1.4.17 - Prepared For Trumponomics?
Gold last traded at $1,165 an ounce. Silver at $16.55 an ounce.
NEWS SUMMARY: Precious metal prices rose again on Wednesday on rising demand and a weaker dollar. U.S. stocks traded modestly higher on upbeat consumer spending and higher oil prices.
Elites Don’t Need to Ban Cash to Eliminate It -Daily Reckoning
"It’s a new year. And the war on cash opens on a new front…India launched a major offensive in November when it banned the most widely used bank notes. Chaos was the result. And now… Greece is launching its latest offensive against cash…This offensive amounts to a 'soft' ban on cash. Greece may not seem important. But beware… this 'soft' cash ban could be a model for the advanced economies....Once the level of cash in society falls to a certain point, it’s only a small step before it vanishes entirely. And that’s how cash will die. They don’t have to ban it outright. It’ll just die of neglect. They just have to make it impractical to the point that no one accepts it anymore....Then comes the order: Lay down your cash and come out with your hands up. And off to the digital POW camp you go. Today, it’s Greece. It’ll be someone else tomorrow. And don’t be surprised one whit if it’s America next week or next month or next year."
Are You Prepared For Trumponomics? -Craig R. Smith/SATC
"I am thankful Mr. Trump will be our next president. He has a steady hand and realizes tough choices must be made, following 8-years of Obama political and economic abuse. But markets neither forgive debt nor mistakes. Markets ultimately correct, regardless of who's in the White House. Mr. Trump is not a miracle worker. While he may be a great leader capable of restoring hope, even before he takes office, he cannot make the debt bubble disappear, nor can he avoid its devastating effects. For example, just since the election of Trump, bonds have lost $2 trillion in value. Interest rates have risen and inflation fears have returned....U.S stocks now trade at 28-times earnings, averaged over a 10-year period or CAPE (cyclically adjusted price earnings). The long-term average is 17-times earnings....The U.S. dollar, while currently enjoying a 14-year high, will eventually resume it's long-term downward trend. President Richard Nixon assured that long-term trend when he closed the 'Gold Window' back in 1971." Full story...
How did gold and silver really do in 2016 and where are they headed this year? -SharpesPixley
"Domestic and foreign policy uncertainties may form the crux of a gold price resurrection in 2017. This may already have started in 2016, but big financial sector interventions from around mid-year succeeded in nipping that in the bud – even so gold was up around 8% over the year and silver an even higher 15%. This was after being up respectively around 25% and 45% immediately after the US independence Day holiday – a turnaround date which saw inflows into the world’s largest gold ETF switch to major outflows....If Trump’s supposedly business-friendly initiatives run into serious opposition in Congress then the dollar may well suffer. But, there’s little doubt that dollar strength will be important for the gold price and the prospects of a trade war with China and the unwinding of some other key trade agreements, which Trump appears to wish to implement, could be destabilising for the greenback."
As we enter 2017, the world is gripped by deep political divides, unsustainable debt, volatile markets, vulnerable currencies and a political power structure that has been turned completely upside down. Swiss America's 2017 Gold Report - Early Edition is an in-depth assessment of the dramatic political and economic events that will impact our financial security in the New Year.
Prosperity = Abundant Work + Low Cost Of Living -Charles Hugh-Smith/Zero Hedge
"If we look at eras of widespread prosperity, we find that work is abundant, private enterprises and trade are vibrant, the currency is stable, the cost of doing business is low, inflation and the cost of living are low, so even low-wage households can slowly improve their lot....We can do better, but only if we discern the systemic reasons why wages are stagnating, small business is in decline and the rich get richer while everyone else gets poorer. An economy that only serves the prosperity of the protected top 5% is an economy doomed to rising inequality, stagnation and widespread social discontent."
1.3.17 - Investors Brace for 2017 Shocks
Gold last traded at $1,162 an ounce. Silver at $16.40 an ounce.
NEWS SUMMARY: Precious metal prices launched higher Tuesday, building upon solid 2016 price gains. U.S. stocks opened higher, then moderated as oil prices retreated.
Trump, interest rates and Chinese panic: Why euphoria could turn to a credit crunch in 2017 -Evans-Pritchard/Telegraph
"Donald Trump's reflation rally will short-circuit. Rising borrowing costs will blow fuses across the world before fiscal stimulus arrives, if it in fact arrives. By the end of 2017 it will be clear that nothing has changed for the better. Powerful deflationary forces retain an invisible grip over the global economy. Bond yields will ratchet up further and then come clattering down again – ultimately driving 10-year US yields below zero before the decade is over. There are few ‘shovel ready’ projects for Trump’s infrastructure blitz. The headline figures are imaginary. His plan will be whittled down by Congress. The House will pass tax cuts for the rich but these are regressive, with a low fiscal multiplier."
Greece Unleashes 'Soft' Cash Ban -Zero Hedge
"The spread of global cash bans continues with Greece unveiling their so-called 'soft' approach by which taxpayers will only be granted tax-allowances or deductions when payments are made via credit or debit cards. As KeepTalkingGreeece reports, the new guidelines refer to employees, pensioners, farmers, and also the unemployed....Should a taxpayer not be able to spend the necessary percentage of the annual income according to the guidelines, the punishment will be a penalty of 22% imposed on the missing difference....In the bizarre Greek world we live in, households will be obliged to spend money even if they do not want to....The cap for cash transactions fell from 1,500 until 12.31.2016 down to 500 euro. In simple words: any purchase of good and service over 500 euro will need to be done via plastic money."
Investors brace for 2017 shocks after surprise 2016 run -Reuters
"Reflecting the renewed bullishness for equities, U.S.-based stock funds pulled in $11.8 billion in the week ended Dec. 28, data from Lipper showed on Thursday, marking a sharp reversal from most of the year. But investors see several warning signs for 2017, including stocks at traditionally expensive valuations; investors registering particularly bullish sentiment; and the Federal Reserve primed to raise interest rates several times this year....January has proven to be a difficult month for equities in recent years, with the S&P 500 falling at least 3 percent in each January of 2014, 2015 and 2016....'A lot of people have postponed selling gains this year, expecting that they are going to have lower tax brackets next year,' said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago."
Swiss banking secrecy nears end following new tax rules -CNBC
"Switzerland's reputation as a secretive tax haven looks set to end following the introduction of rules over sharing bank account data. The International Convention on the Automatic Exchange of Banking Information (AEOI) entered into force on January 1, pulling Switzerland in to line with international standards on taxation....In the past, Switzerland would only provide banking information if requested by a limited number of countries and even then, full co-operation was not guaranteed....According to the Swiss State Secretariat for International Financial Matters, Switzerland will now start collecting data on 1 January 2017 and exchange it for the first time in 2018.....'Aside from Switzerland, almost 100 states, including all major financial centers, have declared their intention to adopt the standard,' the Swiss secretariat said on its website."
The Answer To Our Economic Stagnation Is Hiding In Plain Sight -Tamny/Forbes
"Northwestern University economist Robert Gordon, former Economist magazine editor Marc Levinson, and the Wall Street Journal’s Greg Ip all accept the popular falsehood that the U.S. economy has essentially hit an insurmountable innovation wall. To Gordon the intangible wall is a function of past innovation that left today’s geniuses with little fruit to pick, Levinson strangely believes global competition has lightly suffocated modern American genius, while the reporter in Ip hits on a number of possible stagnation drivers. All miss the corpulent elephant sitting in what is a bare room....As Hazlitt put it long ago, it’s 'incredible' that even the 'ignorant' could believe we’ve somehow reached the boundaries of advancement. No, we never will. There will always be unmet human needs, suffering, and even better, there will always be ways to improve on what is already great....That it will remind us yet again that there will never be enough - or too much - capital simply because entrepreneurs will never succeed in solving all of our unmet needs, not to mention the ones we didn’t know we had."
12.30.16 - Gold Prices Rise 9% in 2016
Gold last traded at $1,157 an ounce. Silver at $16.08 an ounce.
NEWS SUMMARY: Precious metal prices steadied on Friday, with gold rising nearly 9% and silver rising over 14% in 2016. U.S. stocks drifted lower in pre-New Years trading, with the Dow rising over 13% in 2016 - 10% of the rise since the presidential election.
Gold Lures Investors Worried About Trade Wars and Trump Tweets -Bloomberg
"The Donald J. Trump era is marking a new age for gold as an investor safe haven. While the precious metal has always been hoarded in times of trouble, a bevy of political and economic surprises in 2016 sparked a surge in buying that sent bullion to the first annual gain in four years. Prices may rally 13 percent in 2017, according to a Bloomberg survey of 26 analysts. Fueling the bullish outlook is the risk of chaos on multiple fronts: a possible trade war from America’s fraying relationship with China, the alleged Russian hack of U.S. political parties, the U.K.’s complicated exit from the European Union, and elections slated in France, Germany and the Netherlands that may see a rise of nationalist groups. And then there are Trump’s frequent Twitter posts, in which the U.S. president-elect feuded with rivals and made declarations that unsettled allies even before he takes office Jan. 20....Gold for immediate delivery is up 8.9 percent this year to $1,155.12 an ounce, halting a three-year slide."
2016 - A Year Of Trading Dangerously -Zero Hedge
"If 2016 taught traders anything, it was that old norms were useless and the concept of the market as a discounting mechanism is lost forever. This flipping of reality is nowhere more evident in the topsy-turvy shifts in risk expectations across global asset classes - where 'safe' is now riskiest and 'riskiest' is now safe. Cross-asset-class correlations collapsed in 2016 - from S&P and Dow decoupling to bonds and stocks recoupling and high- and low-beta stocks losing all relationship....Expected swings in foreign exchange swelled this year, with the JPMorgan Global FX Volatility Index averaging its highest level since 2011, as political surprises such as Brexit brought turbulence to markets....Will 2017 be the year to normalize these relationships?"
India’s Demonetization: Explained -TheArcMag
"The Reserve Bank of India (RBI) announced that Indian citizens can go to any RBI location or any bank branch and trade in their demonetized bills for credit into their accounts. The deadline for doing so is tomorrow, December 30, effectively giving them less than two months total....So far, quite predictably, Modi’s scheme has destabilized many aspects of the Indian economy....Modi’s approach will certainly eliminate some of this black money. But it won’t be able to grapple with the black money held in the form of precious metals and other assets, such as real estate holdings. ...Amartya Sen, the Nobel-winning Harvard economist, has said that 'only an authoritarian government can calmly cause such misery to the people.' Sen’s point in calling Modi’s government 'authoritarian' is that it is an authoritarian move to eliminate the trust embedded in the protection of currency stability. The people expect the government to protect their bills, not to destroy them."
The top 10 business stories of 2016 -USAToday
"Although the year had its share of mergers, acquisitions, new regulations and the usual corporate winners and losers, it will probably be best remembered for the prospect of government policy changes that could deeply affect Americans for years to come. Here is our top-10 list of the year's biggest stories. 1. Donald Trump elected president... 2. Brexit... 3. The Dow closes in on 20,000... 4. Rising prescription drug prices bring controversy... 5. Wells Fargo's scandal... 6. Unemployment rate falls... 7. Oil prices plunge, then rebound... 8. The U.S. dollar shines... 9. Pressure on free trade... 10. Fake news fears."
12.29.16 - Volatility Signals Big 2017 Changes
Gold last traded at $1,157 an ounce. Silver at $16.21 an ounce.
NEWS SUMMARY: Precious metal prices rose over 1% Thursday on year-end bargain hunting as the U.S. dollar declined. U.S. stocks extended losses on lackluster economic data and profit taking.
Trumponomics Gives Gold Bulls Hope -Forbes
"Last week I looked back at the six big market themes we discussed back in January. Today I want to talk about the final two.... Back in January, I discussed the role of the Japanese central bank in the global economy. Japan was taking the QE torch from the Fed....The final theme I discussed earlier this year was concerning gold... ‘Gold is a trade built on fear, not reality - Be Short (or Flat) Gold. Gold was just a trade built on fear, not reality. And gold was a trade built on speculation, as people piled into gold listening to the forecasts of $5,000 and $10,000 gold'....Gold will finish up small for the year, but had a strong bounce earlier in the year as people began to fear another global financial crisis (not inflation, but another crisis). And when that passed, the deflation pressures continued to hold up. In fact, for much of the year (prior to the U.S. elections) the world was pricing in global negative interest rates. But with radical inflationary policies coming in the U.S., the bull story for gold is actually beginning to look rational. There may be opportunity for the gold bulls in 2017."
Gold – Ready to Spring Another Surprise -Acting-Man
"If one looks at long term charts of gold, one can see that meaningful rallies usually start as technical short covering moves, which often are still at odds with at least some of the macroeconomic fundamentals....If a meaningful move has indeed begun though, the fundamental drivers will begin to fall into place as it continues, and it will become clear in hindsight that the market has anticipated these developments. It is therefore definitely worthwhile to pay attention to sentiment extremes and inter-market divergences....Given the pattern seen in recent years, the fact that such strong bearish sentiment is seen right at the end of the year is definitely a heads-up indicating that another bout of surprise strength in gold is likely in early 2017....It looks like gold is close to staging a playable rally again early in the new year."
Silver could be new gold; prices may rise 20% in 2017 -India Times
"Commodity experts and bullion traders feel that silver can trump gold in coming months as demand for the metal is increasing for solar panels and electronics sector. Demand for silver is increasing in the home décor and fashionable jewelry categories in the country which may push the price of the metal by almost 15-20% in 2017, feel the traders and analysts....Silver has gained 16% in 2016 in comparison to gold, which has appreciated 9% in the whole year....Gnanasekar Thiagarajan, director, Comtrendz Risk Management Services, said: '...The price of silver, which also falls in the precious metal category, has dropped in tandem with gold, but the decline in silver price is lesser than gold. But we have seen that when gold prices rally, silver prices outperform gold. 2017 is expected to be a good year for silver. Investors, who want to take a position in silver, can get good returns if they stay invested for a longer horizon.'"
Britons Hoard Cash as Economic Uncertainties Prompt Caution -Bloomberg
“Britons are holding onto their cash in a sign that they may be hunkering down in the face of economic uncertainties, according to the British Bankers Association. Personal deposits grew an annual 4.8 percent in November, data compiled by the BBA show. They increased by 32.4 billion pounds ($39.7 billion) in the first 11 months of the year, outstripping the 19.8 billion-pound growth in the same period of 2015. British investors and savers were shaken by the June decision to leave the European Union, which prompted the Bank of England to cut interest rates to a record-low 0.25 percent.... ‘We’ve seen personal deposits, in particular, grow more strongly in recent months as consumers hoard cash in the absence of higher-yielding, liquid investment opportunities,’ BBA Chief Economist Rebecca Harding said. ‘This growth in personal deposits may also suggest that consumers are looking to grow their cash reserves against potential economic uncertainties, such as an expectation of lower wage growth.’”
12.28.16 - Europe Proposes Confiscating Gold
Gold last traded at $1,141 an ounce. Silver at $16.04 an ounce.
NEWS SUMMARY: Precious metal prices steadied on Wednesday despite a sharply stronger dollar. U.S. stocks traded lower amid downbeat pending home sales, as the Dow's 10th attempt to top 20,000 level failed again.
Europe Proposes Confiscating Gold In Crackdown On "Terrorist Financing" -Zero Hedge
"Hot on the heels of China gold import restrictions, and India's demonetization and gold confiscations, The European Commission proposed tightening controls on cash and precious metals transfers from outside the EU under the guise of shutting down one route for funding of militant attacks on the continent, following the Berlin Christmas attack....There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal. Expect capital controls to follow. And now, as Reuters reports, it appears last Monday's attack on a Christmas market in Berlin, where 12 people were killed as a truck ploughed into a crowd, has given The European Commission just the excuse to tighten capital controls - specifically cash and precious metals - into and out of Europe....So - cash, bitcoin, precious metals, and prepaid cards over $150 are all instruments of the 'terrorists' and are now open to confiscation if you are a suspicious person... which, by their rhetoric, you are if you actually hold any of these assets."
Governments and bankers worldwide have declared a 'war on cash'. Will a cashless world change your life in a good or bad way? Find out for yourself by reading our two special reports on the subject: TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
As Home Prices Rise, Flippers Make a Comeback -Wall Street Journal
Number of investors flipping homes returns to pre-crisis levels; big banks also get back in the game. The number of investors who flipped a house in the first nine months of 2016 reached the highest level since 2007. About one-third of the deals were financed with debt, a percentage not seen in eight years....A number of banks are arranging financing vehicles for house-flippers, who buy and sell homes in a matter of months....In recent months, big banks, including Wells Fargo & Co., Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have started extending credit lines to companies that specialize in lending to home-flippers....House-flipping television shows and training 'schools' for new investors are proliferating....'Anybody and everybody is getting into the business of house-flipping-that's when you know it's the end of the rope,' said George Geronsin, 36, a Southern California real-estate agent and house-flipper..."
Germany is taking its gold back faster than expected -Business Insider
"'In 2016, we brought back again substantially more gold to Germany than initially planned; by now, nearly half of the gold reserves are in Germany,' Bundesbank President Jens Weidmann told the German tabloid Bild in what has become an annual Christmas interview about gold - to soothe the nerves of his compatriots....The German Bundesbank, which is in charge of managing Germany's gold hoard of 3,381 tons, the second largest in the world behind the US, got into hot water in 2012 when rumors were circulating that some or much of its 2,000 tons of gold stored in New York, London, and Paris might not be there anymore, that it might have been melted down, leased, or sold....Bundesbank Executive Board member Carl-Ludwig Thiele told the German daily Handelsblatt at the time that these moves were a 'trust-building' measure, and he tried vigorously to put the rumors about the missing gold to rest....Perhaps someone else will end up with the missing gold. But Germans breathed a sigh of relief. The message that 1,600 tons of their gold was safely back in Germany came just in time for Christmas."
Israel Cabinet minister calls Kerry speech 'pathetic' -Associated Press
"A senior Israeli Cabinet minister on Wednesday called U.S. Secretary of State John Kerry's planned Mideast policy speech a 'pathetic step,' further heightening tensions between the two close allies as the Obama administration prepares to leave office. The comments by Public Security Minister Gilad Erdan were the latest salvo in a toxic exchange following the U.S.'s refusal to veto a U.N. Security Council resolution last week that called Israeli settlements in the West Bank and east Jerusalem a violation of international law. Israeli Prime Minister Benjamin Netanyahu has slammed the resolution, and accused the U.S. of colluding with the Palestinians in drawing it up....Meanwhile, a senior leader of the West Bank settlement movement called Kerry a 'stain on American foreign policy' and 'ignorant of the issues.' Oded Revivi, chief foreign envoy of the Yesha Council, said Kerry is 'the worst secretary of state in history,' who 'chose to stab his closest ally in the back' and knows little about the realities of Israeli settlements in the West Bank."
12.27.16 - Why Trump Can't Stop Next Crisis
Gold last traded at $1,138 an ounce. Silver at $16.00 an ounce.
NEWS SUMMARY: Precious metal prices rebounded Tuesday on year-end bargain hunting despite a stronger dollar. U.S. stocks traded higher riding the crest of upbeat consumer confidence about 2017 U.S. economic policy change hopes.
The world of gold about to change? -Valuewalk
"When you look at the price of gold in 2016 you see that the level we have today 1130 USD/oz. is only a little bit higher than January’s 1050 USD/oz....An analysis based primarily on the price of metal is misleading. Last 12 months were chaotic and official price of gold seems to obscure the shift this market is experiencing. According to the news from 2 weeks ago, gold will be accepted as an investment asset in the Middle East....The Muslim world has higher standards than Comex and will not accept certificates without backing in physical metal - paper gold.....How much money are we talking about? The Islamic investment market for gold is worth $1.8 trillion USD. Note that Eastern approach to investment is different from Western style....The culture from the East demands metal – not paper. Investors fly to Dubai to purchase physical bullion. Many will call this being backward-looking or medieval but with the market’s situation today it looks to me as a common sense. I mentioned Dubai on purpose. The exchange there recently informed that they will use the price of gold given by the Shanghai Gold Exchange. This is a historical moment as we see Chinese power growing each year similarly to the total trading volume. During last 36 months, trading volume of SGE increased five-fold.”
The War on Cash Has Already Been Lost -Moneyweek
"India is banning large notes. The 500 euro note has been withdrawn. Venezuela is withdrawing it highest bills. Central bankers around the world have started to make serious speeches about abolishing cash, while tech companies are investing millions getting us to use cards and phones instead. The war on cash has never been more intense. To listen to many of the reports, and the trend among regulators, you might imagine that it was only a matter of time before the notes and coins in our pockets went the way of the typewriter or the horse and carriage – historical curiosities, to be found only in museums. To its growing army of critics, cash is a pointless relic....Even worse, it mainly exists to facilitate crime....The trouble is, ordinary people don’t seem to see it that way. They like cash more than ever. A new study of 18,000 people in seven countries in the International Journal of Central Banking found that cash was still overwhelmingly the dominant method of payment....According to Bank of England figures, the number of notes and coins circulation in the UK rose by 8% in the last year alone....Instead of being phased out, it is more and more popular.."
James Rickards says Trump can’t stop the next financial crisis -Marketwatch
"James Rickards sees threats in many places. In his latest book, 'The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis,' he paints a picture of how that crisis will unfold. He argues that rather than pumping the financial system with liquidity, as happened in 2008, 'elites' will freeze the financial plumbing until the crisis has passed. That means banks will close, as will exchanges. Money-market funds will be inaccessible. Forget trying to get your hands on money....Rickards, who now advises the Defense Department and U.S. intelligence community on international economics and financial threats, discussed his latest book with MarketWatch."
US Government Can Legally Access Your Facebook Data -Zero Hedge
"The end of the year is approaching, and data concerning government abuses of power has begun pouring in. According to Facebook’s Global Government Requests Report, government’s requests for Facebook account data rose 27 percent in the first half of 2016. Facebook’s official announcement explained that requests for user data went from 46,710 in the last half of 2015 to 59,229 in the first half of 2016. At least 56 percent of these requests, Facebook added, 'contained a non-disclosure order that prohibited us from notifying the user.' Law enforcement agencies from across the globe, Facebook continued, often send restriction requests demanding Facebook remove content from its forums....Facebook may promise to 'apply a rigorous approach to every government request' that comes its way, but rigor may only be practiced within the boundaries of U.S. law....Search warrants were produced in only 13,742 cases of request for data while only 781 others were backed by court orders."
12.23.16 - Fed’s Impending Inflation Disaster
Gold last traded at $1,133 an ounce. Silver at $15.76 an ounce.
NEWS SUMMARY: Precious metal prices traded higher Friday on bargain hunting ahead of the Christmas holiday weekend. U.S. stocks traded flat as investors took to the sidelines. [Note: Swiss America will be closed on Monday, Dec. 26th in observance of the Christmas holiday.]
The Fed's Impending Inflation Disaster? -HedgeEye
"There is considerable debate whether or to what extent the Fed's QE reduced long-term yields. But there is another effect of QE that is unassailable, although it has received almost no attention. Specifically, QE produced a massive increase in the M1 money measure. M1 increased by $1.9 trillion from August 2008 to October 2016-more than it increased during its previous 48-year history.....The recent growth in M1 is unprecedented, so we have no idea what might happen. I don't believe its effect will continue to be reflected only in equity and real estate prices. It seems likely that it will eventually inflate a broad range of consumer prices as well. Should this happen, the FOMC will find it nearly impossible to shrink its balance sheet fast enough to avoid further large increases in M1. Moreover, the FOMC will find it extremely difficult to reduce M1; draining excess reserves is one thing, draining required reserves is another. Indeed, all new lending would cease because banks would have to issue large amounts of CDs just to finance their existing loans; the multiplier works in reverse, too. Consequently, the FOMC may be unable to avoid an inflation disaster."
Gold Miners Are Running Out of Metal -Bloomberg
"Gold's had a roller-coaster year, surging as much as 30 percent before giving up the bulk of those gains. But one trend has been consistent: mining companies are finding it harder to dig up more of the precious metal....Even though producers' exploration budgets surged more than 10-fold to $6 billion a year in the decade to 2012, new finds are in decline. The amount of gold discovered last year was down 85 percent compared with 2006....Because of fewer discoveries, reduced mine life and a lower gold price, the amount of known metal that's economically worth mining is falling. Major producers' reserves have slipped 40 percent since 2011....Mine supply will peak in 2019 and keep falling through at least 2025, according to BMO Capital Markets. Randgold Resources Ltd. Chief Executive Officer Mark Bristow is among those expecting so-called peak gold in the next few years."
The Smartest Thing I Heard in 2016 -Noonan/Wall Street Journal
"Donald Trump is our national obsession. Almost six weeks after the election and on the eve of Christmas and Hanukkah he is topic A at every gathering. People have Post Traumatic Trump Disorder and feel compelled to share their thoughts and feelings, their joy - 'I can't stop feeling happy!' said a normally contained editor and intellectual, to his own surprise - and despair...But the smartest thing I heard came from an elected official, a Republican who, when I asked what he thought would happen in November, got a faraway look. 'This is the unpollable election,' he said, last July. People don't necessarily want to tell you who they're for....The official who called 2016 the unpollable election was Sen. Tim Scott of South Carolina, the first black man to be elected to the Senate from that state. I asked him this week why he knew the polls wouldn't get it right. He'd become aware, he said, when he 'went to the gym or talked to the UPS guy' that there was 'a sentiment,' a sense of 'disenfranchisement.' The pollsters didn't or couldn't pick it up.....Election night he stayed up until it was called....What reaction did he see from the men in the gym the following days? 'Elation.' 'Someone finally speaks for me.' 'The 'deplorables,' they got called rednecks and racists and not real people - well they were real people, and they were real mad. Trump in his own unique, almost mystical way is able to speak a common language that is abrasive and sometimes unattractive but always digestible.'"
Trumpocalypse? Suddenly Liberals Are The Ones Stockpiling Food, Guns And Emergency Supplies -InfoWars
"Now that the shoe is on the other foot, many liberals all over America have suddenly become extremely interested in prepping. Fearing that a Trump presidency could rapidly evolve into a 'Trumpocalypse', a significant number of leftists are now stockpiling food, guns and emergency supplies. In fact, even though many had expected a sharp drop in gun sales following Trump's victory, what actually happened is that fear of what is coming under Trump pushed background checks for gun sales to an all-time record high on Black Friday. The election of Donald Trump has awakened the left to a degree that we haven't seen in decades, and some on the left are embracing hardcore survivalism without any apologies....Many on the right have responded to Donald Trump's election victory by deciding that the battle is over and that it is time to go to sleep....I hate to say this, but in this case those on the left that are busily preparing are showing much more wisdom than many on the right that have chosen to abandon prepping altogether at this point."
12.22.16 - Biggest Threat to Trump Rally
Gold last traded at $1,130 an ounce. Silver at $15.87 an ounce.
NEWS SUMMARY: Precious metal prices steadied on Thursday on thin, pre-holiday trading and a flat dollar. U.S. stocks drifted lower despite upbeat GDP data as the Dow struggled to reach 20,0000 - a key psychological level.
Q3 GDP Revised To 3.5% On Higher Consumer, Government Spending; Financial Profits Surge -Zero Hedge
"In the third and final estimate of Q3 GDP, the BEA reported that real gross domestic product increased 3.5% in the third quarter of 2016, above the 3.3% expected....However, a quick read beneath the lines shows that, as shown prior, the bulk of the growth was driven by a surge in soybean exports, which contributed 1% of total GDP growth. Add spending on utilities (i.e. air condition bills) and inventories, which contributed 0.5% of the bottom line growth print, and that covers more than half of the 3.5% GDP print the quarter....The upward revision to third-quarter GDP growth reflected upward revisions to business investment, to consumer spending, and to state and local government spending. In the second quarter, real GDP rose 1.4%....On a year over year basis, GDP grew 1.7%."
The Biggest Threat to the Trump Rally -Daily Reckoning
"Goldman analysts note that the Trump rally’s #1 nemesis is the pantsuit in flesh Janet Yellen. Goldman paints the picture of a more aggressive Fed pushing interest rate hikes in order to offset Trump’s fiscal stimulus, which could lead to higher inflation. That will put downward pressure on stocks, effectively taking away the punch bowl to the Trump kegger. Sounds plausible. Anything’s possible. But it’s just one of a host of fundamental factors that could end the market rally....The bottom line is, since 2008, market uncertainty has averaged about twice the level of the previous 23 years. It’s the new normal. We don’t know precisely what’s going to move markets or when it’s going to hit. But we know movement is coming. Are you positioned to profit from it? Or are you positioned to get crushed by it? It’s your choice."
EU to boost border checks on cash, gold to tackle 'terrorism financing' -Reuters
"The European Commission proposed tightening controls on cash and precious metals transfers from outside the EU on Wednesday, in a bid to shut down one route for funding of militant attacks on the continent....Under the new proposals, customs officials in European Union states can step up checks on cash and prepaid payment cards sent by post or in freight shipments. Authorities will also be able to seize cash or precious metals carried by suspect individuals entering the EU. People carrying more than 10,000 euros ($10,400) in cash already have to declare this at customs when entering the EU. The new rules would allow authorities to seize money below that threshold 'where there are suspicions of criminal activity,' the EU executive commission said in a note."
The Connection Between Work and Dignity -Bloomberg
"People realize that the free market rewards people differently based on things beyond their control. A janitor in the Philippines does the same work as a janitor in Texas, but the latter gets paid a lot more. Recessions, local economic conditions, development policy, the winds of global trade and a million other factors all play a part. That’s one big reason why free-market outcomes aren’t always seen as fair. M ost of us want to be valued not just for how much money we can manage to wring out of the system, but how much effort we put in....When you fix up a building or build a train station, you can see the fruits of your labors. When you take care of an old person, you can see a real human being benefit. The value created by these jobs is a lot more tangible and clear than the value created by a lot of activities that the market rewards much more, such as high-frequency trading. The free-market age has made the economy more efficient, but it has come at a dramatic price -- lost dignity for so many. The U.S. has moved away from the idea of a social compact with work at its core. That’s something that deserves to be reversed."
12.21.16 - Gold: World's Crisis-Proof Asset
Gold last traded at $1,133 an ounce. Silver at $15.98 an ounce.
NEWS SUMMARY: Precious metal prices traded flat on Wednesday despite a weaker dollar. U.S. stocks traded lower after lackluster healthcare and housing data.
Paul Krugman’s Latest Conspiracy: Trump Is A Gold Bug -Mises Institute
"Paul Krugman’s decay from Nobel Prize winning economist to partisan hack has only escalated since taking control of his Twitter account....This morning Krugman took to the President-elect’s favorite medium to make the case that Donald Trump was actually a secret 'gold bug'....Though it’s not a shock to see Krugman’s Twitter tirade consist mainly of insults masquerading as analysis, it is surprising the Krugman forget to mention Trump’s flirtation with another gold standard advocate – former BB&T chief John Allison who discussed the Treasury role at Trump Tower. In fact, for Austrians looking for any reasons for optimism, there are few better than the fact Allison name continues to be connected with the administration – possibly at the Fed. Meanwhile, it is promising to see Trump surrounded by at least some people who seem to view the Fed as something less than a heroic force for good. Whether this leads to the new president fulfilling his promise to 'drain the swamp' is yet to be seen. But as we wait to see what 2017 has in store for us, at least we can enjoy watching Krugman continue to destroy his reputation 140 characters at a time."
Axis of Gold -Rickards/Daily Reckoning
"Now is the time to keep your eyes on the monetary endgame. Not the daily mark-to-market in paper gold. This endgame is an all-out attack on the status of the U.S. dollar as the benchmark global reserve currency. Numerous players have an interest in ending the dollar’s role for reasons ranging from climate change (global problems require global money solutions), to geopolitics (Russia and China both have regional hegemonic ambitions in Eastern Europe and East Asia respectively). As investors with longer horizons and patience, we see ways to profit from these global macro trends....All indicators show this is an excellent time to accumulate a position in gold, if you haven’t put 10% of your investable assets in gold and physical metal already (which is what I recommend)....Evidence for the rise of this Axis of Gold is overwhelming....With limited output, limited western sales, and huge eastern purchases, it’s only a matter of time before a link in the physical gold delivery chain snaps and a full-scale buying panic erupts. Then the price of gold will soar regardless of paper gold manipulations. However, it may be too late for investors to benefit because the ready supply of physical gold will be gone. The time to take a position is now."
The Fed has no idea how to tackle the economy -New York Post
"The Federal Reserve raised interest rates last week. As I explained many times before, it really had no choice since the financial markets were already raising them. But here’s the funny thing. The Fed doesn’t have a clue as to what the economy is really doing. Yes, I know that’s been my theme for a long time. But the proof came out again last week. Days after the Fed rate hike, the New York Federal Reserve Bank lowered its estimate of fourth quarter gross domestic product growth to just 1.8 percent. And it said the first quarter of 2017 will hit only 1.7. Both are pathetic growth rates and about 0.7 percent lower than the NY Fed had been predicting. Here’s the scary part. At the same time the NY Fed was cutting its estimates, the Atlanta Federal Reserve Bank was affirming its own prediction of 2.6 percent growth in the fourth quarter. Is this any way to run an economy?”
This Christmas we need the gift of humility -Moore/Washington Times
"A few years before the housing meltdown and the more than $100 billion taxpayer bailout of Fannie Mae and Freddie Mac, Nobel prize-winner Joseph Stiglitz and the future Office of Management and Budget director Peter Orszag wrote a research paper concluding that 'the risk to the government from a potential default on GSE debt is effectively zero.' So either the housing bust was a one in a million event … or they had no idea what they were talking about....In 2005 National Geographic ran a cover story 'The End of Cheap Oil.' A few years later we had the shale oil and gas revolution and now the planet is drowning in cheap energy....Young people today treat experts as if they are godly. Instead of questioning authority - which is a healthy thing, they swallow the swill unthinkingly. On campuses I always have to tell students: don’t believe everything the teachers tell you....Wisdom is knowing what you don’t know, which for all of us, especially the so-called experts, is a lot."
12.20.16 - Trump Effect on Tangible Assets
Gold last traded at $1,133 an ounce. Silver at $16.12 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Tuesday on bargain hunting despite a stronger dollar. U.S. stocks traded higher despite geopolitical tensions as the DJIA nears key 20,000 level.
Gold is the investment with the biggest turnaround potential in 2017 -Marketwatch
"With U.S. stock valuations now at their highest level since the technology bubble, I believe the S&P 500 will be little changed or even fall next year. As such, I don’t have a particularly strong conviction on picking any turnaround U.S. stocks. In lieu of a stock pick, my candidate for the investment with the most turnaround potential in 2017 is gold. Using the SPDR Gold Trust ETF as a proxy, we can see that gold is up 7% this year....Here are three reasons why I like gold at the current price of $1,150 an ounce. 1. Inflationary U.S. and Chinese policies will result in speculative fund flows into gold....2. Chinese and Indian jewelry demand will recover in 2017....3. Speculative inflows into the SPDR Gold Trust have capitulated, suggesting a good entry point."
The Trump Effect Upon Tangible Assets -Bradshaw/Swiss America
"I just received an interesting email from Craig Smith, Swiss America Chairman, author and frequent Fox News guest. Craig confidentially shared why he believes 2017 will be a banner year for tangible assets - based on what he is seeing in the collector markets - even before Trump is inaugurated. For example, last week at a Tiffany auction held by Sotheby's, a beautiful three-panel stained glass window created for a famous church was up for auction. To Craig's amazement this item sold for an amazing 5 TIMES the bidding price - in excess of $2 million! 'A penny saved for 200 years can earn $2.5 million,' reported NY Daily News. In January 2015 an ultra-rare 1792 Birch Cent penny sold for $2,585,000 at auction to an anonymous collector. Now that’s a pretty penny! The same collector recently reported refusing an offer on the Birch Cent of over $4 million - a 40% price increase in less than two years! In 1981 the same Birch Cent penny was sold at auction for $200,000." Full story
How Trump Has Changed the Financial Outlook for 2017 -Bloomberg
"So why the optimism? Are members of the investing class, giddy over the prospects of income-tax cuts and deregulation in a Trump presidency, simply projecting the potential improvement in their personal circumstances on the broader economy? Or is there a more rational explanation? Actually, there is. Trump has promised a major fiscal stimulus, including investment in infrastructure, that the Organization for Economic Cooperation and Development estimates might add 0.4 percentage point to U.S. economic growth in 2017 (and more than 0.8 percentage point in 2018). Together with the corporate-tax cuts that the president-elect has also proposed, this could improve corporate profits, justifying higher stock prices and lower default-insurance costs. That said, much depends on the execution. Trump's plans remain sketchy, and could go terribly wrong in myriad ways. Right now, markets seem to be placing a very low probability on such an undesirable outcome -- at least in the short term. If they prove wrong, 2017 might be a very interesting year indeed."
"Demonetization Has Achieved Nothing" - India's Rapidly Plunging Toward A Police State -Zero Hedge
"India’s Prime Minister, Narendra Modi, announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender....As the deadline of 31st December 2016 approaches, Gresham’s law has been turned upside down....As you read this, keep in mind that India’s GDP per capita is $1,718....These people, who earn a dollar or two a day, are now expected to use electronic media for transactions, in an economy in which electricity and the internet are unpredictable even in big cities....Demonetization will have achieved nothing positive. But it will have seriously damaged the Indian economy. The human costs are immense and continue to pile up. This could easily — even likely — take India to autocracy and eventually, bloody and chaotic disintegration."
12.19.16 - 2017: Gold Poised For Comeback!
Gold last traded at $1,142 an ounce. Silver at $16.09 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Monday amid bargain hunting and a weaker dollar. U.S. stocks rose in choppy trade as a tech rebound boosted the Nasdaq index.
Gold poised for a comeback in 2017 -Investing
"The investment analysts think has the most turnaround potential in 2017 is gold....Inflationary policies, by the governments of China and the U.S., will encourage speculation, resulting in increased cash flow into electronic traded funds (ETFs) related to gold, according to analysts. President-elect Donald Trump’s plans to cut taxes is expected to add trillions of dollars to the country's debt burden. The U.S. federal debt is still expected to increase from 77% of U.S. GDP at year-end 2016 to 86%, or about $23 trillion, over the next decade, driven by spending on health care for seniors and children and the indigent and retirement. Analysts also said that jewelry demand from India and China should regain momentum next year."
Prelude To Global Collapse And How Swiss Refiners Just Exposed The Big Lie In The Gold Market -King World News
"With interest rates soaring, today the man who has become legendary for his predictions on QE, historic moves in currencies, spoke with King World News about the prelude to global collapse and how the Swiss refiners just exposed the big lie in the gold market. The Final Mania In Global Markets - Egon von Greyerz: 'We are now approaching the final mania in markets. The Dow seems to be on its last swan song. Investors are determined to take it up to 20,000. Since there are only 160 points to go, this would not be hard to achieve. At the same time, U.S. Treasury bonds are crashing. The 10-year yield has gone from 1.4%, a low 1 1/2 years ago, to 2.6% today. Normally stock market investors would worry about higher interest rates but the market is currently in a euphoric mode so any bad news is ignored in this final crescendo....But the current stock market bonanza in the US is likely to be short lived. It is not just the massive overvaluation which is pointing to that, technical indicators also indicate that we will soon see a major downturn....This is something that virtually no investor can see today, and that is why the shock will be of a magnitude that will shake the world and create a demand for physical gold that can never be met. We will reach a point when there will be 'no offer' for gold'." Full story: http://kingworldnews.com/prelude-to-global-collapse-and-how-swiss-refiners-just-exposed-the-big-lie-in-the-gold-market/
Wall St sleepwalking into Trump volatility surge -Financial Times
"Wall Street may be too complacent about Donald Trump’s corporate tax stimulus and is not pricing in an upsurge in volatility, argues the FT’s John Authers. While US stock market benchmarks have broken through fresh highs, partly on expectation of positive boosts from Washington politics, 'investors should assume that whatever tax package is coming will not be a straight giveaway'. 'The chance of something Wall Street-unfriendly (at least in the short term) appears higher than record high share prices would suggest. It might just be the most dramatic tax reform in a generation, or it could just as easily be an attempt at government meddling in corporate decisions, disguised as a tax cut. Or it could be a disaster. The safest bet, not currently priced by the market, is higher volatility until politicians have thrashed out a tax plan.'"
Ukraine's largest bank rescued by state -Reuters
"Ukraine took over its largest bank on Monday in a move backed by Kiev's international donors to protect the country's financial system and accompanied by an appeal from President Petro Poroshenko for calm and assurances to depositors. In one of the biggest shake-ups of the war-torn country's banking system since Ukraine plunged into economic and political turmoil more than two years ago, the central bank said PrivatBank had not fulfilled its recapitalization program. Risky lending practices had left a capital shortfall of around $5.65 billion on PrivatBank's balance sheet as of Dec. 1, while 97 percent of its corporate loans had gone to companies linked to its shareholders, it said in a statement....'A systemic bank of this magnitude could not be allowed to fail,' said Francis Malige, the EBRD's managing director for Eastern Europe and the Caucasus, in a statement."
U.S. electors expected to officially confirm Trump victory -Reuters
"The U.S. Electoral College is expected on Monday to officially select Republican Donald Trump as the next president, a vote that is usually a formality but that has taken on extra prominence after an unusual and particularly acrimonious election campaign....It is highly unlikely the vote will change the outcome of the Nov. 8 election, which gave the White House to Trump after he won a majority of Electoral College votes....A candidate must secure 270 votes to win. Trump won 306 electors from 30 states."
12.16.16 - Will Trump Blow Up the Bull?
Gold last traded at $1,137 an ounce. Silver at $16.14 an ounce.
NEWS SUMMARY: Precious metal prices jumped over 1% Friday as geopolitical worries over China weighed on the dollar. U.S. stocks drifted lower as the Trump rally paused after a Chinese warship seized a sovereign U.S. vessel.
Flation And The Surge Of Silver -Egon von Greyerz/Gold Switzerland
"'Flation' is guaranteed in the next few years. We will see in-flation, stag-flation, hyperinflation and de-flation. Many of these flations will happen simultaneously. Currently we have major monetary inflation combined with asset inflation. Credit growth and money printing have in recent years benefited the ailing banking system but have not yet reached consumer prices and therefore there is no ordinary price inflation....In 2017, velocity of money is likely to increase, leading to stagflation which is higher prices without growth....As I have advocated since 2002, gold is the best way to preserve wealth and to insure against the coming collapse of paper currencies as well as the financial system....The risk/reward situation for silver changed at the beginning of 2016. Silver has now reached a point where relative to gold it represents excellent value. What is particularly interesting is that silver is now in a position to move twice as fast as gold....Silver should not be bought for speculative purposes but for long term wealth preservation."
Here's How Trump Could Blow Up The Entire Bull Market -Mauldin/Forbes
"Has the market gotten ahead of itself? I don’t know. Because I don’t know what is going to come out of the hodgepodge of tax and spending proposals we are seeing....I am not even going to offer you a chart of what happens to equities during periods of rising inflation, other than to say that it’s really ugly....The market is a voting machine, and every twist and turn will change its sentiment. So it’s wise to stay on your toes. Restructuring the tax system the wrong way would be devastating. Trump and his talented team, along with Ryan, McConnell, Brady, and all the rest of the players, need to be very circumspect in how they talk about the details of their plans in public before they get them hashed out among themselves. Markets hate uncertainty, and we could see the entire bull market blow up before we know half the details if stuff starts getting leaked that could be interpreted as damaging."
China's Navy seizes unmanned U.S. vessel -CNBC
"A Chinese warship has seized an underwater drone deployed by a U.S. oceanographic vessel in the South China Sea, triggering a formal diplomatic protest and a demand for its return, U.S. officials told Reuters on Friday. The incident, the first of its kind in recent memory, took place on Dec. 15 about 50 nautical miles northwest of Subic Bay off the Philippines just as the USNS Bowditch, an oceanographic survey ship, was about to retrieve the unmanned, underwater vehicle (UUV), officials said.... 'It's a sovereign immune vessel, clearly marked in English not to be removed from the water - that it was U.S. property,' the official said."
At Long Last, the Fed Faces Reality -Wall Street Journal
"As was widely anticipated, Federal Reserve officials voted Wednesday to raise short-term interest rates by a quarter percentage point - only the second increase since the 2008 financial crash. The central bank appears to have finally confronted reality: that its unconventional monetary policy, particularly ultralow rates, simply has not delivered the goods....Businesses need greater regulatory certainty, and reasonable statutory time limits should be placed on environmental reviews and permit applications. That, along with tax cuts, would do the trick for boosting investment....Next year there will be eight meetings of the Federal Open Market Committee. A quarter-point increase at every other meeting, at least, would be in order."
12.15.16 - Global Populist Earthquake Ahead
Gold last traded at $1,129 an ounce. Silver at $15.95 an ounce.
NEWS SUMMARY: Precious metal prices slumped 2% to 10-month lows Thursday on profit taking as the dollar surged to 14-year highs. U.S. stocks rallied as investors shrugged off a Fed rate hike as Trump euphoria propelled the Dow near 20,000.
How Overpriced Is This Market, Anyway? -Barrons
"They say that moderation is good - and that applies to the stock market too. We want the fundamentals to be strong and investors to be confident....But right now, we may have too much of a good thing - and that could be a bucket of cold water on the roaring fire that is the current market....In other words, since the election, the market really has gotten ahead of itself technically. What’s more, surveys such as the National Association of Active Investment Managers (NAAIM) have reached extremes in bullishness. This particular index is currently at its second highest reading ever....and it’s clear that traders, managers, advisors, and individuals have all bought into this rally. When everyone zigs, the market tends to zag."
Dollar Climbs to Strongest Since 2003 on Fed Path; Bonds Drop -Bloomberg
"The dollar rallied to its strongest level since 2003 against the euro, while gold plunged as the prospect of a steeper path for U.S. interest rates going forward filtered through markets....The greenback extended its advance against major and emerging-market peers after the Federal Reserve's first, and last interest-rate hike of 2016 came with an increase in the number of increases expected next year. Gold tumbled 2.6 percent to a 10-month low....While stocks have rallied and bonds have tumbled since Donald Trump's election as U.S. president fueled bets on an uptick in spending, the Fed stands largely alone in actively tightening policy, fueling that dollar's surge."
Craig Smith comment: "This recent break in gold prices is a the best buying opportunity we've seen this year. If viewed as international money which serves as wealth insurance, gold is currently at year-end sale prices. Given the potential political and economic unknowns going into 2017, I believe gold is no longer a luxury, but rather a necessity. Even UBS executives are saying gold is a must-have insurance policy. Real money stands the test of time." Read more in The Timeless Truth About Gold & Silver.
Venezuelans fight to protect their savings as government pulls bills from circulation -Fusion
"Venezuelans are rushing to the banks this week in a desperate attempt to protect their savings from the government’s latest spasm of reckless financial policy making. On Tuesday morning thousands of people across Venezuela played hooky from work to line-up outside banks and deposit bundles of cash into their savings accounts after the government gave everyone a 72-hour countdown to turn in all their 100 bolivar notes before they’re removed from circulation. 'I’ve been saving for so long, withdrawing money every week and for what? Nothing!' complained José Orozco, who was holding a backpack full of money as he stood in line....There is, however, one group that is still willing to take 100 bolivar bills off people’s hands. Criminals have reportedly been targeting people standing outside the banks, because they make easy targets with their bags of cash."
Populist earthquakes make 2017 the great unknown -AFP/Yahoo
"So after Trump takes office on January 20 at the helm of the most powerful democracy on the planet, will 2017 see populists also take power in Europe? As during the Brexit and US campaigns, the pre-electoral season has been dominated by debate about globalization, the arrival in Europe since 2015 of more than 1.3 million migrants, many of them Muslim, and extremist attacks.... The Netherlands goes to the polls in March: the extremist, anti-Muslim party of Geert Wilders could win for the first time, even if the country's fractured political landscape prevents him forming a coalition government. France will vote for a new president in May. The National Front led by Marine Le Pen is expected to go to a second round against the conservative Francois Fillon regardless of President Francois Hollande's decision not to run.... Trump's victory may also initially inspire 'a certain self-confidence' among European populist movements, concedes Giovanni Grevi, senior fellow at the European Policy Centre in Brussels.... Already severely tested by the woes of the eurozone and a mass influx of refugees, 'Europe remains vulnerable to a whole set of crisis factors,' warned Grevi.'"
12.14.16 - Forget The Fed, Instead Watch This...
Gold last traded at $1,156 an ounce. Silver at $17.22 an ounce.
NEWS SUMMARY: Precious metal prices dipped on Wednesday after the Fed announced they expect three more interest rate hikes in 2017, which boosted the dollar. U.S. stocks fell from fresh highs in choppy trading following Fedspeak.
Forget The Fed: For JPMorgan This Is The Biggest Catalyst Heading Into 2017 -Zero Hedge
"With the market certain the Fed will hike at 2pm today, there is little room for surprise....As JPM notes, the 'next very big catalyst for this market will be the Trump/Ryan tax reform plan and how it makes its way through Congress (which is why the FT article 'Republicans face corporate tax rebellion' is one of the most incremental of the morning). Elevated political expectations are the single biggest risk for the tape and once the year-end chase rally euphoria wears off this will likely weigh on sentiment.'....So far the market has ignored all potential hurdles to the one biggest bullish catalyst since the Trump election: the still largely unknown 'massive' fiscal stimulus that Trump hopes to unveil. Judging by the rising reactions to the Trump plan, from both the private and the public sector, ignoring the potential hurdles that are springing up every single day may be foolhardy."
Can Trump Restore Honest Money? - Craig Smith/CBN
"The new Trump administration faces a daunting job of 'draining the swamp' and beginning the process of dismantling the Progressive policies that have brought America to the brink of both moral and financial ruin. President Trump and his team will face at least six major challenges over the next four years; Entitlement reform, Healthcare reform, Immigration reform, Tax reform, Monetary reform and Regulatory reform. All of which are sorely needed to Make America Great Again. If Trump succeeds in making the changes required, it will no doubt also cause uncertainty to rise - and if there is one thing financial markets hate, it's rising uncertainty....Bottom line: Americans should enter the new Trump era hoping for the best, but also preparing for the worst. Gold is the world’s best form of wealth insurance – whether we face the best of times or the worst of times. In my opinion, the Trump presidency will be very positive for the price of gold." Full story...
Gold is getting set for 'the next big leg higher' -Business Insider
“Gold is probably the most controversial and talked about asset. We’ve all read about or witnessed heated arguments involving the yellow metal. There are two hardcore camps as far as gold is concerned: The Gold Bugs...These are people who believe that gold is the most important form of money, with thousands of years of monetary use in humanity’s history. They are convinced that there will come a time when the 'reset' will come. When all fiat money will be massively devalued (given the relentless money printing that started in force during the financial crisis), and when gold will rocket higher to $2,000, $5,000, $50,000 – take your pick on a price with many zeros....The Gold Haters: These are people who believe that gold is, to use John Maynard Keynes’s famous description, a 'barbarous relic'....On the other hand, gold has been a monetary metal and/or store of value for thousands of years, and its price has been steadily increasing broadly in line with money supply."
Pension Collapse in Big D -City Journal
"The retirement fund for Dallas’s public-safety workers is nearly ruined. When Detroit filed for bankruptcy in 2013, the city’s emergency-financial team said that high levels of retirement debt could prevent them from rescuing the Motor City’s finances. Detroit had been in economic decline for decades, and the pension problem—including billions of dollars in bonuses handed out while the city was hurtling toward insolvency—was just one part of the depressing financial picture. Dallas, by contrast, has been one of the fastest-growing American cities in recent years. Becoming a magnet for investment and opportunity, however, hasn’t protected the Texas city from experiencing its own Detroit-style financial crisis. Dallas’s retirement system for cops and firefighters combines many of the features that have nearly sunk state and local pension plans around the country. Things got so dire over the summer that retirees began pulling their money out of the system. It’s the first run on a government pension plan in recent memory....Fixing this mess without serious reform is almost unimaginable. Even a 40-year plan to pay off the pension debt (twice as long as the Society of Actuaries recommends) would require the city to spend the equivalent of 75 percent of its payroll on pensions alone. Finding the money to do that would require Dallas to more than double property taxes....Dallas is a reminder that no magical incantations exist that can make insane pension math suddenly rational."
12.13.16 - Markets Await Fed Action
Gold last traded at $1,159 an ounce. Silver at $16.97 an ounce.
NEWS SUMMARY: Precious metal prices drifted lower Tuesday on a firmer dollar ahead of Fed statement. The Dow eyes 20,000 as Fed meeting begins; tech spikes more than 1 percent.
Peak Euphoria: Dow Shy Of Record Overbought -Zero Hedge
"With the Dow Jones less than 100 points away from 20,000, it is moot to say that the only sentiment driving the market here, with the S&P trading at 25x actual GAAP P/E, is adrenaline and pure euphoria. Just last night, we showed that the Dow was the most overbought in the past 20 years, while options traders have never been more bullish. Today, following the Dow's surge right out of the gates, it is safe to say that the 'Industrial' average, where Goldman Sachs has been the star performer, and which as of last night, was more overbought on just 4 previous occasions in the past century, is at record euphoria. Putting similar RSI levels in comparison: August 1927, June 1944, July 1955, November 1996, and now December 2016... after each of the previous spikes, stocks fell back 4 to 5% within days."
Kiss your cash goodbye? This year is set to be a turning point for credit -Marketwatch
"Is this the beginning of the end for cash? As consumers have increasingly used credit and debit cards and made purchases online and on apps, they’ve used less and less cash; in 2016, consumers will spend a greater amount on cards than they do with cash for the first time, according to the market-research firm Euromonitor International, which has been tracking consumer payments over the last several decades. In 2016, consumers worldwide will spend about $23.2 trillion in card payment transactions and $22.6 trillion in cash....For some, the fall of cash isn’t considered good news. Although a switch to a digital payment system would potentially save countries a lot of money, since cash is expensive to make and keep in circulation, many citizens have concerns about banks and governments having access to information on what they’re spending, regardless of whether they’re actually involved in any improper or illegal activities."
Governments and bankers worldwide have declared a 'war on cash'. Will a cashless world change your life in a good or bad way? Find out for yourself by reading our two special reports on the subject: TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
Venezuelans Rush to Stash Cash Before Biggest Bill Is Voided -Bloomberg
"Venezuelans were wearily rushing to deposit bank notes or dump their cash savings entirely on Monday following an announcement by President Nicolas Maduro that he was invalidating the country’s biggest bill because of what he says is an attack on the nation’s liquidity. The socialist leader shocked the country on Sunday when he said the 100-bolivar note would be removed from circulation within 72 hours. For months, the South American nation has suffered a hard-cash shortage as inflation spirals toward 500 percent, which Maduro insists is the product of an 'economic war' and an attempt by his political foes to smuggle currency out of Venezuela....According to a report by Torino Capital, a New York investment bank, the 100-bolivar notes account for more than three quarters of Venezuela’s cash outstanding and 11 percent of the nation’s money supply, making Maduro’s decree a difficult task for a nation in the throes of an economic crisis....While the country’s economic crash has reduced the value of the 100-bolivar note on the black market to just a few U.S. cents, cash transactions remain the predominant method for large swaths of the Venezuelan population."
Entering a ‘world of economic chaos,’ Venezuela struggles with hyperinflation -Miami Herald
"Venezuela’s struggling economy just passed another grim milestone: it’s the seventh country in Latin America to ever experience hyperinflation. The term 'hyperinflation' is often bandied about, but it’s actually quite rare, and only happens when monthly inflation exceeds 50 percent for more than 30 consecutive days. On Dec. 3, Venezuela did just that, becoming the 57th known case of hyperinflation since France suffered the malaise in 1795....The other countries in the hemisphere that have seen hyperinflation are Argentina (1989), Bolivia (1984), Brazil (1989), Chile (1973), Nicaragua (1986) and Peru (1988 and 1990)....'They’ve destroyed the currency and now they’re celebrating the fact that one of the notes is being withdrawn,' said Henrique Capriles, the opposition governor of Miranda state."
12.12.16 - Avoid Trump Rally's #1 Mistake
Gold last traded at $1,165 an ounce. Silver at $17.18 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday as dollar bullishness paused ahead of Fed rate hike anticipated this week. U.S. stocks traded mixed as Treasury yields spiked ahead of a key Fed meeting while oil prices soared.
Hawkish Fed a potential speed bump for stock bulls -Reuters
"This week's Federal Reserve meeting and possible signals on the pace of rate hikes for next year could pose the biggest risk yet to the rally the U.S. stock market has seen since last month's presidential election. While investors have long anticipated the Fed will raise rates at the Dec. 13-14 meeting - in what would be its first such move in a year and second in nearly a decade - the worry for some stock investors is that the Fed takes a more aggressive stance on inflation and future hikes....If inflation is expected to pick up quickly, the Fed may need to raise rates faster than investors expect, and that could be a negative for U.S. stocks. 'If they believe that inflation is going to march higher and more rapidly ... That would give the market reason to pause,' said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey....'The market is now overbought in the short and long terms,' said Brad Lamensdorf, a manager for the Ranger Equity Bear exchange-traded fund, which bets stocks will fall."
The #1 Mistake You Can Make in This Trump Rally -Daily Reckoning
"With the Dow Jones up more than 1,350 points in the month since Election Day, everyone wants to be part of 'The Donald' fiesta. Investor optimism is off the charts. You can feel something resembling the giddy dot-com days for the first time in almost 20 years....You see, what we’re seeing from investors right now is described in the Covel medical literature as 'FOMO' disease. FOMO, or 'fear of missing out,' is a big reason why Daniel Kahneman won a Nobel Prize in behavioral economics....And when you feel this way, it causes anxiety and restlessness. To avoid these feelings, you try to do what everyone else is doing....Now, is this bull going to gallop a while longer? Or are we at the last gasp of an incredibly long run? The answer is that nobody knows. That’s why FOMO without a rock-solid exit plan is so dangerous for your financial well-being....If you’re not prepared for the potential run up AND the inevitable crash down, you’re in Las Vegas, folks."
Physical gold offers the simplest form of protection from a sudden market reversal as well as rising inflation. So go ahead and ride the Trump bull a while longer if you dare, but please make sure you've got an exit plan and gold as wealth insurance. Discover The Timeless Truth About Gold & Silver.
India's top gold import bank suspends bullion dealers accounts -Reuters
"Axis Bank Ltd, India's top importer of gold, has suspended the bank accounts of some bullion dealers and jewelers after two of its executives at a branch were arrested over alleged money laundering. The move is likely to curtail imports by the world's second-biggest gold consumer this month and could weigh on global prices already near their lowest level in ten months....There have also been reports of people rushing to buy gold by paying as much as a 50 percent premium above official prices using their unaccounted money to skirt the note ban....The move has brought bullion trading to a standstill, with jewelers fearing attention from government agencies if they make large purchases, said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata."
It's not too early to start planning for the end of the EU -Telegraph
"History tells us that most of the time things do indeed continue much as they were before. Yet sometimes big things happen. The US stock market did crash in 1929; the Second World War did break out in 1939; the Soviet Union did break up in 1991; there was a financial crisis in 2008; and the UK did vote to leave the EU in June of this year. It should not come as a surprise that the markets barely reacted to the result of the referendum on Mr Renzi’s proposed constitutional reforms for Italy and his subsequent resignation....It is possible that Italy will stumble on within the euro and muddle through its current political impasse...The boost that this would give to Italian competitiveness would see Italian GDP recover and this would prompt other southern countries to leave. Before long, the euro would be in tatters. Could the EU itself survive the collapse of its greatest project, along with the consequent recriminations and financial wranglings between Germany and the southern members? I doubt it....What should replace the EU? Surely not a complete return to the status quo ante. As I argued in my book The Trouble with Europe, we need some sort of loose, supra–national structure to underwrite free trade, friendship and co-operation."
12.9.16 - Debt To Halt Trump Euphoria
Gold last traded at $1,161 an ounce. Silver at $16.96 an ounce.
NEWS SUMMARY: Precious metal prices slipped Friday on a stronger dollar. U.S. stocks extended gains amid Trump-inspired economic optimism.
Chinese Buyers Find Bargains in Gold -Wall Street Journal
"Gold investors have rushed to the exits since Donald Trump’s surprise victory in the U.S. presidential election, dragging prices to a nine-month low. Now Chinese retail buyers are stepping in to take advantage of the low prices. Gold sellers in Hong Kong, where mainland Chinese often buy gold, report an increase in purchases, some of it for weddings around this month....Changes in buying patterns in China are felt in the world-wide because it is the world’s top gold consumer, accounting for about 30% of global demand. The surge in buying in China is providing a layer of support to gold prices, which are under pressure from expectations that the U.S. Federal Reserve will raise interest rates next week, a move that would likely boost the dollar....'The weakening of the [yuan against the dollar] has also led new investors onto the gold bandwagon as a hedge,' said a Hong Kong-based head of the bullion desk of a large international bank."
5 reasons why stocks are in melt-up mode -USA Today
"Call it a moonshot. Or Wall Street euphoria. Or a 'Trump Rally,' as investors are pricing in better earnings and economic growth, thanks to the president-elect's promises to cut corporate taxes, reduce business red tape and spend heavily on infrastructure....Here's five theories that explain why stocks are in rally mode. 1. Money managers playing catch-up....2. Bond sell-off eases....3. Cash flooding back to stocks....4. 'Trump Effect.'....5. A trend signal says 'buy.'"
The recent stock market rally illustrates a huge anomaly between Trump euphoria (based on emotion) and economic reality (based upon solid fundamentals). How long before euphoria is replaced with reality? Now is the time to take some high-flying stock profits off the table to buy some gold - the world's best wealth insurance at the lowest prices in almost a year!
Trumponomics Will Collapse Under a Mountain of Debt -Stockman/Daily Reckoning
"Financial markets are heading straight into a perfect storm of central bank failure, bond market carnage, a worldwide recession and a spectacular fiscal bloodbath in Washington. Investors should be heading for the hills with all deliberate speed. What is going to stop Trumponomics cold is debt — roughly $64 trillion of it. That’s what is crushing the American economy, and until the mechanics of its relentless growth are stopped and reversed, the odds of achieving and sustaining the 3–4% real economic growth that Trump’s economics team is yapping about is somewhere between slim and none....But quite frankly the debt problem is a thoroughly bipartisan creation that is completely immune to the fact that the White House and both sides of Capitol Hill are now under GOP control. In fact, the nation’s debt affliction actually goes back to August 1971 when Nixon closed the gold window and launched the world on the current destructive experiment with massive central bank driven credit expansion....It’s the giant skunk in the woodpile which rebukes the whole fantastic notion currently animating the Wall Street casino that Trumponomics will unleash a powerful wave of fiscal stimulus via tax cuts and infrastructure/defense/veterans/border spending. No it won’t."
Trump Picks Goldman President Gary Cohn To Be Chief Economic Advisor -Zero Hedge
"It appears that vampire squids are quite adaptable to living inside the swamp that Trump promised to be draining. Following the appointment of former Goldman partner Mnuchin as Treasury Secretary, NBC News reports that Goldman Sachs President and COO Gary Cohn has been selected as National Economic Council Director....Goldman Sachs President, COO Gary Cohn has confirmed President-elect Trump offered him post of National Economic Council Director and assistant to president for economic policy, NBC News said, citing sources. As in the case of Hank Paulson, the question is whether this appointment enables Cohn to dump his massively overbought $210 million worth of Goldman stock tax-free? If so, Cohn just saved over $80 million on taxes just by becoming officially a part of the US administration, instead of merely running the country from the shadows."
12.8.16 - "The Bump in the Market is Artificial"
Gold last traded at $1,172 an ounce. Silver at $17.09 an ounce.
NEWS SUMMARY: Precious metal prices were steady Thursday despite a sharp dollar rally on euro weakness. U.S. stocks extended gains, touching fresh all-time highs, after ECB held rates steady.
The Gold Standard Vs. The PhD Standard -Forbes
"Jim Grant, the bow-tied voice of old-fashioned economic wisdom, likes to call today’s monetary arrangements the 'PhD Standard,' as compared, of course, to the gold standard that the United States embraced for a stretch of nearly two hundred years, until 1971....Gold serves as the best practical approximation of a standard of 'Stable Value,' a universal constant of commerce much as the kilogram or meter serve as unchanging standards of weight and length. Interest rates are left entirely to market forces. Once you choose gold, you sort of put your faith in it. It has worked in the past. Will it work in the future? We hope so. No reason why not. If it doesn’t, then we can try something else. But, that day has not yet come. Grant’s other option is the 'PhD Standard.' If you aren’t using gold, then you are putting your faith in the opinions of people bearing PhDs....Over the past century, we have had a lot of experience with the 'PhD Standard.' It has been the only game in town since 1971; and there were many examples before that time too. Unlike the gold standard, this has never worked very well."
Take a step back before you buy into the Trump rally -CNBC
"Investors should take a breather before going whole hog into the Trump stock rally. U.S. equities surged to new heights on Wednesday, with the Dow Jones Industrial Average rising by nearly 300 points to close at 19,549.62. Meanwhile, the Standard & Poor's 500 Index jumped by 29 points to close at 2,241.35. Both indices have climbed since the Trump rally kicked off after Nov. 8. But chasing these market heights isn't for the faint of heart.Financial advisors are warning investors to avoid making reactionary moves and to consider how this rapidly heating market fits in with their overall financial picture....'This bump in the market is artificial,' said Ed Slott of Ed Slott and Co. 'This isn't based on fundamentals; it's based on news.'"
What to Watch During Trump's First 100 Days -Hedge Eye
"The second Donald Trump finishes his oath of office he better have a pen handy. Congressional Republicans are getting ready to to spend the time between their swearing-in on January 3rd and the presidential inauguration January 20th passing legislation so Trump can sign legislation immediately upon taking office. Republican lawmakers want to have the ACA repeal ready for Trump as he takes office. And then pivot and immediately move on to his cabinet nominees. The action won’t stop there. Plans for tax reform, regulatory rollbacks and an infrastructure bill are all being designed for Trump’s early months as president....Now that Trump has nominated Steve Mnuchin as Treasury Secretary, the effort to roll-back Dodd-Frank will begin in earnest. Mnuchin’s primary concern? He wants to strip back the parts of the financial regulatory bill that inhibit banks from lending. He believes the rules for qualified mortgages are too restrictive and are burdensome for smaller, community banks."
India Confiscates Gold, Even Jewelry, In Raids On Hidden Money -Zero Hedge
"Global financial repression picks up steam, led by India. After declaring large denomination notes illegal, India now targets gold. It’s not just gold bars or bullion. The government has raided houses, no questions asked, confiscating jewelry....The chaos accompanying 'demonetization' hasn’t eased up noticeably. It seems likely the disruption to the economy, especially in cash-centric rural India, will hit growth sharply for at least a few quarters....US actions may cause a currency crisis, but I believe a crisis will hit elsewhere first. If I am correct, gold will be the safe haven, regardless of currency, but especially where the crisis hits."
12.7.16 - Highest Demand For Gold in 5 Years
Gold last traded at $1,177 an ounce. Silver at $17.27 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain hunting and a weaker dollar. U.S. stocks closed up despite healthcare weakness as the post-election rally continued.
U.S. Mint Sees Highest Demand For Gold Coins Since 2011 -Kitco
"The U.S. Mint is reporting another record year for coin sales and this time, it is for its gold-bullion products. Tuesday morning, the U.S. Mint announced that it had sold out of 2016 American Eagle one-ounce, quarter-ounce and tenth-ounce coins. However, one-half-ounce American Eagle and one-ounce Buffalo coins for 2016 are still available. According to the latest sales data compiled by the U.S. mint, 984,500 ounces of gold in various denominations of American Eagle coins have been sold this year, the highest sales rate since 2011 when one million ounces in gold bullion coins were sold....This is the third consecutive year the U.S. Mint has seen unprecedented demand for bullion coins."
Why Now Is a Great Time to Buy Silver -Forbes
"After making a cyclical peak at $49 an ounce in April 2011, the price of silver declined by over 70% to around $13.50 in January of this year. It subsequently recovered to just over $20 an ounce in the aftermath of the June 23 Brexit vote – with its recent decline back to the $16.50 level, I believe silver today presents a great long-term buying opportunity. Here are three reasons why I like silver for the long run. U.S. and Chinese policies are highly inflationary and will result in speculative flows into silver....Silver mine production to decline over the next several years....Global industrial fabrication demand to recover and to remain strong....As such, I expect global industrial demand for silver to rebound in 2017 and for it to embark on a structural uptrend over the next several years. Given the above reasons, I now believe silver is a solid, long-term investment."
Trump About To Preside Over New Global Financial Crisis: "Not His Fault, Merely His Misfortune" -Zero Hedge
"The warning signs have been up every mile for a long stretch now. The build up of pressure, and the creaking fault lines have been evident. The monetary policy has long been triggering what may prove to be an inevitable collapse....A new global financial panic will be one legacy of the Trump administration. It won’t be Trump’s fault, merely his misfortune....Since 2008, the largest banks in the world are larger in terms of gross assets, share of total deposits, and notional value of derivatives. Everything that was too-big-to-fail in 2008 is bigger and exponentially more dangerous today....In the next crisis, liquidity will come from the IMF, which has the only clean balance sheet remaining. The IMF will print the equivalent of $10 trillion in world money called special drawing rights. China and Russia will acquiesce in this liquidity injection provided it hastens the demise of the dollar as the benchmark global reserve currency."
Donald Trump: Person of the Year -TIME
"This is the 90th time we have named the person who had the greatest influence, for better or worse, on the events of the year. So which is it this year: Better or worse?....For those who believe this is all for the better, Trump’s victory represents a long-overdue rebuke to an entrenched and arrogant governing class; for those who see it as for the worse, the destruction extends to cherished norms of civility and discourse, a politics poisoned by vile streams of racism, sexism, nativism. To his believers, he delivers change—broad, deep, historic change, not modest measures doled out in Dixie cups; to his detractors, he inspires fear both for what he may do and what may be done in his name....The year 2016 was the year of his rise; 2017 will be the year of his rule, and like all newly elected leaders, he has a chance to fulfill promises and defy expectations."
Trader makes a bold bullish play on gold -CNBC
"It's high time to bet on a big gold bounce, according to one chart-minded trader. The yellow metal has slid post-election as the dollar has risen and as investor anxiety has declined. But while a widely anticipated Federal Reserve rate increase could be expected to hurt gold, the announcement may actually boost gold, according to Todd Gordon of TradingAnalysis.com. 'If the Fed hikes, and they most likely will, and don't deliver any sort of concrete information as to when they're going to hike again, you could see the dollar sell off and the gold market rally,' Gordon said Tuesday on CNBC's 'Trading Nation.'"
12.6.16 - Wanted: A New Fed Leader
Gold last traded at $1,170 an ounce. Silver at $16.81 an ounce.
NEWS SUMMARY: Precious metal prices steadied Tuesday on bargain hunting despite a dollar rebound. U.S. stocks traded near flat line as investors digested geopolitical events and the Fed meeting outcome next week.
Spain Joins World War On Cash -Cointelegraph
"Spain has entered the war on cash. According to El Mundo, the government plans to enforce a cash limit of 1,000 euros. The Spanish government says the ban comes amid a push to combat tax fraud and lower its deficit as per a directive put forth by the EU. The directive also outlines an immediate registration of tax information for about 80 percent of the population and a tightening of controls on deferred payments. The government claims this will limit the need to raise taxes. Other EU countries already have similar cash limits in effect. Notably low countries being Portugal with a maximum of 1,000 euros, Greece with 1,500 euros, Italy with 999,99 euros and Belgium with 3000 euros. This war on cash has also been seen globally, with notable examples being India abolishing its two biggest notes overnight and movements in the U.S. pushing for a ban of $50 and $100 bills."
Cash is under attack from multiple entities - government, banks and technology. As we explained in our 2014 book, Don't Bank On It! Use of cash could get you branded as a criminal. Capital controls are already being put in place to prevent bank runs. Get the full story in our 12-page White Paper: The Secret War on Cash.
The Fed Needs A New Leader--And New Policies, Too -Steve Forbes
"Donald Trump took several shots at the Federal Reserve during his election campaign. Let's hope he effects a real overhaul of this increasingly destructive agency. Fed boss Janet Yellen's recent appearance before the Joint Economic Committee underscores why a major makeover is necessary for our future prosperity. Yellen openly and unapologetically made clear that our central bank still hews to the discredited theory that prosperity causes inflation....Yellen confuses changes in prices that come in response to supply and demand in the marketplace with movements in prices that result from changes in the value of the dollar. It's the dollar changes that wreak havoc....What should Trump do? Push the Fed to let the markets set interest rates....Trump should also fire Janet Yellen. She told Congress she will finish her term, which expires in February 2018, and implied that Trump can't remove her. She should do her homework. Our central bank fought the Treasury Department twice in the late 1940s and early 1950s, and both times the Fed head was axed. Fantasies and pretensions to the contrary, the Federal Reserve is not an independent branch of government enshrined in the Constitution."
Gold Sell-Off: How Low Can It Go? -Hedge Eye
"The market is currently pricing in a goldilocks scenario of stronger economic growth, stable inflation and partial normalization of interest rates. This has put upward pressure on the U.S. Dollar and downward pressure on gold prices....In our view, even under the most optimistic outlook, the Fed will not be able to raise rates to levels that would push gold significantly lower over the long run. Since the recent US elections gold prices in USD have sold off 7% and prices are down 13% from the year's highs. This has led some market commentators to declare this as a turning point in the renewed upward trend in gold prices that began last year....What the election result has really changed is business confidence....This might last for a while, keeping downward pressure on gold price. But eventually it will become clear current rate path predictions are still overshooting the more probable reality."
Indian Prime Minister's Shake Down of Private Wealth -Reason
"Indian Prime Minister Narendra Modi stunned his country earlier this month when, out of the blue, he declared 85 percent of the nation's currency notes null and void....The theory with Modi's new scheme is that rich hoarders of illicit cash would simply forfeit their money rather than risk jail. Meanwhile, middle-class folks who work for legitimate businesses and poor laborers who have small cash savings would be free to legally swap old bills for new. The reality is different. Yes, the rich have indeed gotten poorer. But the poor have been decimated. Call it trickle-down poverty....Modi hatched his scheme in complete secrecy, without consulting his own economic advisers or the Parliament, lest rich hoarders catch wind and ditch their cash holdings for gold and other assets....But the biggest tragedy of Modi's demonetization scheme is that because it does nothing to eliminate the underlying causes of black money - India's tax burden that includes hidden levies such as bribes to bureaucrats - won't disappear. People will simply park less of it in cash and more in harder-to-trace, non-cash assets such as gold and real estate, which already account for almost 60 percent of household savings. (Poor households have taken to buying jars of Tide to barter for goods and services, giving new meaning to the term money laundering.)"
12.5.16 - Is This the End of the EU?
Gold last traded at $1,176 an ounce. Silver at $16.90 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Monday as the dollar whipsawed higher then lower following Italian "no" vote. U.S. stocks traded higher, unfazed by a key vote in Italy which led to Prime Minister Renzi's resignation.
Italy Sinks Into Political Limbo as Defeat Sweeps Renzi Away -Bloomberg
"Italy fell into political limbo after Prime Minister Matteo Renzi announced his resignation, with rival parties jockeying to fill the power vacuum following his crushing defeat in a constitutional referendum. Financial markets reversed an initial sell-off as investors came to terms with Renzi’s impending departure. The premier is preparing to hand in his resignation to President Sergio Mattarella on Monday afternoon having signaled that he won’t stay on to help stabilize a caretaker administration. Much of the attention remains on Banca Monte dei Paschi di Siena SpA, which is in the middle of a 5 billion-euro ($5.3 billion) capital raising and is vulnerable to government instability....'From today on, this becomes a banking story,' Megan Greene, chief economist at Manulife Asset Management, told Bloomberg Television’s Francine Lacqua."
Europe Imploding? What Italy's Referendum Means For Investors -Hedge Eye
"The mainstream media is talking about what this means for Europe. The 'no' vote was seen as a victory for the populist Five Star Movement, which led the opposition to the vote and is generally seen as anti-European Union....Meanwhile, in the Austrian presidential election, pro-E.U. Alexander Van der Bellen beat right-wing rival and Freedom Party leader Norbert Hofer....(So it wasn't all bad for leftist European leaders this morning who undoubtedly breathed a sigh of relief.) Here's Hedgeye CEO Keith McCullough in this morning's Early Look note to subscribers: 'In addition to the pathetic example of long-term leadership that the Italians have had to endure (63 governments in the last 70 years), now they’re going to have to deal with this thing called credit risk. The yield on the 10-year Italian government bond has popped 11 basis points (that’s a lot, in a day) to 2.01% this morning. While your TV is watching stocks, watch that.' In short, Europe's woes are far from over. Investors are clearly concerned about the prospects of Italy exiting the E.U."
Fed's Dudley: More stimulus could mean Fed would hike rates faster -CNBC
"More stimulus could mean the Federal Reserve would raise interest rates faster, New York Fed President William Dudley told CNBC on Monday. 'We don't know what the fiscal policy is, we don't know how big it is and we don't know when it's actually going to occur,' Dudley said in an exclusive interview on 'Squawk on the Street,' echoing prepared remarks from earlier in the day....Trump was elected on a vow to increase infrastructure spending, cut taxes, reduce government regulations, and renegotiate or halt international trade agreements. Dudley said more spending on infrastructure would actually increase the productivity capacity of the economy."
Gold Standard Approved for Islamic Finance, Opening New Market -Bloomberg
"Gold is acceptable for the first time as an investment in Islamic finance after the group that sets standards for the industry adopted Shariah-compliant rules for trading the metal. The rules approved Nov. 19 allow gold to be used in the $1.88 trillion Islamic finance business, the Accounting and Auditing Organization for Islamic Financial Institutions said Monday in a statement. The AAOIFI developed the standards with help from the producer-funded World Gold Council, which has said the new rules could spur demand for 'hundreds of tons' of gold....'We fully expect to announce imminently that GLD does qualify,' Natalie Dempster, a managing director of the World Gold Council, said at the conference. Physical gold bars and coins may also qualify, she said....'The time has come for gold instruments in Islamic finance,' Mark Mobius, executive chairman of Templeton Emerging Markets Group, said Monday in a World Gold Council report accompanying the statement."
Trump Nominates Ben Carson As Housing Secretary -Zero Hedge
"Donald Trump announced his plans early Monday to nominate Dr. Ben Carson to lead the Department of Housing and Urban Development (HUD). 'Ben Carson has a brilliant mind and is passionate about strengthening communities and families within those communities,' Trump said in a statement distributed by his transition team. 'We have talked at length about my urban renewal agenda and our message of economic revival, very much including our inner cities. Ben shares my optimism about the future of our country and is part of ensuring that this is a Presidency representing all Americans. He is a tough competitor and never gives up,' Trump added. 'I feel that I can make a significant contribution particularly by strengthening communities that are most in need,' Carson, a former GOP presidential candidate who became a Trump supporter, said in the statement."
12.2.16 - Weekend's Italian Vote Could Crush Banks
Gold last traded at $1,177 an ounce. Silver at $16.83 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain hunting, EU uncertainty and a weaker dollar. U.S. stocks traded mixed as investors digested upbeat jobs data while bracing for a key constitutional referendum in Italy on Sunday.
Why a strengthening dollar is bad for the world economy -The Economist
"The world’s most important currency is flexing its muscles. In the three weeks following Donald Trump’s victory in America’s presidential elections, the dollar had one of its sharpest rises ever against a basket of rich-country peers. It is now 40% above its lows in 2011....America’s ten-year bond yield has risen to 2.3%, from almost 1.7% on election night....There are lurking dangers in a stronger dollar for America, too. The trade deficit will widen as a strong currency squeezes exports and sucks in imports. In the Reagan era a soaring deficit stoked protectionism.....If Mr Trump succumbs to his protectionist instincts, the consequences would be disastrous for all....Stock markets in America have rallied on the prospect of stronger growth. They are being too cavalier. The global economy is weak and the dollar’s muscle will enfeeble it further."
The Next Crisis Will Be Very Inflationary -Craig R. Smith/SATC
"If President-elect Trump gets just half of the infrastructure spending he is proposing - along with tax cuts - we will see a run up of another $5-6 trillion in debt. This will cause huge inflation as more money is in peoples' pocket from the tax cuts and the jobs created start to fill the economy. Of course none of this is applicable until after Jan 21, 2017 and even then it may take a year or more. I am of the belief the next crisis - unlike the 2008 crisis - will be very inflationary. That inflation will allow debt to be paid off with inflated dollars at a discount. Inflation affects people in a way that, 'not one in a million can diagnose until its too late'. It will look like the honest way, but will take from people who have left their money in currencies that lose value ie: the dollar. Leaders like Mr. Trump, who don't believe in paper but in things like real estate, gold, etc., are comfortable with the tool of inflation because they understand it. Frankly, America needs a healthy dose of inflation...IF you have your money in things, not paper."
How December 4 Could Trigger the “Most Violent Economic Shock in History” -International Man
"I walked through Piazzale Loreto during a recent trip to Italy, which is suffering its worst economic downturn since 1945. And I realized that Italians are angrier now than they’ve been since they hung Il Duce up by his heels. Italy has had no productive growth since 1999. Real GDP per person is smaller than it was at the turn of the century. That’s almost two decades of economic stagnation. By any measure, the Italian economy is in a deep depression. And things will probably get much worse. The Financial Times recently put it this way: 'An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period.'....On December 4, Italian Prime Minister Matteo Renzi’s current pro-EU government is holding a referendum on changing Italy’s constitution....A 'No' vote is a chance for the average Italian to give the finger to EU bureaucrats in Brussels. Given the intense anger Italians feel right now, it’s very likely they’ll do just that."
Italian Banks Flirt With Disaster Again as Renzi Teeters -Bloomberg
"They’re burdened with a mountain of bad loans. Their stocks have cratered. And they have to operate in an economy prone to recession and political upheaval. Signs have been mounting for months that Italy’s weakest lenders, and in particular Banca Monte dei Paschi di Siena SpA, were sliding toward the precipice, threatening to reignite a broader crisis....The wild card is Monte Paschi itself, an institution that’s become a byword for the troubles that have long plagued Italian finance. Undermined by derivatives deals that hid losses, the lender has received 4 billion euros in taxpayer-funded bailouts and 8 billion euros from investors since 2009. Now Italy’s third-biggest lender is back for more. More than a third of its loan book has soured and its shares have fallen 83 percent this year."
Payrolls Rise 178K As Unemployment Rate Tumbles To 4.6% But Average Hourly Earnings Worst Since 2014 -Zero Hedge
"While the headline November payrolls print came in almost on top of expectations at 178K, vs consensus of 180K there were two big surprises in today's report, one being the unemployment rate which plunged from 4.9% to 4.6%, well below the 4.9% expected, but the biggest negative surprise was that the Average hourly earnings in November dropped by 0.1%, far below last month's 0.4% rise, and below the 0.2% expected....In November, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent."
12.1.16 - Lower Prices Trigger China Gold Rush
Gold last traded at $1,169 an ounce. Silver at $16.51 an ounce.
NEWS SUMMARY: Precious metal prices steadied Thursday as bargain hunting offset speculative selling on a weaker dollar. U.S. stocks traded mixed as investors digested economic data, oil prices rose another 3% based on promised OPEC production cuts.
China Curbs Gold Imports To Slow Capital Flight -Zero Hedge
"While all eyes were on India (as rumors swirled of an imminent gold import ban), The Financial Times reports that China curbed gold imports in the wake of government attempts to clamp down on capital leaving the country, according to traders and bankers....'The limits on imports bite as the weakening renminbi raises Chinese investors’ interest in gold. Lower gold prices have also triggered more buying. The combination of tighter quotas and an uptick in demand caused the premium for gold in China over the international gold price to jump as high as $46 in the past few weeks, according to data from Wind Information. Normal levels are about $2 to $4.'....If the restrictions on imports are sustained that could raise questions about China’s moves to open its gold market to international traders. The world’s largest consumer of the precious metal has moved to have a greater voice over the price of gold."
Physical gold offers the simplest form of protection from rising inflation - which causes the buying power of paper currencies to evaporate. History is full of examples of the sudden and crushing impact of runaway inflation such as; Venezuela, Argentina, Zimbabwe and Weimar, Germany. Owning physical gold serves as wealth insurance. Discover The Timeless Truth About Gold & Silver.
OPEC's Toothless Deal to "Cut" Oil Production -HedgeEye
"Oil prices have surged over 10% since OPEC announced a deal to 'cut' oil production. We'll get to the complete nonsense of it all below. For the record, the 14-member country oil cartel controls one-third of global oil production and sits on 80% of global crude reserves....OPEC has had virtually no impact on how much oil its members produce. While it sets quotas, its member countries cheated about 96% of the time from 1982 to 2009. That's according to a study by Brown University professor Jeff Colgan....Bottom Line: This OPEC 'deal' pays lip service to a cut in oil production. History strongly suggests this is yet another toothless OPEC commitment that won't be honored."
Mobs Lock Up Bankers during India's Cash Chaos -Bloomberg
"Bankers are bracing for long hours and angry mobs as pay day approaches in India, the first test for Prime Minister Narendra Modi’s move to invalidate almost all cash in circulation. ‘Already people who are frustrated are locking branches from outside in Uttar Pradesh, Bihar and Tamil Nadu and abusing staff as enough cash is not available,’ said CH Venkatachalam, general secretary of the All India Bank Employees’ Association. The group has sought police protection at bank branches for the next 10 days, he added. He estimates that about 20 million people -- almost twice the population of Greece -- will queue up at bank branches and ATMs over the coming week, when most employers in India pay their staff. In an economy where 98 percent of consumer payments are in cash, banks are functioning with about half the amount of currency they need....Withdrawals are capped at 10,000 rupees per person instead of the 24,000 rupees limit set by the government, said a manager at a state-run Bank of India branch in the eastern state of Jharkhand.”
Trump Is Right On The Money But Some Of His Transition Team Are Not -Benko/Forbes
"The presidential transition has been going very well. The transition team is composed of impressive, high proficiency, high integrity people....Politico has provided the world with an organization chart of the presidential transition team. The org chart presents the presidential team leader on economic issues as David Malpass, with Bill Walton (who I count as a friend and admire) as deputy....Malpass makes a wonderful aspirational statement to the Wall Street Journal: 'We need monetary integrity. We need to have a situation where the U.S. dollar is a trustworthy currency. I would like to see the world’s most trustworthy currency.' Bravo! That said, how to create the world’s most trustworthy currency? Charles de Gaulle summed it up beautifully: '[Gold] is eternally and universally accepted as the unalterable fiduciary value par excellence.' That really describes something worthy of being the world’s most trustworthy currency. Trump hints that he may share De Gaulle’s insight....You just can’t make America great again without a dollar as good as gold."
In Money, Morality, & the Machine, Craig Smith and Lowell Ponte argue that in an era of 'elastic money,' society has become debased and greed has triumphed; yet there is a growing hope that President-elect Trump can turn things around by considering a return to a Gold Standard. Meanwhile, citizens can establish their own personal gold standard by converting elastic money into hard money.
What Will Donald Trump’s Presidency Mean for the Dollar? -Tamny/Liberty Law
"The world would be a much better place if economists, politicians and pundits had this line from Henry Hazlitt memorized: 'What is harmful or disastrous to an individual must be equally harmful of disastrous to the collection of individuals that make up a nation.'....When an economy is broken down to the individual, what might seem opaque becomes very clear. Figure that no individual is made better off by a bigger income-tax bill; no individual is able to create more wealth if more and more work hours are spent complying with regulators; no individual is made wealthier if tariffs block the world’s talented from serving his needs; and no individual is able to amass more wealth if the dollar earned is constantly being devalued....Get the four basics right and the economy soars. Get even one wrong, and growth is hampered....A weak dollar is a major antagonist of the individuals who comprise the economy, not to mention of the investment that makes each individual more productive. What’s unknown is where Trump will come down on this question. His protectionist leanings should have those in favor of good money scared, along with his oft-expressed view during the campaign that currency devaluation is the path to prosperity....Time will tell if Steven Mnuchin mimics fellow Goldman Sachs alum Robert Rubin’s strong dollar leanings, or if he’ll talk down the dollar. The Trump presidency could pivot based on Mnuchin’s stance. If he talks down the dollar, he’ll be talking down the very investment necessary for a booming economy."