system to redistribute wealth and resources more equitably...It set off a wave of wealthy capitalists talking about how 'capitalism is broken', placing him at the forefront of a trend that could have profound implications for American politics as Wall Street struggles to confront the rise of populism on the right and the left. Late Wednesday Dalio published a follow-up where he expanded on a proposal that, as we noted at the time, sounded suspiciously similar to Modern Monetary Theory. This time around, Dalio argued that, whether we like it or not, the US will eventually be forced to embrace MMT, this has become 'inevitable,' he said. Central banking as we know it (which, thanks to rampant money printing in the post-crisis paradigm, has already moved closer to the MMTers ideal) is doomed to eventually collapse under its own weight and unpopularity. In other words, sooner or later, the people will demand MMT, once inequality gets bad enough....Of course, Dalio isn't the only Wall Street luminary to come out in favor of MMT. But will he stick to his guns after the inevitable backlash? Or will he eventually change his mind like Carl Icahn?"
Why the Gold 'Maginot Line' Will Soon Break -von Greyerz/Gold Switzerland
"The principal reason why gold is the only money that has survived throughout history is that it cannot be printed. It also has many other important attributes, such as scarcity, indestructibility, divisibility etc....There are a number of critical factors that will soon lead to the crossing of the Gold Maginot Line at $1,350. Among them are: A physical gold shortage, The global credit explosion since 2006 from $125 trillion to $250 trillion today, The fragility of the financial system, US budget deficits for 60 years and trade deficits for 50 years, The continuous debasement of currencies, Trade wars, Geopolitical tension. The above list is certainly not exhaustive....Gold is now in the finishing stages of a corrective move. Once the correction is over and gold breaks the Maginot Line at $1,350, we will see a quick move to $1,600. I would not be surprised to see gold making new highs in 2019 against the dollar, above $1,920. The next move up could start as soon as in the next 2-3 weeks...But gold should not be bought for speculative investment purposes. Gold should be held as wealth preservation or insurance against a rotten financial system that is unlikely to survive in its present form. Like any insurance, holders of gold should not hope for gold to surge. Because when it does, the world will be a much more unpleasant place to live. It is much better to enjoy the present times knowing that if and when the problems in the world start in earnest, you are protected."
New AOC documentary relies on capitalism to spread socialism - Oh, the irony! -Ortiz/Fox News
"As an economic system, socialism has an unmatched record of human misery. Yet as a product sold in capitalist America, socialism is a raging success. Witness Wednesday's Netflix release of 'Knock Down the House,' a film that features a glowing portrait of socialist Alexandria Ocasio-Cortez and her socialist ideas. Netflix paid a record $10 million for the rights to this documentary. It's executive produced by Regina Scully, whose hedge fund manager husband John owns a $400,000 model train set in their East Hampton summer mansion that boasts a 2,200 square foot basement. Keep in mind the film's initial budget was $28,111, raised on Kickstarter. Talk about a return on investment. Then there's Netflix itself, one of the greatest capitalist stories of this generation....'Knock Down the House' joins a growing catalog of pro-socialist and anti-capitalist content on Netflix. Other documentaries include Oliver Stone's Marxist revisionist history, 'The Untold Story of the United States,' and former Clinton administration Labor Secretary Robert Reich's 'Saving Capitalism,' which proposes various ideas to destroy capitalism....Ocasio-Cortez also urges public transportation use and criticizes capitalist Uber, yet her campaign spent $29,000 on ride-hailing services since May 2017. I guess for them, it's socialism for thee, but not for me. Socialists' biggest problem with capitalism is that it creates wealth inequality. But it's also the only economic system that creates wealth in the first place....Karl Marx T-shirts and socialist manifestos will always sell in America, but this is a testament of capitalism, not socialism."
A Real Attorney General -Editorial Board/Wall Street Journal
"Washington pile-ons are never pretty, but this week's political setup of Attorney General William Barr is disreputable even by Beltway standards. Democrats and the media are turning the AG into a villain for doing his duty and making the hard decisions that special counsel Robert Mueller abdicated. Mr. Barr's Wednesday testimony to the Senate Judiciary Committee was preceded late Tuesday by the leak of a letter Mr. Mueller had sent the AG on March 27. Mr. Mueller griped in the letter that Mr. Barr's four-page explanation to Congress of the principal conclusions of the Mueller report on March 24 'did not fully capture the context, nature, and substance' of the Mueller team's 'work and conclusions.' Only in Washington could this exercise in posterior covering be puffed into a mini-outrage. Democrats leapt on the letter as proof that Mr. Barr was somehow covering for Donald Trump when he has covered up nothing...Mr. Barr's four-page letter couldn't possibly have covered all the nuances of a 448-page report....Keep in mind Mr. Barr was under no legal obligation to release anything at all. Mr. Mueller reports only to Mr. Barr, not to the country or Congress....Democrats are also upset that Mr. Barr concluded that Mr. Trump did not obstruct justice regarding the Russia probe. But in that decision too Mr. Barr was behaving as an Attorney General should....All of this shows again the risks of appointing special counsels. They lack the political accountability that the Founders built into the separation of powers....This trashing of Bill Barr shows how frustrated and angry Democrats continue to be that the special counsel came up empty in his Russia collusion probe. He was supposed to be their fast-track to impeachment. Now they're left trying to gin up an obstruction tale, but the probe wasn't obstructed and there was no underlying crime. So they're shouting and pounding the table against Bill Barr for acting like a real Attorney General."
5.1.19 - President Calls on Fed to Cut Rates
Gold last traded at $1,284 an ounce. Silver at $14.72 an ounce.
NEWS SUMMARY: Precious metal prices were little changed Wednesday ahead of the Fed's statement. U.S. stocks rose following the release of Apple’s quarterly results and strong jobs data for April.
President calls on Fed to cut rates by 1% and urges more quantitative easing -CNBC
"President Donald Trump, in his most brazen attack yet on the Federal Reserve, called for the central bank on Tuesday to cut interest rates by 1 percentage point and to implement more money-printing quantitative easing. In a two-part tweet, the president unfavorably compared the Fed to its China counterpart and said if monetary policy in the U.S. was looser, the economy would 'go up like a rocket.' In the past, White House officials including Trump and top economic advisor Larry Kudlow have recommended the Fed cut rates by half a point. The tweets literally doubled down on that approach. The Fed currently targets its benchmark interest rate in a range between 2.25% and 2.5%. It has hiked the rate nine times since December 2015, though it indicated in March that it likely is done with increases for the rest of 2019 despite forecasting two more at the end of last year....Along with multiple calls for rate cuts, this is Trump’s second demand for more QE...There have been no indications the Fed is contemplating another round of QE, though economists at the St. Louis Fed have been floating the idea."
World's Monetary Reserves and the End of an Era -Price/Plata
"We had been observing the evolution of the total of Central Bank Monetary Reserves for several years, and noted a peak on August 2, 2014, when these Reserves reached a maximum of the equivalent of $12.032 Trillion dollars, according to Bloomberg...As of April 19, 2019, CB Monetary Reserves had fallen by $479 Billion dollars, to $11.553 Trillion dollars....In 2014, the great exporting powers of the world must have come to the conclusion that the US, as a purchaser, was in very serious and permanent trouble: that its Trade Deficits would have to grow year by year, and that the Exporting Countries had to put an end to the increasing growth of their Monetary Reserves (made up principally of Dollars earned through exports). The US did pay out the gigantic sum of $3.603 Trillion dollars, in the period from 2014 to 2019. If these dollars did not show up, at least in part, as Monetary Reserves of CBs, where are they? The $3.603 Trillion dollars paid out by the US...are in the US banking system, in accounts belonging to foreigners, but not including foreign Central Banks....The CBs of the exporting countries, as of April 2014, no longer regard the dollar as a desirable investment, and this marks the end of an Era. The CBs of the exporting countries pass on their dollars to subsidiary government entities, who purchase gold....In effect, the CBs of the exporting countries regard the dollar as an 'IOU' of a business that produces an endless amount of 'IOUs'...Therefore, it would seem likely to see the value of the dollar enter into a secular decline, as CBs increasingly dishoard dollars and go for gold as the desirable factor in their Reserves....There is a constant flow of gold from West to East, as China, and other nations divest themselves of dollars and obtain gold, which is a physical asset independent of any political entity....Conclusions: a) The heyday of the Dollar is over. b) The world is moving toward currencies redeemable for stated fixed amounts of gold. c) At some point a rush into gold may take place...until it reaches multiples of its present, artificially low price in dollars."
The Dollar Usually Smiles in Recessions, but Maybe Not Next Time -Wall Street Journal
"Has the dollar stopped smiling? The dollar smile is a neat theory that says the greenback should do well when the economy is very strong, because then U.S. assets attract foreign money, or when the economy is very weak, because fear drives a flight to the safety of the dollar....In the past, the dollar behaved differently to other currencies. The yen and the Swiss franc offer safety and strengthen in bad times, but lose out in a strong economy when returns elsewhere look more enticing. Sterling and emerging markets do well in good times, but suffer when there is a panic. Only the dollar, with its status as the ultimate reserve currency, has combined the benefits of both. The past few months have turned the smile upside-down. The panic in markets at the end of 2018 should have provided a perfect opportunity for the dollar to show its haven properties, but instead it flatlined...The dollar seems to have stopped smiling...The danger is that in the next recession, any rush for the safety of the dollar will be offset much more than usual by the Fed’s cutting rates....The weak link between U.S. growth and the rest of the world have created strange times for the globe's reserve currency. Faced with such uncertainty, investors have to grin and bear it."
Gold holds steady as markets brace for Fed decision -Reuters
"Gold prices were little changed on Wednesday ahead of Federal Reserve's latest policy announcement later in the day, while rejuvenating global equities made safety assets less lucrative to investors. Investors are awaiting the end of a two-day meeting by the U.S. Federal Open Market Committee (FOMC), after the central bank ended its three-year policy tightening drive last month, ditching projections for any interest rate hikes this year. 'We have the U.S. economy still producing robust data which could turn off or relax some of the views that Fed is going to loosen the policy anytime soon,' said Bart Melek, head of commodity strategies at TD Securities in Toronto....ADP's national employment data for April showed 275,000 new private-sector job additions, higher than consensus estimate of 180,000 additions."