2.13.17 - Wall Street Sounding An Alarm
Gold last traded at $1,225 an ounce. Silver at $17.82 an ounce.
NEWS SUMMARY: Precious metal prices slipped Monday on profit-taking and U.S. dollar strength. U.S. stocks rose to fresh record highs as investors remained bullish on President Trump's economic agenda.
Some of the smartest minds on Wall Street are sounding the alarm on the Trump bump -BusinessInsider
"US stocks have had a good run since the election of Donald Trump....But the speed and scale of the rally - and the realization that Trump's policies aren't just good news for investors - has several influential voices in the market sounding the alarm. Comments from the White House on issues ranging from currency devaluation to border taxes have put the market on edge. Worry about inflation is emerging, too, and there's also concern about the overheated valuations on stocks....The primary concern among investors is that nothing is going to be as smooth as stock market valuations currently reflect, with investors overlooking the effects of border taxes and trade restrictions on profit margins and global economic growth....A pickup in inflation spells bad news for the bond market, as it means the Federal Reserve may be forced to lift rates more quickly than expected, crushing investors who bought bonds in the period of extremely low interest rates....Then there is China. Much of the world is focused on what Trump says, does, and tweets, but the Asian giant remains a key risk."
Craig Smith Comment: I believe most Americans hope Mr. Trump’s new initiatives will boost job growth, reduce taxes and stimulate the economy. But in 2017, it's wise to hedge against the unexpected. Financial markets do not forgive debt or mistakes. Mispriced markets ultimately correct - regardless of who is in the White House. Full story
Investors are snapping up gold. Here's why -Shell/USAToday
"Gold, the yellow metal Wall Street normally flocks to in tough economic times, is shining bright at a three-month high, despite record stock prices and improving economies around the globe. So what’s spooking investors enough to push gold up in price five of the past six weeks...? Here’s a short checklist: Economic policy uncertainty in the U.S. under President Trump. Political anxiety surrounding the populist movement in Europe and elsewhere. Ongoing stimulus from global central bankers. Angst over rising inflation. The U.S. dollar falling in value versus foreign currencies....Higher inflation expectations, which is a threat to financial assets like bonds, is also giving gold a lift, adds Fawad Razaqzada, technical analyst at FOREX.com. Gold, Razaqzada adds, would likely surge higher if the stock market, currently near record highs, were to suffer a decline of a big enough magnitude to add to the fear level on Wall Street."
For additional insights on the many factors which are driving the gold bull market of 2017, please request a free copy of our 2017 Gold Report - Early Edition
America’s Biggest Creditors Dump Treasuries in Warning to Trump -Bloomberg
"In the age of Trump, America’s biggest foreign creditors are suddenly having second thoughts about financing the U.S. government. In Japan, the largest holder of Treasuries, investors culled their stakes in December by the most in almost four years, the Ministry of Finance’s most recent figures show. What’s striking is the selling has persisted at a time when going abroad has rarely been so attractive. And it’s not just the Japanese. Across the world, foreigners are pulling back from U.S. debt like never before. From Tokyo to Beijing and London, the consensus is clear: few overseas investors want to step into the $13.9 trillion U.S. Treasury market right now....Combined with the unpredictability of Trump’s tweet storms, interest-rate increases in the U.S. could further sap overseas demand. Mark Dowding, who helps oversees about $50 billion as co-head of investment-grade debt at BlueBay Asset Management in London, says the firm has already moved to insulate itself from further losses due to higher rates."
Are We Prepared For the Next Financial Crisis? -Samuelson/RealClearMarkets
"Comes now Timothy Geithner, treasury secretary from 2009 to 2013, to tell you that much of what you 'know' about Dodd-Frank - Congress’s response to the 2008-2009 financial crisis - is wrong....Proposition No. 1: A financial crisis 'is certain at some point' - we just don’t know when and how bad. Conditions change....Proposition No. 2: A true crisis is 'not self-correcting.' Most declines in markets (for stocks, bonds, loans) are self-limiting. Prices drop to levels that buyers think are a bargain. Not so with a panic....Proposition No. 3: In a panic, only the federal government can mobilize the needed financial resources 'to preserve the functioning of the credit system necessary for economic recovery.'....Proposition No. 4: Despite this, Dodd-Frank has crippled government’s ability to defuse future financial crises....The real Dodd-Frank scandal is that this misinterpretation of events, widely embraced by both parties, has been allowed to stand."
2.10.17 - Cash No Longer King?
Gold last traded at $1,235 an ounce. Silver at $17.97 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying and a flat dollar. U.S. stocks extended gains amid upbeat tax reform momentum and rising energy prices.
Arizona Business Owner Reacts to Proposed Trump Tax Cuts -Fox News
According to Kevin Brady (R-TX) tax reform is going to happen this year. Craig Smith tells Fox News host Neil Cavuto that he believes if U.S. corporate tax rates are lowered from 35% - the highest in the world - down to 15-20%, corporations from around the world will want to move to the U.S. Mr. Smith believes both JFK and Reagan proved that supply-side economics and free market economics can get an economy growing. Watch the interview...
Cash No Longer King: Europe Accelerates Move To Begin Elimination Of Paper Money -Zero Hedge
"In the shadow of Donald Trump’s spree of controversial actions, the European commission has quietly launched the next offensive in the war on cash. These unelected bureaucrats have boldly asserted their intention to crack down on paper transactions across the E.U. and solidify a trend that has been gaining momentum for years. The financial uncertainty amplified by Brexit has incentivized governments throughout Europe to seize further control over their banking systems. France and Spain have already criminalized cash transactions above a certain limit, but now the commission has unilaterally established new regulations that will affect the entire union. The fear of physical money flowing out of the trade bloc has manifested a draconian response from the State. Negative interest rates and high inflation are a deadly combination that could further destabilize the already fragile union in the future. With less physical currency circulating, these trends ensure that the impact of any additional central bank policies will be maximized. If economic conditions deteriorate, the threat of citizens pulling cash out of their accounts and starting a bank run is eliminated in a cashless system....Since the public’s attention has been drawn to emotional manipulations and political stunts, the threat the war on cash represents has gone unrecognized....The value of advocating for decentralized and physical alternatives to the banking system may not be easily grasped by the activists of today, but few other things have the potential to erode freedom on such a massive scale."
Today cash is under attack from all sides - government, banks, technology and anti-free market economists. As we explained in our 2014 book, Don't Bank On It! the use of cash today 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 FREE 12-page White Paper: The Secret War on Cash.
Gold’s Crazy Secret -Daily Reckoning
"Let’s talk about gold. But not in any way you’ve likely read about ever before. You know everything there is to know already, right? That gold has been real 'money' for all of human history…That Gold is scarce; it has unmistakable properties; and it does not rust, wear out or fade…That even in today’s crazy Trump market, gold is one of the only 'safe-haven' assets. But forget about what you know about gold right now. Because gold has the potential to do much more than just protect wealth…That’s because its unique properties extend way beyond what’s obvious to the naked eye. In this particular industry, gold will create wealth… and make investors rich. The industry I’m talking about is biotechnology. Believe it or not, gold is an excellent delivery vehicle for a variety of biotech-related applications, since it has the ability to take up and hold proteins on its surface. It can carry everything from genes to stem cells. As a plus, gold isn’t rejected by the human body. Because of this, gold could be revolutionary in the treatment of disease."
U.S. Consumer Sentiment Cooled in February on Views of Finances -Bloomberg
"Consumer confidence retreated in February from a 13-year high, as Americans tempered expectations of their finances and the economy....Expectations for wage gains in the coming year deteriorated even as more respondents said this month that they were better off financially than at any other time in the past 12 years. More than half of those surveyed expect better economic conditions in the future, though the results reflected stark differences between Republicans and Democrats....Interest rates were expected to increase by three out of four consumers, the highest share in a decade....Consumers projected the inflation rate in the next year will be 2.8 percent, up from 2.6 percent in the prior month’s survey."
2.9.17 - Markets Cheer Trump Tax Reform
Gold last traded at $1,236 an ounce. Silver at $17.74 an ounce.
NEWS SUMMARY: Precious metal prices eased back Thursday on mild profit-taking and a firmer dollar. U.S. stocks rose on speculation about President Trump's promise of soon-to-be-released tax reform proposals.
Stanley Druckenmiller seems poised to make a killing on gold -Marketwatch
"Remember Stanley Druckenmiller? He’s the hedge-fund titan who dumped his holdings of gold the night before Donald Trump was elected president. Well, Druckenmiller is back and now he’s bullish on the yellow metal, and that may be a telling piece of news for investors making bets that the Dow Jones Industrial Average, S&P 500 index and the Nasdaq Composite Index will continue to maintain cruising altitude in record territory. In a Bloomberg interview on Tuesday, Druckenmiller said he dipped back into gold in December and January. His rationale is fairly simple. 'I wanted to own some currency and no country wants its currency to strengthen,' He continued: 'Gold was down a lot, so I bought it.' In fact, gold, viewed as a haven asset which often trades in the opposite direction of equities, has been on an upswing lately. Gold futures have climbed 2.8% in February and have gained about 7.9% year to date, according to FactSet data."
Trump Says He Will Announce "Something Phenomenal On Taxes In Next 2-3 Weeks" - Market Turmoils -Zero Hedge
"After a few hours of relative calm, President Trump has injected some renewed chaos into capital markets this mornings after comments that he will release "something phenomenal on taxes in the next 2-3 weeks" among other things...'We are going to be announcing something over the next two or three weeks that will be phenomenal in terms of tax,' President Trump says in meeting with airline CEOs. USD spiked, bonds dumped, and gold dropped...And USDJPY and Stocks are soaring..."
Dollar jumps as Trump announces forthcoming 'phenomenal' tax plan -Reuters
"The dollar surged more than 1 percent against the yen and rose broadly on Thursday after comments from U.S. President Donald Trump that he would be releasing his 'phenomenal' tax plan in the next few weeks. Investors have been waiting impatiently for details on Trump's campaign trail pledges to inject the U.S. economy with large-scale fiscal stimulus through additional spending and tax cuts. Trump said his administration will be announcing 'something phenomenal in terms of tax' over 'the next two or three weeks' during a meeting with airline executives on Thursday....The dollar gained more than 5 percent against a basket of major currencies in the month and a half after Trump's election but has been on a decidedly downward turn since the new year began as Trump has focused more on trade and immigration than fiscal stimulus."
Study Finds Most Government Workers Could be Replaced by Robots -HeatStreet
"A study by a British think tank, Reform, says that 90% of British civil service workers have jobs so pointless, they could easily be replaced by robots, saving the government around $8 billion per year. The study, published this week, says that robots are “'more efficient' at collecting data, processing paperwork, and doing the routine tasks that now fall to low-level government employees. Even nurses and doctors, who are government employees in the UK, could be relieved of some duties by mechanical assistants. There are 'few complex roles' in civil service, it seems, that require a human being to handle. 'Twenty percent of public-sector workers hold strategic, ‘cognitive’ roles,' Reform’s press release on the study says....Reform suggests that government employees should probably look into opportunities presented by the 'sharing economy,' like driving for Uber – at least until robots replace those, too."
2.8.17 - Preparing for Market Surprises
Gold last traded at $1,239 an ounce. Silver at $17.70 an ounce.
NEWS SUMMARY: Precious metal prices touched 3-month highs Wednesday on a weaker dollar and political uncertainty. U.S. stocks drifted lower led by financials and energy price volatility.
Be Prepared for Surprises -Craig R. Smith/CBN
"In his first days, Trump has hurried to make major policy changes he thinks are needed to get the U.S. economy growing again. Last month we witnessed a frenzy over the Dow topping 20,000. But what will February bring?....Since 1999, the Dow has doubled from 10,000 to 20,000, but gold prices have risen nearly fivefold, from $260/oz. to about $1,200/oz. So far this year, stocks are even and trending downward, while gold prices are up over 5% and trending upward. Make sure the trend is your friend. I believe most Americans hope Mr. Trump’s new initiatives will boost job growth, reduce taxes and stimulate the economy. But in 2017, it's wise to hedge against the unexpected. Financial markets do not forgive debt or mistakes. Mispriced markets ultimately correct - regardless of who is in the White House." Full story
Use This Gold Chart to Bank 20% Gains -Daily Reckoning
"During the first six weeks of 2016, gold soared 17%. These gains approached an incredible 27% by July, capping an epic comeback in the forgotten precious metals sector. Right now, we’re seeing this exact pattern shaping up to begin 2017. If this relationship holds true, double-digit gold gains are headed your way over the next several weeks....We’ve noticed a curious development in gold so far this year. Gold’s advance for the first six weeks of 2017 has perfectly mirrored the action we witnessed during the first six weeks of 2016....If gold continues to mirror its 2016 advance this year, we’re in for a strong month that could deliver double-digit gains before spring arrives."
Trump Can Succeed On Trade By Ending Global Currency Manipulation -Gilder/The Federalist
"What we call a crisis of trade is really a scandal of money....According to the latest figures from the Bank of International Settlements in Basel, Switzerland, foreign exchange trading is now some $5.1 trillion dollars a day - 25 times global GDP. For example, take the matter of NAFTA, repeatedly denounced as a 'horrible deal' by candidate Trump. He was right. The problem was not its specific terms, however, but the preposterous movements of monetary values in its wake that rendered the entire agreement a capricious charade....How Can We Fix the Broken System?....So long as central banks possess the power to change currency values virtually at will, free trade cannot be either fair or efficient....As a step toward restoration of this constitutional regime, a key early measure of the Trump administration should be an executive order requiring equal treatment of gold, silver, and dollars as money as the Constitution provides....This short-term restoration of the rules of constitutional money should be combined with a strategic plan for monetary reform throughout the world economy....Rather than conducting a trade war with China, Russia, Japan and Europe, the U.S. can launch a new monetary conference to bring them all into a new monetary regime. Modeled on the Bretton Woods Agreement in 1944 for a post-war dollar standard disciplined by a tie to gold, such a new initiative could rescue the global environment from a trend toward economic conflict to a path toward monetary cooperation and reconciliation....The best way to obviate both inflation and deflation is a global agreement to tie currencies to gold in the spirit of Bretton Woods....The Trump administration should test this economic dogma by making this $5.1 trillion-dollar-a-day industry face competition from the fixed exchange rates that throughout history have accompanied the eras of most impressive economic progress and prosperity."
Why India's War on Cash Is a Warning to the U.S. -TheStreet
"India's economy crumbled in just weeks, all because of a misguided war on cash. This should be a lesson to anyone pushing for a cashless society....The motivation for Modi's cash grab was to stamp out corruption and other criminality. That's pretty much the stated reason that people in the U.S say they want to eliminate hundred-dollar bills. They want to crack down on illegal activity. Will the U.S. have more success than India? Possibly, but the move, if it comes, will not be without consequences....In the simplest terms, private money will be created that suits the market place better than government-controlled money that lacks privacy....For investors, any move toward banning large bills would likely lift prices for Bitcoin Investment Trust, which holds bitcoin, and similar alternative currencies. Likewise, expect gold prices to rise, too..."
2.7.17 - President Trump Boosting Gold
Gold last traded at $1,236 an ounce. Silver at $17.75 an ounce.
NEWS SUMMARY: Precious metal prices steadied near 3-month highs Tuesday despite a stronger dollar. U.S. stocks traded mixed amid corporate earnings, a rising trade deficit and falling oil prices.
Donald Trump has gold moving higher — and it's probably not done climbing -CNBC
"The man who built gold towers is now driving up the price of gold because of the uncertainty he brings to the White House. Gold futures prices hit a more-than-two-month high Monday, and they're set to elevate further. 'It's looking the best it's looked in several months, from a technical perspective anyway,' said Jim Wyckoff, senior analyst at Kitco. 'We could see $100 more on the upside easily.' President Donald Trump's trade and currency comments have driven investors to seek safety in the metal. That trade got another boost Monday after Trump said Sunday that the effort to dismantle - and replace - Obamacare could take until 2018, raising concerns that his entire agenda is now being pushed back....Trump has taken some of the wind out of the dollar recently, and the market is also adjusting to a new U.S. stance on the currency. Both he and Treasury secretary nominee Steve Mnuchin have said the dollar is too strong."
As we cover in our 2017 Gold Report - Early Edition ... there is perhaps no better moment in time to diversify assets into the enduring value of the world’s oldest form of money than now.
Multi-Billionaire Stanley Druckenmiller Just Bought Back His Entire Gold Position! -KingWorldNews
"Today King World News is pleased to be the first news outlet in the world reporting that hedge fund legend Stanley Druckenmiller, who now manages his own $4.7 billion fortune, just bought back his entire gold position after selling it on the night of Trump’s victory as President of the United States. When it was reported that Druckenmiller had sold his entire gold position on the night of Trump’s win, it sent shockwaves through the gold market. From one of Bill Fleckenstein’s readers: 'On Wednesday I had the opportunity to hear Stan Druckenmiller speak at Purdue University....He (Druckenmiller) said he was long gold and short stocks going into the election as he thought Hillary would win and we would get higher taxes and more regulation which he viewed as negative. When it became clear that evening that Trump was going to win and gold was up big and equities were down big, he sold his gold and got long stocks....It will be very interesting to see what happens to the price of gold in the coming days."
"If All Is Well, Why Are Billionaires Buying Gold?" asked Swiss America CEO Dean Heskin last May ... "Last year legendary hedge fund manager Stanley Druckenmiller placed over $323 million into gold. 'Some regard it as a metal, we regard it as a currency, and it remains our largest currency allocation,' said Mr. Druckenmiller."
Arizona Committee Passes Bill to Support Sound Money -TenthAmendmentCenter
"An Arizona bill that would eliminate state capital gains taxes on gold and silver specie, and encourage its use as currency, passed an important House committee today. Final approval of the legislation would help undermine the Federal Reserve’s monopoly on money. In effect, passage of the bill would 'legalize the Constitution' by treating gold and silver specie as money. HB2014 passed the House Ways and Means Committee by a 5-0 vote, with four members abstaining. Under current Arizona law, gold and silver are subject to capital gains tax when exchanged for Federal Reserve notes, or when used in barter transactions. If the purchasing power of the Federal Reserve note has decreased due to inflation, the metals’ nominal dollar value generally rises and that triggers a 'gain.' In most cases, of course, the capital gain is purely fictional. But these 'gains' are still taxed - thus unfairly punishing people using precious metals as money."
Be Prepared for a Bear Market -Bloomberg
"Every day since President Donald Trump took office seems to bring a new political shock, so you might be surprised to learn that the stock market is just shy of all-time highs. The new president may be unpredictable, but that volatility has yet to spill over into the financial markets. But remember, regardless of the president, there’s a high probability that investors will see a bear market during a commander in chief’s time in office....It’s no fun worrying about bear markets when we are close to all-time highs, but we should prepare for a downturn before it occurs, not after it’s already underway....On average, bear markets last almost one year, and stocks fell almost 30 percent....Assuming you are a long-term investor, you need to have other asset classes to keep you afloat and sane during these severe market downturns."
2.6.17 - The New IRS Travel Ban?
Gold last traded at $1,232 an ounce. Silver at $17.69 an ounce.
NEWS SUMMARY: Precious metal prices rose near 3-month highs on safe-haven buying despite a firmer dollar. U.S. stocks drifted lower amid ongoing Trump policy worries.
Gold hits highest since November, politics and dollar boost -Reuters
"Gold climbed on Monday to its highest in nearly three months as worries about the political landscape in the United States and Europe and a subdued dollar reinforced investor interest. Political uncertainty in the United States has been fueled by President Donald Trump's policies, the most controversial of which is a temporary ban on immigrants from seven mostly Muslim countries. A U.S. judge put a nationwide block on Trump's order on Friday....'The initial euphoria of the Trump presidency seems to be fading and the elections in Europe are making people nervous. The uncertainty does mean upside for prices,' said Warren Patterson, commodities strategist at ING."
For additional insights on the many factors which are driving the gold bull market of 2017, please request a free copy of our 2017 Gold Report - Early Edition
Another Travel Ban: IRS Moves To Revoke Passports For Unpaid Taxes -Forbes
"President Trump's executive order on travel may be generating big protests, but an IRS missive on travel and passports may not go down too well either. More than a year ago, in H.R.22, Congress gave the IRS a new weapon to collect taxes. Tax code Section 7345 is labeled, 'Revocation or Denial of Passport in Case of Certain Tax Delinquencies.' The law isn't limited to criminal tax cases, or even cases where the IRS thinks you are trying to flee. The idea of the law is to use travel as a way to enforce tax collections. It was proposed and rejected in 2012. But by late 2015, Congress passed it and President Obama signed it. Now, over a year later, the IRS has finally released new details on its website. If you have seriously delinquent tax debt, IRS can notify the State Department. The State Department generally will not issue or renew a passport after receiving certification from the IRS. The IRS has not yet started certifying tax debt to the State Department. The IRS says certifications will begin in early 2017, and the IRS website will be updated to indicate when this process has been implemented."
Liberals AND Conservatives Prepare for Disaster, Escape -PontificationBlog
"'Some of America’s richest people are spending billions quietly preparing for a global Apocalypse,' reported the U.K. Daily Mail days ago. 'What do they know that the rest of us don’t?' These people include rightists and leftists....A sudden passion for acquiring survivalist guns, grub and gold has, surprisingly, swept over liberals....President Trump, meanwhile, is using carrots and sticks - tax and regulation cuts as well as tariffs - to persuade companies to bring investment and jobs to America, even as some of our richest citizens are preparing to flee abroad. 'Is the wall only to keep illegals out, or is it also to keep the rich in?' asks veteran think tank futurist Lowell Ponte....'A rich American might own a protected estate in New Zealand, but the IRS can instantly turn off his passport and keep him here until he pays a potentially huge amount of money to buy his freedom,' says Ponte. [In Money, Morality, & the Machine] 'We document 19 such risks that are a trap for the unwary, and we show people how to protect themselves and their life savings.'"
Time to sell the dollar on ‘erratic’ Trump policies, J.P. Morgan says -Marketwatch
"The dollar enjoyed a strong run after Election Day, but the Trump administration has turned into a headwind for the buck and more troubles are ahead, strategists at J.P. Morgan warn. 'Dollar confidence and positioning is being eroded by erratic policy emissions from the White House,' the J.P. Morgan team said in the report. 'USD has retraced 45% of the Trump rally, but we believe risk-reward favors a deeper setback to USD vs. those pairs that have lagged, most notably JPY,' the strategists added. In fact, the dollar suffered its worst January in 30 years. That came after Trump on Jan. 17 described the dollar as 'too strong', considering where currencies like China’s yuan and Japan’s yen are trading.”
To help our readers prepare for widespread economic change under the new Trump administration in 2017, request your free copy of our newest special report, America's First 100 Days and Your Money.
2.2.17 - The Gold Bull is Back!
Gold last traded at $1,219 an ounce. Silver at $17.42 an ounce.
NEWS SUMMARY: Precious metal prices extended gains on Thursday amid political uncertainty and a weaker dollar. U.S. stocks struggled as concerns about trade partners weighed on market sentiment.
As The Dollar Plunges (Again), Gold Hits 3-Month Highs -Zero Hedge
"After the worst January in 30 years (since Reagan in 1987), the US Dollar is starting February in the same way - plunging. Now at its lowest level since Nov 11th, the greenback has almost entirely erased the post-election gains...Still we are sure stocks know what they are doing. And as the dollar fades so precious metals are bid and Gold is back above $1225 for the first time since just after the election."
The Gold Bull is Back! -Craig R. Smith/SATC
"Precious metal prices started off 2017 with a bang amid robust safe-haven buying and falling U.S. dollar. In January, gold prices rose over 5% and silver prices rushed up over 10%. Meanwhile, despite topping the 20,000 level in January, the Dow ended the month virtually flat as rising political uncertainty and trade worries tripped up the so-called Trump rally. Today more and more analysts are jumping on the gold bandwagon in 2017....There are dozens of additional reasons why buying gold near $1,200 an ounce is THE BARGAIN OF THE CENTURY. It could be the last chance to buy low-cost wealth insurance as protection against a fiat currency-based world. Full story...
For additional insight on the the gold bull market of 2017, please request a free copy of our 2017 Gold Report - Early Edition
Fed Will Be Forced to Print & Kill Dollar -John Williams/USAWatchdog
"Economist John Williams warned last year the U.S. economy never really recovered, and it was going to turn down again. That downturn happened Friday when the latest GDP figures came in below 2% growth in the fourth quarter of 2016. Williams says the economy 'contracted,' and he contends it’s going to get a lot worse before it gets better....On rising interest rates, Williams predicts, 'I think the Fed is going to suppress rates. Unfortunately, the bad economy we have now will be at least the better part of 2017. As the economy weakens, that puts renewed stress on the banking system. The Fed is going to be forced back to accommodating the solvency of the banking system. The Fed will be moving back towards the quantitative easing (money printing) that it had before. They have to save that banking system as they did back in 2008...As they do that, it will kill the dollar'....'In terms of the Fed (getting control) and the long term solvency issues, these are death knells for the dollar. Unless those are addressed, you are going to see massive selling of the dollar, a debasement of the dollar and high inflation that will lead you into hyperinflation.'"
Fed Falls Desperately Behind The Curve On U.S. Growth & Inflation -Hedge Eye
"Fed Chair Janet Yellen missed an obvious opportunity to raise interest rates at yesterday’s Fed meeting....Instead of raising rates, the Fed said 'economic conditions will evolve in a manner that will warrant only gradual increases' in interest rates and 'inflation will rise to 2 percent over the medium term.' Both of these statements are misguided...Contrary to what Yellen says, inflation is already heating up. The Consumer Price Index finally ended a 30-month streak below the Fed's 2% inflation target....To make matters worse, our proprietary leading indicator suggests year-over-year inflation to hit 3, even 4% in the first quarter of 2017. That would definitely get the Fed’s attention. They are officially behind the curve now, McCullough writes, 'we may need 4-6 rate hikes with inflation data like this.'....Yellen & Co. are falling desperately behind the curve on both U.S. growth and inflation. Then again, the Fed missed both growth slowing in 2016 and now growth accelerating in 2017. At least they're consistent."
2.1.17 - Trump Policies Boost Metals
Gold last traded at $1,208 an ounce. Silver at $17.45 an ounce.
NEWS SUMMARY: Precious metal prices continued higher Wednesday after the Fed decision to hold interest rates steady. U.S. stocks traded mixed following Fedspeak and rising uncertainty despite upbeat jobs data.
Trump Policies, Comments Send Investors Rushing Into Gold -Investors
"Gold, a big loser following Donald Trump's election, has rebounded in 2017 as the new president's policies and currency talk make precious metals attractive.... Gold futures rose 1.3% to $1,211.40 on Tuesday, with the 5.2% monthly gain the best since June. President Trump's trade and immigration policies are spurring more uncertainty. Meanwhile, Trump issued new complaints about the strong dollar, saying 'other countries take advantage of America by devaluation,' and singled out China and Japan as 'planning money markets.' Hours earlier, Trump economic advisor Peter Navarro said Germany is exploiting its trading partners by using the 'grossly undervalued' euro."
As we cover in our 2017 Gold Report - Early Edition ... there is perhaps no better moment in time to diversify assets into the enduring value of the world’s oldest form of money than now.
Trump seems bent on punishing the U.S. dollar -Marketwatch
"The dollar unraveled in January and some see more declines in its future. The greenback has enjoyed a nice bounce in the era of Donald Trump but the newly minted U.S. president appears hellbent on beating back the buck - in the short term, and at least one analyst is predicting more pain ahead for the currency. In recent weeks, political risk, namely, jawboning from the Trump administration, has rattled the U.S. unit, which coughed up 2.6% in January....The action prompted Steve Barrow, currency and fixed-income analyst at Standard Bank in a Wednesday note to forecast that the roller-coaster ride for the buck would likely end with greenback significantly lower at the end of Trump’s tenure in the White House."
The Government’s War on Money Laundering Is Causing the Wrong Kind of Casualties -Mitchell/Wordpress
"President Trump says he wants to roll back the burden of regulation. Give the morass of red tape that is strangling the economy, this is a very worthy goal. It’s also a daunting task....Simply stated, go after the red tape that imposes the highest costs while yielding the fewest benefits. And if that’s the approach, so-called anti-money laundering regulations should be on the chopping block. Banks and other financial institutions are now being forced to squander billions of dollars in order to comply with laws, rules, and red tape that require them to spy on all their customers. The ostensible purpose of AML policies is to discourage criminal behavior, but experts have concluded that this approach has been a failure....In other words, lots of costs, mostly born by poor people and poor nations, but no evidence that criminals and terrorists are being stopped. Rather than imposing lots of red tape and requiring banks to spy on everybody, it would be much better if the government followed normal rules in the fight against crime."
The -Other- “Ban” That Was Quietly Announced Last Week -Black/Sovereign Man
"Most of the world is in an uproar right now over the travel ban that Donald Trump hastily imposed late last week on citizens of seven predominantly Muslim countries. But there was another ban that was quietly proposed last week, and this one has far wider implications: a ban on cash. The European Union’s primary executive authority, known as the European Commission, issued a 'Road Map' last week to initiate continent-wide legislation against cash....It’s always the same song: cash is a tool for criminals and terrorists....This idea that criminals and terrorists only deal in bricks of cash is a pathetic fantasy regurgitated by the serially uninformed....Think about it: every time you make a deposit at your bank, that savings no longer belongs to you. It’s now the bank’s money. It’s their asset, not yours. You become an unsecured creditor of the bank with nothing more than a claim on their balance sheet, beholden to all the stupidity and shenanigans that they have a history of perpetrating."
Read more from Simon Black about the accelerating war on cash in Swiss America's 2017 newsletter, Volatility's Last Stand.
I Advise Central Banks, And I Tell Them To Buy Gold: Professor -Kitco
"Gold prices continue to benefit as investors seek safe-haven assets, and although one professor is not a ‘wild bull’ on the metal, he remains fairly optimistic. 'If I was advising a central bank, which I do, the recommendation is buy,' Steve Hanke, professor of Applied Economics at the Johns Hopkins University and a known trader, told Kitco News in a phone conversation Tuesday. 'Uncertainty in general…and all kinds of things going on [right now] are favorable to gold.'....'I do think gold is relatively cheap now,' he said."
1.31.17 - 2017: Expect the Unexpected
Gold last traded at $1,211 an ounce. Silver at $17.54 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Tuesday on safe haven buying and falling dollar. For the month, gold prices rose over 5% while silver prices rushed up over 10%. U.S. stocks fell sharply amid rising political uncertainty ahead of Wednesday's Fed statement. Stocks ended the month about where they began the year.
Here’s why the Trump-ban selloff may just be the tip of the iceberg -Marketwatch
"'This week was supposed to be dominated by central banks’ decisions, earnings, and economic data from across the globe, but with Donald Trump in office, nothing seems capable of taking the spotlight from the White House.' That was FXTM strategist Hussein Sayed in a note that pretty much nails the mood....Much debate now surrounds just when to start worrying about politics in earnest, and Sayed has one answer: 'The major risk looming now is the breakup of the Republican coalition, although this doesn’t seem to be the case for now. I believe it’s going to be the biggest risk to financial markets in the near future, as we end up with protectionist policies without the implementation of fiscal policies, thus triggering a sharp reversal in stocks worldwide.'"
Dean Heskin Comment: The problem with the stock market's climb since Nov. 9th is that it's mostly based on confidence versus substance. Therefore, when uncertainty creeps in, there's no substance to fall back on. As Mr. Trump continues to peel back the band aid covering the last several years of irresponsible fiscal policy, the real fear is what may be exposed. If/when that happens, the cat will be out of the bag and it could prove to be a most exciting time to be positioned in precious metals.
Gold Gains as Trump Shocks Markets by Doing What He Said He’d Do -Bloomberg
"Gold rose for a second day, set for its biggest monthly gain since June, on investor concern over moves by Trump that included barring entry by citizens from seven predominantly Muslim nations and firing the acting U.S. attorney general for refusing to enforce the order.....'The gold market is in thrall to the Donald Trump show,' David Govett, head of precious metals trading at Marex Spectron, said by e-mail from London. 'If Trump sticks to his immigration policy of the last few days, then gold should remain supported.' 'Uncertainty will keep equities and the dollar soft as the market comes to terms with the fact that Trump is the first politician in living memory, or ever, to actually enact every electoral promise he had made to the letter,' Jeffrey Halley, a senior market analyst at Oanda Corp. in Singapore, said by e-mail. 'Gold and other safe-havens should be the main beneficiaries.'"
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Just Doing His Job -Stein/American Spectator
"By a great stroke of luck, I read frequently about immigration law. One of my best friends, Nolan Rappaport, is a nationally renowned lawyer/expert on immigration law....I have learned that the President, through many decades, has been given by Congress immense latitude in enlarging or diminishing immigration. Mr. Obama could admit about as many Muslims as he wanted. Mr. Trump can keep out as many Muslims as he wants....Second, the media is acting as if the whole nation is in rebellion over the EOS on immigration. Not quite. Maybe a few tens of thousands have turned up at airports to torture the weary traveler trying to earn a living. But this is a nation of 335 million. Maybe 1/100th of one percent are blocking traffic. The rest of the country is trying to get to work or to ski. Third, demonstrators, ask yourself this. 'Why did Mr. Trump issue those executive orders? Did he do it just to give you an excuse to cut class? Did he do it to raise your blood pressure?' Or did he do it because he is trying to fight terrorism? ....'He is keeping his promises to the voters. He’s not kowtowing to the Washington establishment or the mainstream media. When was the last time you saw a President do that?'"
The United States Is On The Precipice Of Widespread Civil Unrest -Snyder/EconomicCollapseBlog
"It doesn’t take much of a trigger to push extremely large crowds of very angry protesters into committing acts of rioting and violence. And rioting and violence can ultimately lead to widespread civil unrest and calls for 'revolution'. The election of Donald Trump was perhaps the single most galvanizing moment for the radical left in modern American history, and we have already seen that a single move by Trump can literally cause protests to erupt from coast to coast within 48 hours....But the truth is that Trump does not hate any group of people. His target is simply Islamic terror, and he is actually pro-immigration as long as it is legal immigration. Let us not forget that his wife is a legal immigrant. I know that Trump is quite eager to get things done, but putting out this executive order at this particular moment was definitely a case of poor timing....This is a time for the peacemakers. If there are any left in Washington, we need them to rise up now and try to bring healing before it is too late."
1.30.17 - Is Trump's Wall St. Honeymoon Over?
Gold last traded at $1,196 an ounce. Silver at $17.15 an ounce.
NEWS SUMMARY: Precious metal prices rebounded on Monday amid rising market uncertainty and a weaker dollar. U.S. stocks fell sharply on growing investor concerns over president Trump's immigration policies.
GOLD: The Complete Investor’s Guide From the Smartest Guy In the Room -Hedge Eye
"On the one hand, you've got the gold bugs. They long for the good old days when the U.S. dollar was backed by the precious metal. On the other hand you've got clueless financial journalists derisively dismissing it as 'just a rock.' Both may be missing the point. Gold is a currency, says Goldmoney co-founder Josh Crumb....Most investors don't truly understand the long-term case for owning gold, according to Crumb. 'People want to bean count gold like it's oil or copper,' Crumb says. That's misguided....The best proof of gold’s stability as a currency is that, in the more than four decades since abandoning the Gold Standard, gold has maintained its value....This is why people should own gold, Crumb says. The stability of gold over long periods of time, is compelling, especially in an era of increased central bank meddling. Crumb suggests slowly adding your gold position on pullbacks like we've just had."
Mr. Crumb is spot on regarding the importance of how we perceive gold. Swiss America's 2017 newsletter, Volatility's Last Stand, explains the importance of viewing gold as money - the ultimate ‘numeraire,’ as Craig Smith puts it - only then will you find gold's daily price movements much less important over the long-term. Also, check out our 2017 Gold Report - Early Edition
The Honeymoon Is Ending: Angry Wall Street Traders Slam Trump, Warn Next Move Is Lower -Zero Hedge
"It appears that Wall Street's nearly 3 month honeymoon with Trump is ending. Because no matter how much the courts or public pressure force the watering down of Trump’s immigration order, Bloomberg's Mark Cudmore warns that 'the long-term damage to Brand USA has been done.'....Expect U.S. equities and the dollar to suffer. The framework has shifted negatively, not just in the short-term but long-term as well....If the game changes on you, it requires a change in strategy. For your sanity as well as P/L....It seems Trump's grace period on Wall Street is finally coming to an end."
To help our readers prepare for this widespread economic "sea change" under the new Trump administration in 2017, read America's First 100 Days - Free Special Report
The Dollar Will Die With a Whimper, Not a Bang -Rickards/Daily Reckoning
"The same force that made the dollar the world’s reserve currency is working to dethrone it....By the end of the First World War, the U.S. had emerged as a major creditor nation and a major gold power. The dollar’s percentage of total global reserves began to soar....Slippage in the dollar’s role as the leading global reserve currency is not necessarily something that would happen overnight, but is more likely to be a slow, steady process.... In 2000, dollar assets were about 70% of global reserves. Today, the comparable figure is about 62%. If this trend continues, one could easily see the dollar fall below 50% in the not-too-distant future....The decline of the dollar as a reserve currency started in 2000 with the advent of the euro and accelerated in 2010 with the beginning of a new currency war. In his 1925 poem The Hollow Men, T. S. Eliot writes: 'This is the way the world ends/ Not with a bang but a whimper.' Those waiting for a sudden, spontaneous collapse of the dollar may be missing out on the dollar’s less dramatic, but equally important slow, steady decline. The dollar collapse has already begun. The time to acquire inflation insurance is now."
Is California Really Going to Secede? -NY Magazine
"Since Donald Trump became president while securing less than a third of the vote in California, the Yes California campaign - a.k.a. Calexit - has gotten a lot of attention and perhaps even some momentum in getting an initial measure placed on the 2018 general election ballot. An estimated 7,000 volunteers have begun amassing the 585,407 signatures necessary to place a constitutional amendment on the 2018 ballot deleting the state’s adherence to the United States and authorizing a 2019 referendum on independence....Having said all that, the process required to make Calexit a reality is not just daunting: It’s basically impossible....In any case, it ain’t happening - but it’s still a convenient lightning rod for real West Coast fury....There’s nothing like the prospect of secession to dramatize Americans’ very real differences."
1.27.17 - A Trump Gold Standard Ahead?
Gold last traded at $1,188 an ounce. Silver at $17.13 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed on Friday after touching 2-month highs this week on dollar weakness. U.S. stocks slipped on falling oil prices and disappointing U.S. GDP data.
GDP shows economy slows to 1.9% growth -Marketwatch
"The U.S. economy’s expansion slowed in the fourth quarter, and annual growth failed to reach 3% for an 11th straight year, reflecting the huge hurdles the Trump administration faces in trying to speed up a 7½-year-old expansion. Gross domestic product, the official score card for the economy, expanded at a 1.9% annual clip from October to December, the Commerce Department said....For the full year, the U.S. grew just 1.6%, compared with its 2.6% clip in 2015. It was the weakest performance since 2011....Most predict the economy will grow around 2% or a bit faster in 2017. If Trump’s approach works, the payoff is unlikely to come until the end of the year or early 2018, they say."
Gold Exports to China Soar in Run-Up to Year of the Rooster -Bloomberg
"Gold exports to China soared in the run-up to the start of the Lunar New Year, with volumes increasing in December from major suppliers Switzerland and Hong Kong....China is the world’s top gold consumer, according to data from researcher Metals Focus Ltd., and the start of the Year of the Rooster this week is associated with gifting the precious metal. Lower prices at the end of last year, brought on by a stronger dollar as the U.S. increased interest rates, supported demand. 'Things have improved from where they were for much of the third quarter,' Nikos Kavalis, an analyst at London-based Metals Focus, said before the data was released. 'Much of that is on the back of the dip in prices. Retailers held back while prices were elevated, so there’s a bit of pent-up demand.'"
Our 2017 Gold Report - Early Edition reveals dozens of common sense reasons why owning physical gold is vital. Given today's political and economic unknowns, gold is no longer a luxury - it's a necessity!
Europe Proposes "Restrictions On Payments In Cash" -Zero Hedge
"Having discontinued its production of EUR500 banknotes, it appears Europe is charging towards the utopian dream of a cashless society. Just days after Davos' elites discussed why the world needs to 'get rid of currency,' the European Commission has introduced a proposal enforcing 'restrictions on payments in cash.' With Rogoff, Stiglitz, Summers et al. all calling for the end of cash - because only terrorists and drug-dealers need cash (nothing at all to do with totalitarian control over a nation's wealth) - we are not surprised that this proposal from the European Commission (sanctuary of statism) would appear....The Action Plan states that 'Payments in cash are widely used in the financing of terrorist activities… In this context, the relevance of potential upper limits to cash payments could also be explored. Several Member States have in place prohibitions for cash payments above a specific threshold....'While being allowed to pay in cash does not constitute a fundamental right, the objective of the initiative, which is to prevent the anonymity that cash payments allow, might be viewed as an infringement of the right to privacy enshrined in Article 7 of the EU Charter of Fundamental Rights.'"
Would Donald Trump Really Put America Back on the Gold Standard? -Fox Business
"Trump may not be alone in his interest in returning the U.S. to the gold standard. Some of Trump's biggest campaign rivals, including Ted Cruz, Mike Huckabee, and Ben Carson, have all implied some degree of support for the gold standard, with Cruz being the clear top supporter among these three....According to a 2015 poll from Gallup, 39% of respondents approved of the gold standard in the U.S., compared to just 15% who disapproved. Yes, that does mean 46% of respondents were undecided, but it nonetheless demonstrates pretty strong favorability toward the gold standard based on those who gave a definitive response....While we're probably not going to see a large rally in the price of gold anytime soon based on a return to the gold standard, gold itself has plenty of reasons it could head higher....Any aspect of Trump's reforms that fail to live up to expectations could be a catalyst for gold....Supply and demand is a final reason why gold could be a worthwhile holding for investors' portfolios."
Watch out for a Trump-Yellen showdown -CBS News
"U.S. equities moved to new records on Tuesday, thanks to an aggressive $1 trillion infrastructure spending plan proposed not by President Donald Trump but by congressional Democrats looking to retake the initiative....Of course, what’s enabling all this crushing of volatility has been the historic experiment with ultra-cheap monetary policy from the Federal Reserve -- a policy that’s set to change this year....Wall Street will be reminded of Yellen’s suddenly hawkish stance when the Fed holds its next policy meeting at the end of the month. All this raises some questions. Why has Yellen changed her view? Is this merely political payback against Mr. Trump’s claims of Fed bias?....Starting with next week’s Fed policy statement, watch for Wall Street to pay increased attention to Yellen-Trump tensions. Because with the Democrats apparently playing along, Fed rate hikes represent the single greatest threat to the GDP growth Trump needs to pay for his fiscal largesse without blowing out the national debt."
1.26.17 - "Record" Dow Mostly A Mirage
Gold last traded at $1,188 an ounce. Silver at $16.82 an ounce.
NEWS SUMMARY: Precious metal prices slipped Thursday amid profit-taking and and a firmer dollar. U.S. stocks traded mixed as Trump euphoria took a breather after sanguine corporate forecasts and rising jobless claims.
Why the gold price might be set for a rebound -CNBC
"Gold prices have been under pressure ever since the rally in global stocks and dollar following Donald Trump's victory in the U.S. elections. But a report from UBS says that investors are scaling back optimism that emerged shortly after the U.S. elections, and this is reflected in the recovery of gold prices. 'We think this is warranted and see room for gold to extend upwards as markets digest uncertainty around U.S. fiscal policy.'....Earlier this week gold prices hit two-month highs buoyed by a weaker dollar and uncertainty surrounding President Trump's policies. UBS in its research note said from a short-term perspective gold has already recovered considerably, with over 5 percent of gains so far in 2017. But the growing weakness in the U.S. dollar could push gold prices higher. Last week President Trump's shocking comments that the dollar is too strong sent the greenback tumbling to a six week low."
As we cover in our 2017 Gold Report - Early Edition ... "The discord surrounding the 2016 US election is clear evidence that political volatility in America is here to stay. As a result, there is perhaps no better moment in time to diversify with the enduring value of the world’s oldest money than now."
The 20,000 Dow (Priced In Gold) -New York Sun
"'Great!' tweets President Trump in respect of the Dow, which closed above 20,000 for the first time in history....For the record, though, the Dow, calculated in the classical measure of value, is nowhere near its high, even if it has been moving in the right direction. That was made recently by a point made by the Web site PricedinGold.com. It maintains, among other things, a chart of the Dow measured in gold. Its all-time low was the equivalent of 1.3 ounces of gold, struck at 1980, just as Americans were preparing to step back a bit from Keynesian principles and elevate Ronald Reagan to the White House. From there the Dow in gold began a steady and historic climb, peaking in August 1999 at a bit over 49 ounces of gold. PricedInGold.com reckons that on the day Mr. Trump was inaugurated, the Dow was at 18.1 ounces of gold."
The Dow just hit 20,000, but half of America missed out -Yahoo Finance
"On Wednesday, the Dow Jones Industrial Average traded above 20,000 for the first time....Unfortunately, however, many Americans missed out. Back in April 2016, Gallup conducted its latest annual poll showing that just 52% of American adults owned stocks, via either individual issues, mutual funds, or self-directed 401(k) plans. This matched the lowest ownership level in Gallup’s 19-year tracking of this measure....Additionally, stagnant incomes for most Americans over the last several decades have simply left many households with less money or no money available to put aside for retirement savings."
There’s a perfect storm coming for the dollar, says chief currency strategist -CNBC
"There is a fundamental case for the dollar to fall further from here, Unicredit's chief currency strategist told CNBC's Squawk Box on Tuesday. The U.S. currency is hovering around a six-week low after comments leaked on Monday from U.S. Treasury Secretary nominee Steve Mnuchin regarding potential short-term hits to the country's economy from an 'excessively strong dollar.' These remarks are just one factor to suggest the dollar is set to lose further ground in coming months, according to Vasileios Gkionakis, head of global FX strategy at Unicredit. 'I think it is quite overvalued relative to where real rate differentials were suggesting it would go,’ Gkionakis said, adding that the dollar's 30 percent appreciation between the summer of 2014 to the end of 2016 demonstrated that there is already a lot of optimism priced in....'I think 2017 is going to be a year where we see a weaker dollar across the board,' Gkionakis concluded."
Chinese Robots May Fill the Factory Jobs Trump Wants -New York Times
"Industrial robots - which come in many shapes and perform a range of factory jobs, from huge, precisely controlled arms used to build cars to graceful machines that package delicate pastries - were invented in the United States. But in the last few years the Chinese government has spent billions to turn China into the world’s robotic wonderland. In 2013, China became the world’s largest market for industrial robots, according to the International Federation of Robotics, an industry trade group. Now China is working on another big goal: to become the largest producer of robots used for factories, agriculture and a range of other applications....Frank Tobe, the publisher and editor of a trade magazine called The Robot Report, said government investment was imperative. 'We better do something, or we're going to be behind the gun,' he said. 'We should be in the robot business, not just users of foreign robots.' If we don’t, robot scholars said the president’s plans for a resurgence in manufacturing could backfire. Today, we buy a lot of stuff made in China by Chinese people. Tomorrow, we’ll buy stuff made in America - by Chinese robots."
"Robots with Artificial Intelligence could replace humans in up to 47 percent of today’s jobs, from hamburger flippers and factory workers to truck drivers, according to a report issued December 20, 2016, by the White House." Full news release
1.25.17 - Dow 20k: A Good or Bad Omen?
Gold last traded at $1,197 an ounce. Silver at $16.98 an ounce.
NEWS SUMMARY: Precious metal prices traded lower Wednesday on profit-taking amid Dow 20k euphoria. U.S. stocks rallied on investor momentum and rising economic optimism amid sweeping changes proposed by the Trump administration.
Dow crosses 20,000 on reinvigorated Trump rally -Reuters
"The Dow Jones Industrial Average traded above 20,000 for the first time and world stocks hit 19-month highs on Wednesday on strong Japanese trade data, stellar European corporate results and investor enthusiasm over U.S. President Donald Trump. The president's signing of numerous executive orders since his inauguration last Friday has reignited a rally that began after his election victory in November....The Dow's move since Nov. 22, when it first closed above 19,000, has been spearheaded by financial stocks, with Goldman Sachs and JPMorgan together accounting for about 20 percent of the gain. The two banks have benefited as investors bet Trump's expected fiscal stimulus will trigger inflation and stoke a rise in interest rates....Lingering concerns about growing protectionism and the potential negative effects on global trade and growth remained close to the surface."
Why the 'Trump Rally' may be overdone -USA Today
"If it’s true the big money is made investing in the stock market when share prices are depressed and the economy is in shambles, there’s a good chance the optimism surrounding the 'Trump Rally' might be overdone. Future stock market returns are largely determined by financial and economic conditions that exist at the start of an investment period. Generally speaking, the odds of reaping bigger gains improve when the market and economy are depressed - not when the stock market is at all-time highs and a lot of optimism is already built into prices. That’s why it's unlikely stocks under President Trump will generate the kinds of returns they did under President Obama....The stock market's bull run, now nearing its eighth birthday, may have less long-term upside potential now than it did in the dark days of early 2009, despite the euphoria around what Wall Street perceives as Trump’s business-friendly agenda."
You're Buying, They're Selling: Big Bank Execs Dump $100 Million In Stock As Market Soared -Zero Hedge
"Shortly after the melt-up in US bank stocks began following Trump's election victory, we noted heavy insider-selling (and options expiration) among Goldman Sachs executives. Well the selling never stopped, as WSJ reports executives at the biggest Wall Street banks have sold nearly $100 million worth of stock since the presidential election, more than in that same period in any year over the past decade. As we detailed in mid-November, while the mainstream media proclaims the surge in bank stocks as heralding a new dawn in everything-is-awesome-ness for America, we note that insiders at Goldman Sachs sold $205 million of stock since Nov. 8, company filings show...So who is the sucker at this table? Dick Bove gets it... 'banks won't be able to hold on to the earnings boost they get from higher interest rates. The hole in the bottom of the piggy bank, as he described it, would be that higher rates would also hurt the value of financial assets held by the bank, thus leaking out any benefits from increasing borrowing costs.'"
Gold Pressured By Rallying World Stock Markets -Forbes
"Gold prices are moderately lower in early U.S. trading Wednesday, as a 'risk-on' trader and investor mentality is prevalent in the world marketplace this week - evidenced by world stock markets that are on the rise. Profit taking from recent gains is also featured today, as gold prices on Tuesday hit a two-month high. February Comex gold was last down $7.20 an ounce at $1,203.50. March Comex silver was last down $0.24 at $16.945 an ounce....The U.S. dollar index is lower Wednesday morning. The index Tuesday hit a six-week low. Recent selling pressure has produced early technical clues the dollar index has put in a market top. Dollar index prices have been trending lower for three weeks."
1.24.17 - Robots Get Rights in EU?!
Gold last traded at $1,210 an ounce. Silver at $17.18 an ounce.
NEWS SUMMARY: Precious metal prices eased back Tuesday on a firmer dollar and mild profit taking. U.S. stocks moved higher as investors focused on a flurry of earnings reports.
Make Money Great Again - An Executive Order for Equal Treatment of Gold, Silver and United States Dollars as Money -White House
"We The People request the new administration Make Money Great Again; that gold and silver may freely be used as money alongside United States dollars. The Constitution explicitly recognizes gold and silver as money. We therefore petition that: - All tax discrimination against gold and silver must cease, including the removal of all capital gains tax on holdings of, and transactions in gold and silver, and; - That all impediments to using gold and silver as constitutionally-recognized money be removed. We Petition the Administration to sign this Executive Order to Make Money Great Again: www.mmga.org"
Robots Get Rights as “Electronic Persons” -News Release/WordPress
"Robots with Artificial Intelligence could replace humans in up to 47 percent of today’s jobs, from hamburger flippers and factory workers to truck drivers, according to a report issued December 20, 2016, by the White House. Many millions of people will be unemployed and in need of money. The government at the same time will lose trillions in revenue from jobless, broke former taxpayers. This could devastate the world economy. Government will increase reckless printing of money out of thin air, destroying the dollar’s value. Taxes will skyrocket. In their latest book, Money, Morality & The Machine: Smith’s Law in an Unethical, Over-Governed Age, Craig R. Smith and Lowell Ponte predicted that the European Union would turn to strange measures – and in early 2017 they have. The EU, exactly as Smith and Ponte warned, moved in January to make robots 'electronic persons.' It did this so that all kinds of robots can be made to pay tax – especially the steep retirement tax – that the robots, which never 'retire,' will never receive as retirement benefits." Full release
Doomsday Prep for the Super-Rich -New Yorker
"Survivalism, the practice of preparing for a crackup of civilization, tends to evoke a certain picture: the woodsman in the tinfoil hat, the hysteric with the hoard of beans, the religious doomsayer. But in recent years survivalism has expanded to more affluent quarters, taking root in Silicon Valley and New York City, among technology executives, hedge-fund managers, and others in their economic cohort....In recent years, survivalism has been edging deeper into mainstream culture. In 2012, National Geographic Channel launched 'Doomsday Preppers,' a reality show featuring a series of Americans bracing for what they called S.H.T.F..... The premiere drew more than four million viewers, and, by the end of the first season, it was the most popular show in the channel’s history....To Max Levchin, a founder of PayPal.... prepping for survival is a moral miscalculation; he prefers to 'shut down party conversations' on the topic. 'I typically ask people, ‘So you’re worried about the pitchforks. How much money have you donated to your local homeless shelter?’"
Billionaire Mario Gabelli shares his favorite stock ideas for the Trump economy -CNBC
"Value investor Mario Gabelli, founder and CEO of Gamco Investors, shared his top stock picks and market views in an exclusive interview with CNBC's 'Squawk Box' on Tuesday. On the Donald Trump economy: 'Fiscal stimulation is going to offset any drag from monetary slowdown,' he said. 'Inflation is coming back. ... Earnings are going to go up sharply in the next 12 months.' On his top stock ideas: 'We like companies with pricing power,' Gabelli said. 'Anything in the consumer products area. ... The supermarkets, for example, because food and fuel are going to rise.'"
Demonetization: The Sinister Agenda Behind Washington’s “War On Cash” -Global Research
"It’s kinda sneaking up on us like an East Texas copperhead pit viper. It began to get some wide attention in 2016, with prominent economists and financial media suddenly talking about the wonderful benefits of a 'cashless society.' Then the government of Narenda Modi completely surprised his citizens by suddenly announcing withdrawal of larger denomination currency notes from circulation, forcing Indians to put their cash into banks or lose it. Now, everywhere we turn, it seems, someone is arguing the Nirvana benefits of a cashless, 'digital' money world. It reminds me in an eerie way of a statement attributed to then US Secretary of State, Henry Kissinger in the 1970’s. He reportedly stated, 'If you control oil, you control entire nations; if you control food, you control the people; if you control money, you control the entire world.' ....The US War on Cash, combined with the US Treasury and IRS war on offshore banking is their latest model. As Washington’s War on Terror had a sinister, hidden agenda, so too does Washington’s War on Cash. It’s something to be avoided at all costs if we human beings are to retain any vestige of sovereignty or autonomy."
1.23.17 - Buck Sags on Trump Uncertainty
Gold last traded at $1,215 an ounce. Silver at $17.18 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on safe haven buying and a weaker U.S. dollar. U.S. stocks traded lower amid Trump corporate tax and trade policy jitters and weaker oil prices.
Gold Futures Jump to Two-Month High as Dollar Sags -Bloomberg
"Gold futures rose to the highest since November as protectionist signals from the Trump administration unsettled financial markets and weakened the dollar, spurring demand for the metal as a haven. Copper and other industrial metals also climbed. Bullion headed for a second straight gain as the Bloomberg Dollar Spot Index fell to near the lowest in a month. Gold has risen more than 5 percent this year, helped by a decline in the U.S. currency that’s boosting the appeal of metals as alternative assets....'It’s becoming increasingly apparent that economic activity in the U.S. under this new president may not be as stellar as many have thought,' said Bart Melek, the head of commodity strategy at Toronto-Dominion Bank in Toronto. 'The U.S. dollar has been dropping. That’s a positive outcome for gold.'”
Swiss America's 2017 newsletter, Volatility's Last Stand, will help you discover how to keep your wealth safe by hedging an unstable future using the world's most stable form of money, which remains 100% under your own control.
All investment decisions must be re-evaluated as the Trump era dawns -Marketwatch
"Stock market braces for sea change as Donald Trump takes charge. Much about President Donald Trump’s policies remains shrouded in mystery but there is one thing that Wall Street appears to be certain of - nothing will be the same. And as a fog of uncertainty continues to envelop the market, strategists are urging investors to prepare for the unexpected...Say goodbye to the old U.S., said Mark Grant, chief strategist at Hilltop Securities. In its place will be a country that is run as a business with businessmen in charge. As a result, he said, all investment decisions must be re-evaluated with the mantra of 'America First' in mind."
To help our readers prepare for this widespread economic "sea change" under the new Trump administration in 2017, we have assembled some of the key proposals high on the President-Elect’s priority list we believe could influence global markets, the domestic economy and your investments in the coming year. America's First 100 Days - Free Special Report
Inflation a Very Big Problem for Consumers -Morningstar
"For almost two years, headline inflation has run well below core inflation and hourly wage growth. That has been very beneficial for the consumer, who has been driving almost all of the economic growth in the U.S. recently....Unfortunately, the gap between headline and core inflation has closed considerably....We don't think even 2.8% inflation would trigger a full-blown recession. However, our past work suggests that as headline inflation approaches 4%, recession cannot be very far behind....If consumers rent, use a lot of medical care, and use a lot of energy, inflation could look pretty nasty, as much as 4% or 5%."
President Trump Declares Independence -Noonan/Wall Street Journal
"He presented himself not as a Republican or a conservative but as a populist independent. The essential message: Remember those things I said in the campaign? I meant them. I meant it all....It was an unmistakable indictment of almost everyone seated with him on the platform. Then a stark vow: 'That all changes - starting right here and right now.' Jan. 20 'will be remembered as the day the people became the rulers of this nation again.'....The columnists, thinkers and magazines of the right were mostly NeverTrump; some came reluctantly to support him. His party is split or splitting. The new president has gradations of sympathy, respect or support from exactly one cable news channel, and some websites. He really has no one but those who voted for him. Do they understand what a lift daily governance is going to be, and how long the odds are, with so much arrayed against him, and them?"
1.20.17 - Markets Cheer Trump Change
Gold last traded at $1,204 an ounce. Silver at $17.03 an ounce
NEWS SUMMARY: Precious metal prices rose Friday on a weaker dollar and rising uncertainty as President Trump takes over U.S. political leadership. U.S. stocks also cheered despite fears of Trump protectionist policies ahead.
Trump pledges 'America first' creed, says 'you will never be ignored again' -CNBC
"Donald J. Trump preached the populist and nationalist message that fueled his presidential campaign in his first remarks as the 45th president of the United States, pledging an 'America first' creed....As raindrops fell on the crowd gathered on the National Mall, Trump said he planned to 'transfer power from Washington, D.C.' to the people, taking swipes at politicians, some of whom stood just over his shoulder. He told Americans that 'you will never be ignored again,' repeating his campaign pledges to push companies to return jobs to the U.S. and to rebuild American infrastructure." Full Inaugural Address Transcript
Investors Need to Look Well Beyond the Inauguration -Bloomberg
"One of the best ways to plan for the long-term is by setting reasonable expectations. What's considered reasonable based on where we stand today? Hint: Lower your expectations for future stock market returns in the U.S., expect higher returns in foreign equities and brush up on your bond math....The U.S. is the most expensive market across every valuation metric, but that makes sense given the huge outperformance over the past five years....Unlike stock market performance, bond returns are more or less governed by math....Also, expect an uptick in volatility in bonds because the yields are much lower than they have been historically, meaning the same change in interest rates will have a greater effect now on bond prices than they would have at higher rates in the past."
FREE REPORT! From repealing Obamacare and rolling back regulations, to controlling the border and cutting taxes - the Trump agenda has both implications and ramifications. This insightful report also includes Trump's 26-point comprehensive "Contract With The American Voter". To request your complimentary copy call 800-289-2646 or register HERE.
Bullion Bulls Have History on Their Side as Trump Takes Helm -Bloomberg
"Gold bulls wagering the bullion rally has more room to run may have history on their side with the arrival of a new U.S. president....Gold has averaged gains of almost 15 percent in years marking the inauguration of a new president since the 1970s, advancing in five of those seven years. In contrast, the S&P 500 index of equities declined in four of those years for an average loss over the period of 0.9 percent....The metal has climbed almost 5 percent this year as questions over the possible economic impact of Donald Trump’s policies add to investor angst over Brexit and mounting trade frictions. Bulls reason that gold will extend its gain as scant details of Trump’s fiscal stimulus program and tensions with trading partners including China unnerve investors. 'We have no idea what’s going to happen with some of Trump’s policies - everybody is a little nervous,' said Axel Merk, San Francisco-based founder of Merk Investments LLC, which manages $300 million in assets. 'Gold is relatively undervalued and will push higher.'"
Washington Prepares to Be Upended by President Trump -New York Times
"Donald John Trump was inaugurated as the 45th president of the United States on Friday, ushering in a new and more unpredictable era in which he vowed to shatter the established order and restore American greatness....He said the inauguration represented not just the peaceful transfer of power from one party to another. 'We are transferring power from Washington, D.C., and giving it back to you the people,' he said....Within hours of taking office, the new president could begin signing executive orders freezing regulations put in place in the last weeks of Mr. Obama’s tenure and reversing policies on health care, immigration and other areas. His son Donald Trump Jr. said the new president was coming to grips with the gravity of his new position, even if it did not necessarily seem so in public. 'He’s been humbled by the whole process,' he said on MSNBC."
We are pleased to hear that America's newest politician feels "humbled" and hope he remains humble. As discussed in our 35th Anniversary Real Money Perspectives newsletter, Volatility's Last Stand ..."Perhaps Trump has learned it takes pride to get elected (get the deal) and humility to govern wisely (keep the deal). Time will tell if President Trump can live up to his new Secret Service handle ('Humble') and if his proud showmanship will give way to humble statesmanship. 'Humility is the most difficult of all virtues to achieve; nothing dies harder than the desire to think well of oneself,' said essayist and playwright T.S. Elliot."
Trump Inaugural Address Focuses On ‘We,’ Leaves Himself Out Of Speech Almost Entirely -Daily Caller
"The first time Trump referred to himself came about halfway through the speech, when he said: 'The oath of office I take today is an oath of allegiance to all Americans.' Trump’s other two references to himself came shortly afterwards. 'I will fight for you with every breath in my body - and I will never, ever let you down,' Trump said. That was the extent to which Trump gave himself any mention in his inaugural address. He referred to 'we' the American people 45 times over the course of the address, including a string of mentions at the end of his speech, playing off his 'Make America Great Again' slogan: 'Together, We Will Make America Strong Again. We Will Make America Wealthy Again. We Will Make America Proud Again. We Will Make America Safe Again. And, Yes, Together, We Will Make America Great Again.'"
1.19.17 - Market Rigging A Buying Opp?
Gold last traded at $1,201 an ounce. Silver at $17.00 an ounce
NEWS SUMMARY: Precious metal prices eased back on Thursday after Fed head Janet Yellen jawbones coming interest rate hikes. U.S. stocks traded lower as real estate prices fell and the Trump inauguration looms large.
Washington D.C. Turned Into "Virtual Fortress" As 250,000 Protesters Descend Upon The City -Zero Hedge
"Over the past couple of days, we've highlighted a couple of the mass protests that are being planned by disaffected Hillary supporters in an effort to disrupt the various Trump inaugural events that get kicked off tomorrow evening. Perhaps the most aggressive 'disruptions' have been planned by groups called 'DisruptJ20' and the 'DC Anti-Fascist Coalition' and include plans to 'paralyze the city' with ....'blockades' of bridges and tunnels, 'stink bombs' in ventilation systems and chaining metro trains to station platforms to shut down rail traffic. Unfortunately for them, all of their plans were caught on tape by Project Veritas (see 'New Video Exposes Anti-Trump Groups Plotting Criminal Acts To Disrupt Inauguration') so we suspect police will be well prepared. As Reuters points out this morning, efforts to disrupt the inaugural process will have to evade a massive force of 28,000 security personnel and miles of fencing and roadblocks fortified by sand-laden dump trucks and other heavy equipment."
Does Market Rigging in the Metals Signal a Buying Opportunity? Miller On The Money
"The need to protect your retirement nest egg from inflation is growing by the day. If the best inflation protection on the planet, precious metals, is being artificially held down in price what should an investor do? I contacted Ed Steer. I asked his opinion on the smoking gun and the implication for those who need to protect their life savings from inflation. DENNIS: ....As a member of the GATA committee, I know you are on top of the situation. The smoking gun appeared. Will this change the 'big boys' continual market manipulation? ED: Hi Dennis...The largest 8 traders, mostly U.S. banks and brokerage houses, are still mega-short the precious metals...The 'smoking gun' you refer to with the Deutsche Bank revelations has confirmed that the silver market is rigged – as is the gold market....DENNIS: ....What would you tell readers who are concerned about funding their retirement and making sure they have ample funds to pay their bills for the rest of their life? ED: Inflation is coming whether we want it or not – and it’s not going to be just a little bit of inflation. Central banks will move heaven and earth to ensure that it happens. The first place it will show up will be in precious metal prices, along with their associated equities. A portion of your retirement savings in them, whatever portion you feel comfortable with, will go a long way to not only preserving your wealth, but also your future purchasing power."
Weiss Research reports, "GATA says 'The objective of this manipulation is to conceal the mismanagement of the U.S. dollar so that it might retain its function as the world’s reserve currency.' Craig R. Smith, founder of Swiss America Trading Corp says he accepts the GATA arguments because 'there has to be a force greater than normal market conditions that has repressed the price of gold.'"
The “war on cash” has nothing to do with fighting crime -Saville/The Speculative Investor
"Don’t be hoodwinked by the relentless propaganda into believing that the efforts being made to eliminate physical cash are motivated by a desire to reduce crime and corruption. Fighting crime/corruption is just a pretext. The logic behind the propaganda goes like this: Criminals often use physical cash in their dealings, therefore cash should be eliminated. This makes as much sense as saying: Criminals often use cars, therefore cars should be banned....The reasons being put forward for the elimination of cash are therefore bogus. What, then, are the real reasons? The main real reason is to maximize tax revenue. If all transactions are carried out electronically via the banking system then every transaction can be monitored, making it more difficult to avoid tax. In other words, the main reason that governments are very keen to eliminate physical cash is that by doing so they increase the amount of money flowing into government coffers....So, any economist or financial journalist who advocates the elimination of physical cash is clueless at best and a government/banking-system stooge at worst."
Yellen speech bolsters dollar after Trump's mixed messages -Reuters
"The dollar climbed on Thursday as solid U.S. data reinforced a theme of robust U.S. economic growth, while the euro fell after European Central Bank chief Mario Draghi alluded to sagging inflation and the need for further monetary policy assistance....The ECB announced it would maintain its negative interest rate policy and maintain a record pace of asset purchases to stimulate tepid growth. Draghi described the current euro zone recovery as 'dampened by the sluggish pace of structural reform' and said a 'very substantial degree' of monetary policy stimulus was still needed."
1.18.17 - Why Investors Are Nervous
Gold last traded at $1,204 an ounce. Silver at $17.09 an ounce
NEWS SUMMARY: Precious metal prices steadied near 8-week highs Wednesday on a slight dollar rebound. U.S. stocks traded mixed ahead of Fedspeak amid growing political uncertainty
Should We Trash Cash? -New York Times
"I wonder, though, about the wisdom of the anti-cash crusade. The problem with the argument is that it concedes too much power to the modern triple-headed monster of the economy - the state, the central bank and the banking system. If there is no cash, there is nowhere for the private citizen to hide any assets at all, not just for criminal reasons but simply for financial security. The year 2008 was a reminder of how fragile our banking system is and how all-encompassing financial crisis can be....Cash is one of the few ways in which ordinary citizens can enjoy a tiny taste of the freedom, privacy and security that the rich take as their due. That, for me, is what’s missing in the critique of cash. If there were to be a big, convincing, system wide drive to tax the hidden assets of the rich, to drag them inside the same norms that constrain the rest of us, to make it clear that we are all playing by the same rules - well, then maybe we can start to talk about abolishing cash. Until then, we would do well to bear in mind a favorite line of the pro-cash lobby, Dostoyevsky’s observation from a czarist prison: ‘Money,’ he wrote, ‘is coined liberty.’"
Trump Will Make Volatility and Uncertainty Great Again -Real Clear Markets
"It remains my view that volatility and risk are materially underpriced in today's markets. While animal spirits have taken over the markets, abetted by machines and algorithms that often create an artificial market setting by exaggerating market moves, I will remind all that there is a reason why they are called animal spirits and not human spirits....Is it Reagan's 'Morning in America?' -- a metaphor for renewal. We all hope so, but I doubt if this will be the case this time....I am doubtful and I continue to believe that Donald Trump will make volatility and uncertainty great again....I would fade the 'animal spirits'... as I am fearful of elevated stock prices in a post-fact investment world. I would overweight gold and underweight stocks."
As we cover in our 2017 Gold Report - Early Edition ... "The discord surrounding the 2016 US election is clear evidence that political volatility in America is here to stay. US voters passed up ‘certainty’ for the ‘unknown.’ We are sitting on a powder keg of unpredictability. As a result, there is perhaps no better moment in time to diversify with the enduring value of the world’s oldest money than now."
Trump vs. the Dollar: Why Investors Are Right to Be Nervous -The Fiscal Times
"The dollar's rise was one of the lynchpins of the post-election rise, fueling the weakness in emerging market stocks and currencies (on trade war and border tax fears) and building intense demand for U.S. equities. The dollar’s rise helped crush safe haven assets like gold and Treasury bonds. Over the last few weeks, trend reversals have been seen in precious metals and bonds. Gold has climbed for three consecutive weeks to top the $1,200-an-ounce level for the first time since November....Suddenly, there is an interest in safety again. Now, it's the dollar's turn: On Friday, the greenback closed below its 50-day moving average for the first time since September. That drop continued on Tuesday after Trump told The Wall Street Journal that the dollar is 'too strong.'....History suggests that when the dollar weakens after a sustained uptrend, the losses tend to continue..."
Liberal Preppers Stock Up On Guns, Food As Trumpocalypse Looms -Vocativ
"With Trump on the horizon, the survivalist movement - long a pastime of the right - is picking up progressive converts fast....Long a calling among conservatives spooked by big government boogymen and calamitous natural disasters, the so-called prepper movement is gaining a decisively liberal following. 'We’re tired of being perceived as wusses...' said Stacy, a Texas Democrat who recently caught the prepper bug. She spoke with Vocativ on the condition we not publish her last name. 'I, for one, don’t like to be thought of as some precious snowflake.'....'It’s the nature of the political beast,' said Kevin O’Brien, a conservative prepper and realtor who specializes in off-the-grid properties in eastern Tennessee. 'Obama had many on the right really wound up. Now it’s the left’s turn.'"
1.17.17- Gold Surges on New Uncertainty
Gold last traded at $1,212 an ounce. Silver at $17.14 an ounce
NEWS SUMMARY: Precious metal prices were boosted by safe-haven buying Tuesday after President-elect Trump called for a weaker U.S. dollar. U.S. stock prices fell amid growing Trump policy worries.
Gold jumps to 8-week high on nervousness over Brexit, Trump -Marketwatch
"Gold prices jumped to their highest levels since mid-November on Tuesday as nervousness surrounding Britain’s push to exit from the European Union’s single market and U.S. President-elect Donald Trump’s inauguration this week fed haven demand for the precious metal. Gold for February delivery rose $17.20, or 1.4%, to $1,213.40 an ounce after trading as high as $1,218.90. A settlement around these levels would be the highest since mid-November, according to FactSet data. 'Uncertainty on the Trump transition continues to unsettle markets,' said Peter Hug, global trading director at Kitco Metals. 'President-elect Trump has over the past two days angered China on his Taiwan comments, disparaged NATO and insulted Germany’s Angela Merkel.'"
Physical gold is the world's safest haven and best form of 'wealth insurance.' 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.
Davos 2017: Aristocrats Face the Pitchforks -Wall Street Journal
"The disconnect between the Davos community - among the principal beneficiaries of globalization - and the rest of the world is striking. If the highly integrated, early 21st-century global economy had an aristocracy, it would be roughly the group of people who gather this week in the Swiss mountain resort of Davos....The tide of populist anger that swept the major economies in 2016 - highlighted by the British vote to leave the European Union and the election of Donald Trump in the U.S., marked also by rising support for nationalist parties and anti-establishment causes elsewhere in the developed world, is lapping at the elegantly appointed front door of Davos Man....The disconnect between this fraternity and the rest of the world is striking....The question for the Davos leadership this year is twofold: Will they continue to dismiss and deride voters who want to maintain or restore those borders as racist, xenophobic or even neo-fascist?... And second, what, if anything, do they intend to do about it?"
Craig Smith comment: The Davos panel all agree that uncertainty and lack of trust are rampant throughout the financial world. An over-extended period of artificially low interest rates have distorted price discovery to the point that no one can determine real value of underlying assets supporting all the bonds purchased by central banks. The titans of world finance are nervous, uncertain and believe that until interest rates normalize (which will be around 5-6%) we are in for a rough period. Liquidation of dead assets are necessary to clear the balance sheets of the central banks before we see transparent paper asset pricing. Gold ownership must not be dismissed in this environment.
Dollar retreats on Trump’s concern over strength -Financial Times
"The dollar retreated from the high it struck at the start of the year after Donald Trump signaled his preference for a weaker currency by warning that the greenback was 'too strong' for US companies to compete with their Chinese counterparts....Economists and currency analysts have speculated about the risks a robust US currency, which is trading at a 14-year high against a basket of its peers, poses to the president-elect’s growth strategy, and predicted that the incoming administration in Washington would soon start talking down the dollar. The first inklings of that tactic emerged in an interview Mr Trump gave to the Wall Street Journal late on Monday in which he said: 'Our companies can’t compete with them [Chinese companies] now because our currency is too strong. And it’s killing us.'....The dollar index has fallen 3 per cent since its January 3 high."
Cash Ban Gives India Gold Lovers No Way to Buy Wedding Rings -Bloomberg
"A self-imposed cash shortage in India is creating chaos for jewelry retailers in one of the world’s biggest gold-buying countries. Sales are plunging....In November, the government banned what amounts to half the circulated cash, part of a plan to curb corruption and tax evasion....'All our plans went for a toss after the demonetization,' said Ferreira, 28, a marketing consultant. 'Cash is just not an option now. We can’t get married without rings.'....Rural residents were hurt the most because they use cash almost exclusively, from buying clothes or food to paying for weddings."
A hot, new video by AMTV explains the many economic risks facing the new Trump administration and why the growing "War on Cash" is going on worldwide.
1.13.17- Gold: Only Asset Safe From "Meddling"
Gold last traded at $1,196 an ounce. Silver at $16.76 an ounce.
NEWS SUMMARY: Precious metal prices steadied near 7-week highs Friday on bullish sentiment and on a flat dollar. U.S. stocks rose on upbeat bank earnings, NASDAQ tech index hits record high.
Central-Bank Bashing Has Gold Only Asset Safe From Meddling -Bloomberg
"Baring Asset Management’s Christopher Mahon has one major conviction about 2017: it will be the year in which central-bank bashing by politicians becomes the new normal, so he’s seeking shelter in gold. 'This year is the turning point,' Mahon said in an interview on Monday. 'For seven years or so, central banks have largely escaped critique even though one could argue that their policies have been pretty inadequate in many senses. It’s very plausible now that politicians stand up and throw stones at central bankers.'....Mahon is betting that gold will rise if political intervention causes central banks to miss inflation and growth targets....Gold used to be the center of the global financial system, for that reason it has a reputation as a currency -- but as a currency that’s not issued by governments and not controlled by governments.”
The gold market in 2017 -World Gold Council
"In 2016, investors around the world returned in large numbers to the gold market, as a combination of macroeconomic drivers and pent up demand kept interest in gold high. As we start the new year, there are some concerns that US dollar strength may limit gold’s appeal....Using the economic perspective from our guest economists as a backdrop, we believe that there are six major trends in the global economy that will support gold demand and influence its performance this year: 1. Heightened political and geopolitical risks. 2. Currency depreciation. 3. Rising inflation expectations. 4. Inflated stock market valuations. 5. Long-term Asian growth. 6. Opening of new markets. World Gold Council's 2017 Outlook
For the First Time, Lady Liberty Depicted as a Woman of Color on U.S. Currency -NBC News
"For the first time in American history, Lady Liberty will be portrayed as a woman of color on United States currency. In celebration of the U.S. Mint and Treasury's 225th anniversary, the new $100 coin was unveiled on Thursday featuring Lady Liberty as a black woman. Since the passage of the Coinage Act in 1792, all coins are required to feature an 'impression emblematic of liberty,' in either words or images. The new 24-karat gold coin, which is set to be released in April and is meant primarily for collectors, is one of a series of new, diverse commemorative coins the Mint will unveil in the coming years."
Beleaguered Small Businesses Set For Big Rebound Under Trump -Investors
"Small businesses and entrepreneurs have had a rough time of it for these past eight years. New startups and entrepreneurial activity have pretty much been stagnant, weighed down by heavy regulation, high taxes and an economy that's just been stumbling along. But in recent weeks, there are signs of renewal that could mark a turnaround in the fortunes of small business. Most impressively, the National Federation of Independent Business' small-business optimism index surged in December by the most since 1980, a year when another maverick conservative-leaning candidate surprised everyone and won the presidency. His name was Reagan.... Since 2009, small businesses have accounted for over 60% of all new jobs....In short, when small business booms, the economy booms."
1.12.17- The Looming Assault on the Fed
Gold last traded at $1,199 an ounce. Silver at $16.82 an ounce
NEWS SUMMARY: Precious metal prices rose again Thursday on momentum buying and a sharply weaker dollar. U.S. stocks erased all 2017 gains following Trump statements focused on protectionism rather than tax cuts and stimulus.
Gold Surges Above $1,200 as Details-Shy Trump Weighing on Dollar -Bloomberg
"Gold futures rallied to a seven-week high as investors flooded back into funds backed by the metal and the dollar declined in the aftermath of Donald Trump’s press conference that provided little detail on his economic stimulus plans. The metal on Thursday rose above $1,200 an ounce for the first time since late November as exchange-traded holdings jumped by the most since the day after the election. The U.S. currency fell against all of its major peers, dropping 1 percent against the Japanese yen. Gold has risen more than 4 percent this year, bolstered by a weaker greenback that’s spurring demand for the metal as an alternative asset."
Top-Down Frustration in a Bottom-Up World -American Conservative
"Wall Street and the Fed have stacked the deck against Main Street - and the nation’s long-term prosperity is at risk....The world has become a collection of winners and losers, and the winners - usually large established institutions - are manipulating the system at the expense of the entrepreneurial newcomers....Tech investor Peter Thiel, who co-founded PayPal, argues that these firms are engaged in 'the opposite of innovation; they are monopolies.' Main Street Capitalism, the Great Equalizer, the kind of capitalism that demands a level playing field, is under massive assault in this new zero-sum economic environment where the 'big' almost always carry the day....True economic success emerges largely as a result of behavioral changes from the bottom up - not the top down. In his book The Evolution of Everything, Matt Ridley points out the fascination by elites with top-down design rather than bottom-up 'evolution' when it comes to major achievements in science, economics, and social change."
Amazon to create more than 100,000 full-time jobs in the next 18 months -Marketwatch
"Amazon.com Inc. said Thursday that it will create more than 100,000 full-time, full-benefit jobs across the U.S. over the next 18 months. The new additions will take the U.S. full-time workforce from 180,000 in 2016 to more than 280,000 by mid-2018. The new jobs will be nationwide and cut across functions from software developers and engineers to entry-level positions, the company said. Most will be in fulfillment centers currently under construction in states including Texas, California and New Jersey. Amazon says it has created more than 150,000 jobs in the U.S. over the past five years."
The Looming Assault on the Federal Reserve -Barrons
"The new regime hates the Fed: Donald Trump’s supporters are remarkably unified on the Federal Reserve: It monetizes the debt, it creates asset bubbles, it is utterly nontransparent, it’s controlled by Keynesians, its regulations hurt the economy, its bloated balance sheet will be impossible to wind down in an orderly manner, etc. But most importantly, the new regime thinks the Fed has too much power....Sen.Rand Paul, an increasingly important player, has re-introduced his ‘Federal Reserve Transparency Act,’ which has a good chance of passing in the Senate as well...If it passes, Trump would sign it....Trump might eventually appreciate a dove like Yellen, but he and his supporters have a bigger issue than Yellen - their beef is with the Fed as an institution....Trump gets two nominees this year and two more in 2018; the key may not be whether these nominees are monetary hawks or doves - it’s whether they want to curb the Fed’s power, reduce its balance sheet and accept more transparency."
'Fake news' has not spared the financial markets -Business Insider
"As much as we may not want to hear it, there is nothing new about the phenomenon known as fake news. Combatting it has proven to be a viable business for Snopes.com, which has been exposing fake news items, from fabricated messages to factual distortions since the mid-1990s. That being said, the occurrence of fake news spiked in 2016 running the gamut from political to financial so much so that the German government is considering fines of up to $522,000 for each day Facebook 'leaves a 'fake news' story up without deleting it.'....Politics and celebrities aren’t the only arenas for fake news. Financial markets have also seen their fair share of rumor and fake news as well. In early 2014, Adam Feuerstein at The Street identified that, 'a single individual used three different pseudonyms to push articles on Seeking Alpha. After looking into the matter, the Website discovered that a single individual wrote five articles.' ....Without question, investors need to do their homework before committing capital to either a long or short position."
1.11.17 - Gold Looks "Very Undervalued"
Gold last traded at $1,189 an ounce. Silver at $16.82 an ounce.
NEWS SUMMARY: Precious metal prices rally, ending at seven-week highs on Wednesday. U.S. stocks traded mixed following President-elect Donald Trump's first news conference of the year.
Gold looks very undervalued: Frank Holmes -CNBC Video
"Frank Holmes at U.S. Global Investors says that growth in China will lead to strong physical demand for the precious metal....According to Holmes, "I've always recommended a 10% weighting in gold and rebalancing each year...I think we are going to see a stronger year this year...I call it the 'love trade' - which has to do with gift-giving - which accounts for about 50% of the gold buying. It follows what's going on in China, in India...in addition to the 'fear trade' which is based on negative interest rates."
As we discuss in our 2017 Gold Report - Early Edition, 2017 may prove to be another history making year. The world has a crammed election calendar with a host of vulnerable incumbents, deep political divides, and an escalating clash between elitism and populism. Add all the carry-over threats from last year - Russia, Iran, the refugee crisis, terrorism, North Korea - and we are sitting on a powder keg of unpredictability. In such a highly charged climate a single vote, election outcome, or referendum could very well send currencies plunging, global stocks tumbling and investors retreating to the safety of gold.
Killer Cash! -Daily Reckoning
"The global elites’ latest volley in the 'war on cash' is a weird one. They’re telling us cash is - drumroll, please - a public health issue. If you’ve been reading us for any amount of time, you’re familiar with the war on cash — the increasing push to get us all to perform our transactions electronically, the better to be tracked and taxed. Former Treasury Secretary Larry Summers figures the least that could be done is abolish the $100 bill; Harvard economist Ken Rogoff would just as soon do away with cash altogether, making his case in a book called The Curse of Cash. As you might already know, most of the arguments against cash are a variant on the following proposition: If we don’t do away with cash, then the money launderers and drug runners and terrorists win. Which is what makes the health gambit, if nothing else, novel…'Studies have piled up in recent years describing exactly how filthy - specifically how bacteria-laden - our dollars and cents can be,' says an article in Scientific American."
Cash is under attack from multiple entities - government, banks, technology and now scientists. As we explained in our 2014 book, Don't Bank On It! the use of cash today 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 .
World Economic Forum says capitalism needs urgent change -Associated Press
"Reforming the very nature of capitalism will be needed to combat the growing appeal of populist political movements around the world, the World Economic Forum said Wednesday....In a wide-ranging report from the organizer of the annual gathering of political and business leaders in the Swiss resort of Davos, the WEF identified 'rising income and wealth disparity' as potentially the biggest driver in global affairs over the next ten years....'This points to the need for reviving economic growth, but the growing mood of anti-establishment populism suggests we may have passed the stage where this alone would remedy fractures in society: reforming market capitalism must also be added to the agenda,' it said in its latest Global Risks Report. 'The combination of economic inequality and political polarization threatens to amplify global risks, fraying the social solidarity on which the legitimacy of our economic and political systems rests,' it added."
German fury grows over inflation 'Horror-Kurve' as fears of destructive boom-bust cycle mount -Evans-Pritchard/Telegraph
"Inflation rage is coming to the boil in Germany. Leaders of the country's prestigious institutes warn that the economy is hitting capacity constraints and risks spiraling into a destructive boom-bust cycle. In a series of interviews with The Telegraph they said that the ultra-loose monetary policy of the European Central Bank is now badly out of alignment with German needs. It has begun to threaten lasting damage, and is fast undermining political consent for monetary union. 'The ECB wants to inflate away the debt of the southern European countries. This is a clear conflict of interest with net creditors like Germany,' said Clemens Fuest, president of the IFO Institute in Munich."
1.10.17 - Gold Rises To 6-Week High
Gold last traded at $1,186 an ounce. Silver at $16.84 an ounce.
Precious metal prices rose near 6-week highs Tuesday on increasing demand, despite a firmer dollar. U.S. stocks rose modestly, lead by financials and technology.
Gold prices climb to highest levels in 6 weeks -Marketwatch
"Gold futures edged higher Tuesday, with a weaker U.S. dollar and uncertainty in the markets a day ahead of President-elect Donald Trump’s press conference lifting the precious metal to its highest level in six weeks. The markets look forward to details Wednesday on spending plans from the incoming Trump administration. Wednesday will mark Trump’s first official news conference since July, an appearance that has injected added volatility into dollar and metals trading and left stocks trading only modestly higher....'The weakness in the dollar is the major factor here, as traders are wary' ahead of Trump’s media briefing, said Naeem Aslam, chief market analyst at ThinkMarkets."
The Rise of the Cashless City: 'There Is This Real Danger of Exclusion' -Forrest/Guardian
"Cities from Sweden to India are pushing for a totally cash-free society. But as more shops and transport networks insist on electronic payments, where does this leave the smallest traders and poorest inhabitants?....As more shops and transport networks adapt to contactless card and touch-and-go mobile technology, many major cities around the world are in the process of relegating cash to second-class status. Some London shops and cafes are now, like the capital’s buses, simply refusing to handle notes or coins. Could we see a whole city go cash-free? From Seoul to Bergamo, cities big and small are at the forefront of a global drive to go digital....'The beauty of cash is that it’s a direct and simple transaction between all kinds of different people, no matter how rich or poor,' explains financial writer Dominic Frisby. 'If you begin to insist on cashlessness, it does put pressure on you to be banked and signed up to financial system, and many of the poorest are likely to remain outside of that system. So there is this real danger of exclusion.'....According to a recent report by Fung Global Retail & Technology, nine of the top 15 'most digital-ready' countries are in Europe. It predicts Sweden could become the world’s first completely cashless society."
U.S. Small-Business Optimism Index Surges by Most Since 1980 -Bloomberg
"Optimism among America’s small businesses soared in December by the most since 1980 as expectations about the economy’s prospects improved dramatically in the aftermath of the presidential election....The share of business owners who say now is a good time to expand is three times the average of the current expansion, according to the NFIB’s data. More companies also said they plan to increase investment and keep hiring, which reflects optimism surrounding President-elect Donald Trump’s plans of spurring the economy through deregulation, tax reform and infrastructure spending. 'Rising confidence adds to the economy’s upward momentum,' Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in a note....'We haven’t seen numbers like this in a long time,' Juanita Duggan, president and chief executive of the NFIB, said in a statement. 'Small business is ready for a breakout, and that can only mean very good things for the U.S. economy. Business owners are feeling better about taking risks and making investments.'"
1.9.17 - AMERICA: Attractive for Business Again!
Gold last traded at $1,184 an ounce. Silver at $16.68 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply on Monday amid a weaker dollar and demand upswing. U.S. stocks traded mixed on weaker oil prices ahead of the start of corporate earnings season.
Gold Is Cheap Insurance No Matter What The Fed Will Do -Forbes
"Many investors wonder if gold has entered a lasting bear market. Or if this is the time to buy while prices are low. The world is focused on the prospect of rising interest rates. Yet, the market is pricing-in modest rate increases....Years of loose monetary policy - coupled with Trump’s infrastructure, de-regulation, and fiscal plans - could unleash a time of economic expansion which would likely include inflation. Based on the Fed’s past behavior, we expect them to be slow to hike rates and catch up. Real rates may turn negative. It would be very favorable for gold prices....The US economy is in the headwinds of a strong dollar and over-indebtedness. Lower taxes and increased spending could tip the scale and cause a recession....Add to this a very volatile geopolitical environment, fragile economies worldwide, and excessive levels of debt across the globe: the case for gold as insurance and also as a solid long-term investment is as strong as ever."
Yes, physical gold is the world's best 'wealth insurance.' 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.
Is Trump Making America Great Again? -Craig Smith/Fox Business
Swiss America chairman Craig R. Smith was a guest on Fox News 'Your World With Neil Cavuto' today to discuss the positive economic trends leading into the Trump presidency. For example, today Jack Ma, the founder and chairman of Alibaba Group, met with President-elect Donald Trump to discuss plans to create one million US manufacturing jobs and allowing small businesses to sell to China through the company's platforms. According to Mr. Smith, "Mr. Trump has laid out a pro-growth, pro-business, low tax, low regulation agenda - where he can show corporations around the world that we have the best work force, the best capital markets and the best technology. And that if you decide to do business here in America; we're going to make sure you don't have to give all of your money back to the government, you're going to have steady electricity, steady water and a steady work force. I think he's making America great again, but he's also making America very attractive for business again, Neil."
Is India’s Cash Ban A Test Case For The West? -Zero Hedge
"The decision to abolish the high denomination bank notes shouldn’t be taken lightly, as they represent almost 90% (!) of all bank notes in circulation and on top of that, India is predominantly a cash-nation. Most businesses and consumers prefer to seal their transactions with cash rather than plastic and digital money, and now hundreds of millions of Indians were forced to line up at the banks to try to convert their cash in new and approved notes....Within HOURS. That’s how fast 86% of a country’s cash stash was deemed to be ‘illegal’ and completely worthless. And this might very well happen in western countries as well."
Would a cashless world change your life for the good or bad? Find out for yourself by reading our two special reports on the subject: TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
There Is No Limit On Holding Gold -Somasundaram/Outlook India
"Somasundaram PR, Managing Director, India, World Gold Council, talks to Pragya Singh about the gold market and demonetization - and why it’s tough to regulate gold with strictures. What would be the effect of the government’s recently proposed limits on gold holdings? First of all there is no limit at all. You can hold any amount of gold. The government has only said that if it finds one ton of gold with you, it will ask you how you got it. Up to 500 grams you can keep, no questions asked....Why do Indians value gold more than other assets? That is because there’s a lot more uncertainty in India....gold makes more people credit-worthy. It drives economic activity beyond what we see....Gold is confidential, unlike land....You’re very bullish post-demonetization? Yes, you see, it is difficult to take gold away by regulating it. If you say everybody has to come and deposit their gold—hypothetically—then people will just hold it in locker."
1.6.17 - ANALYST: "Grab Some Gold!"
Gold last traded at $1,173 an ounce. Silver at $16.51 an ounce.
NEWS SUMMARY: Precious metal prices took a breather Friday after rising every day in 2017 on short-term profit taking. U.S. stocks rose, led by technology sector, despite disappointing job growth data.
Grab some gold because the Fed can’t figure out Trump, a growing chorus says -MarketWatch
"If you’re trying to make sense of the new world order or of the latest Fed minutes, here’s some good news: A few gold watchers have it all sorted out. The precious metal is jumping to a four-week high today because yesterday’s minutes are beating up the almighty dollar, says Naeem Aslam at Think Markets. Janet Yellen and her sidekicks are feeling really uncertain about the 'timing, size, and composition' of any infrastructure spending or other U.S. fiscal stimulus, the account of the Fed’s December meeting revealed. 'The Fed is surely betting that Donald Trump will be able to deliver when it comes to fiscal spending and tax reforms. But the reality may be far off what the market is positioned for,' Aslam writes.... 'As such — and despite the considerable retracement declines in precious metals in the back half of last year — we continue to like their long-term prospects in what we believe will be a lower real yield market environment."
I'm Really Into the Gold. Here Are the Reasons Why -Kass/Real Clear Markets
"While the animal spirits may have taken over the equity markets and have ignored the gold market, we should recall that there is a reason why Keynes called them animal and not human spirits. That's because animals are a lot dumber than humans! As excited as investors are about stocks, they are now uninterested in gold. I remain a minority and outside of consensus regarding gold. However, given the developing and concerning conditions -- and lack of credible policy responses -- that I now see falling into place, the uncertainty premium should be rising and gold may be a beneficiary this year....I believe the odds that gold will shine brightly this year are growing, and that the commodity may go from goat in 2016 to hero in 2017. I have moved to a large holding in gold."
Smart advice from Doug Kass, a respectable mainstream financial journalist. Although gold has lost some it's luster to short-term speculators, it remains a smart buy for the long-term investor for many common sense reasons as explained in our brand new 2017 Real Money Perspectives newsletter, Volatility's Last Stand , available free in print or online HERE
Where The December Jobs Were: Nurses, Waiters, And Waste Cleaners -Zero Hedge
"Something remains very broken with the US labor market: while the unemployment rate remains just shy of the lowest print since August 2007, rising fractionally to 4.7%, wage growth for most workers, as reported earlier, rose just 2.5%, far below the 4.0% it was when the unemployment rate last hit 4.7%.... Still, according to the BLS at least, some 155,000 seasonally adjusted jobs were added in December, arbitrarily goalseeked as they may have been. Where were they? Here is the answer: The most actively hiring sector was health care, which saw a whopping 70,000 increase in December jobs, nearly half of total....Professional and Business Services rose by a total of 30,500, the second highest gaining category....Another minimum wage job category that added jobs in December was Leisure and Hospitality, which added a grand total of 24,000 jobs. Here, the biggest contributor was an old favorite: employment in food services and drinking places, which continued to trend up in December (+30,000)."
Why Hong Kong going cashless is no small change -South China Morning Post
"Hong Kong prides itself on being up to date with the latest technology, and the government likes to call it a 'smart city', but to really embrace that concept, many believe Hongkongers must abandon the idea that cash is king and join the global trend towards electronic payments. Take Larry Salibra, a tech-savvy shopper, for example. He is frustrated that he is forced to carry cash whenever he is commuting around Hong Kong, even though at least a dozen e-payment options are available....‘I tend to go to restaurants that accept cashless payment. I don’t want to have to deal with cash,’ Salibra said. ‘I don’t want to deal with the responsibility of carrying it around and losing it.’ Hong Kong was one of the first places in the world with a cashless payment system when it introduced the Octopus card in 1997, but since then e-payment options have mushroomed globally....A deep-rooted cash culture, an older population reluctant to adopt new technologies, and the fear of ‘Big Brother’ snooping on transactions are some of the obstacles stopping Hong Kong from becoming truly cashless."
1.5.17 - 2017 Gold Bullishness on the Rise
Gold last traded at $1,181 an ounce. Silver at $16.63 an ounce.
NEWS SUMMARY: Precious metal prices shot up over 1% Thursday on bargain hunting and a sharply weaker dollar. U.S. stocks fell amid growing uncertainty about President-elect Trump's economic and trade policy changes.
Gold ETF Mechanics: An Infographic -Zero Hedge
"Gold-backed Exchange Traded Funds (ETFs) have grown strongly in scale and popularity over the last decade and their combined gold holdings now surpass all but the largest central bank gold reserve holdings. However, its important to understand the mechanics of these gold-backed ETF investment vehicles and to appreciate what they can and can't provide to gold investors. This infographic takes you on a tour of gold-backed ETFs and illustrates insights into how these products really work, including the following: The contemporary gold holdings of the world's largest gold-backed ETF platforms, Why holders of gold ETFs are holders of units / shares, not gold holders, The characteristics and common objectives of gold-backed ETFs, How the world's largest gold ETFs support and perpetuate the opaque practices of the London Gold Market."
Gold Traders Most Bullish Since 2015 on New Year Concerns -Bloomberg
"There’s one thing almost all gold traders and analysts agree on, now is a great time to own bullion. Those surveyed by Bloomberg were the most positive they’ve been on the metal’s price outlook since the end of 2015, with 14 saying they’re bullish on the metal, two bearish, and one neutral....'The euro zone has plenty of crisis triggers over coming months; Indian and Chinese buying remain strong and Trump’s policy threatens inflation,' said Adrian Day, president of Adrian Day Asset Management in Annapolis, Maryland, which oversees $190 million. 'All this is positive for gold.' The metal for immediate delivery has risen every day this year, and was up 1 percent at $1,175.38 an ounce as of 1:56 p.m. in London, according to Bloomberg generic pricing."
'Audit the Fed' bill gets new push under Trump -The Hill
"Rep. Thomas Massie (R-Ky.) and Sen. Rand Paul (R-Ky.) have re-introduced legislation to 'Audit the Fed,' after a similar effort stalled in the last Congress....Both chambers are controlled by Republicans long critical of the Fed’s policies, and President-elect Donald Trump has heaped scorn on the central bank since the beginning of his presidential campaign....'The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress,' said Paul. Under the bill, the Fed’s monetary policy deliberations could be subject to outside review by the Government Accountability Office....'It is time to force the Federal Reserve to operate by the same standards of transparency and accountability to the taxpayers that we should demand of all government agencies.'"
Here’s Why the Federal Reserve Is Worried About Donald Trump -Fortune
"At their December meeting, Trump's presidential win led members of the Fed to predict that interest rates would rise higher and more quickly than expected, in 2017 and beyond. That prediction cooled the stock market and put the brakes on the 'Trump Bump,' the rise in the stock market since the election, which has essentially stalled since mid-December. The Fed said in its minutes, which were released Wednesday, that its anticipated path of interest rates rose significantly following Trump's presidential win....If the Fed decides to raise interest rates faster than investors and business leaders currently expect, that could make Trump's proposed stimulus efforts less effective, because higher interest rates tend to slow the economy. While Trump has been critical of the Fed, he has said that he would prefer interest rates to stay low for the time being."
Donald Trump’s First 100 Days ... and Your Money! is a brand new Swiss America special report which outlines how the new Commander-in-Chief could impact world markets, the dollar, diplomatic relations and precious metals in the very early days of his presidency and beyond. The report also includes Trump's 26-point comprehensive "Contract With The American Voter".
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."