Swiss America Blog Archive


10.10.18 - Red October! Dow Slides 831 Pts!

Gold last traded at $1,193 an ounce. Silver at $14.32 an ounce.

NEWS SUMMARY: Precious metal prices rose on bargain-hunting and a weaker dollar. U.S. stocks fell over 3% as the October rout continues, led by tech stocks.

US Stocks Plunge Below Critical Support, Everything's Red In October -Zero Hedge
"The Dow just tumbled back into the red for October but it is Trannies, Small Caps, and Nasdaq that are bloodbathing this month as risk-parity deleveraging slams US equity markets below critical technical levels...As the major US equity indices break below critical support...Small Caps crash below the 200DMA...The S&P broke notably below its 50DMA...With bonds and stocks selling off...As Risk-Parity funds continue to delever...And as Bloomberg's Michael Regan notes, massive volumes in S&P 500 puts are part of the reason why equities extended losses so sharply in early trading."

gold vault It’s a global gold rush! Worried central banks snap up £13billion hoard amid growing fears of global volatility -This Is Money
"Central banks across the world are hoarding gold amid growing fears about global volatility and a possible downturn for financial markets. They have snapped up almost 275 tons of gold this year alone - 8 per cent ahead of 2017 - at a cost of more than £13 billion. Many national banks have been returning to the market for the first time in years. India bought eight tons, its first purchase since 2009. Poland bought nine tons during the summer, its largest buy since 1998. And Egypt acquired gold for the first time since 1978. Investors often buy gold to protect against falling stock markets and rising inflation. John Meyer, of brokers SP Angel, said: 'Now is a good time to buy gold, not least because President Donald Trump’s unpredictability makes the world a more uncertain place.'....Central banks own more than £1 trillion of gold and are expected to continue offloading dollars to buy more. World Gold Council managing director Natalie Dempster said: 'Gold is the only reserve asset that is completely free from political risk.'"

The Music Fades Out -Hussman/Hussman Funds
"In recent days, the combination of extreme valuations and unfavorable market internals has been joined by acute dispersion in daily trading data that often occurs within a few days of pre-collapse peaks in the market. My opinion is that the music has already quietly faded out like the end of a pop song, in a wholly uneventful way, and that even a surprise push to further highs would be marginal....When investors are inclined to speculate, they tend to be indiscriminate about it. But once the 'uniformity' of market internals deteriorates, valuations often matter suddenly, and with a vengeance. This is a lesson best learned before a crash rather than after one....With respect to the financial markets, present conditions already encourage a highly defensive, even hard-negative investment outlook. Evidence of an oncoming recession is not needed as a condition for a defensive position. To the contrary, a significant market decline will be among the factors that will warn of an oncoming recession...there's an open trap door under the equity market, and it’s a very long way down."

Trillions in US net worth vulnerable to recession: IMF -France 24
"A severe recession would slash US public wealth by about $5 trillion, causing vastly more damage to Washington's finances than just an increase in debt and deficits, the IMF warned Tuesday....Economists now say the chances of a recession in the United States are growing due to several factors, including trade tensions and mounting interest rates....The net worth of the United States has been in decline for nearly four decades. Worsening notably due to the global financial crisis, it had sunk by 2016 to negative 17 percent as a share of GDP, the report said. The federal mortgage giants Fannie Mae and Freddie Mac, which the government took over during the crisis, have lent a staggering amount - 44 percent of GDP - to the private sector. But the biggest source of risk comes from state and local government retirement pensions, which can lose money when Wall Street sinks - meaning the shortfall has to come out of local government budgets....The IMF found a severe recession would cut the value of America's publicly held assets by an amount equal to 26 percent of GDP by 2020. At current levels, that would amount to about $5 trillion."

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10.9.18 - Financial Crisis is Staring Us in Face

Gold last traded at $1,191 an ounce. Silver at $14.40 an ounce.

NEWS SUMMARY: Precious metal prices steadied on Tuesday on bargain-hunting and a flat dollar. U.S. stocks traded mostly lower as investors continued to focus on the impact of rising interest rates.

The Next Financial Crisis Is Staring Us in the Face -Ritholtz/Bloomberg
"All it takes to see it is a long look in the mirror. The financial crisis ripped through Wall Street 10 years ago, pushing the global economy to the edge of the abyss. One might think those searing experiences would have created a learning opportunity - for managing risk better, understanding structural imbalances in the financial markets, even learning a bit about how our own cognitive processes malfunction. Instead, we have little new wisdom or self-awareness to show for that traumatic event....You can have a committee of 10 geniuses that proves collectively to be a moron...Salomon Brothers’ Henry Kaufmann (aka Dr. Doom), now 91, made the observation that despite deregulation being a major factor in the crisis, it took less than a decade for many to forget. 'A financial market deregulated is like a zoo without bars,' he said. As memories of the crisis fade as the economy recovers, we find the seeds of the next crisis are already being planted. They are the exact same issues of debt and mismanaging risk and not understanding our own limitations. Failing to learn from our prior experiences, we seem doomed to repeat them. We only have ourselves to blame."

vote Housing stocks fall into bear market as interest rates climb to multiyear highs -CNBC
"Homebuilding stocks are getting crushed as they take a direct hit from the rising interest rates rattling financial markets this month. The iShares Home Construction exchange-traded fund, which includes homebuilding products and homebuilders, is down 27 percent since January. The SPDR S&P Homebuilder ETF is down 21 percent, also in a bear market. The sector has become viewed as undesirable with the 30-year mortgage rate hitting the crucial 5 percent level. In addition, the 10-year Treasury yield rose to a new seven-year high on Tuesday....'The run-up in rates over the past year is now weighing increasingly heavily on single-family housing demand, particularly since housing prices have risen so much,' said Mark Zandi, chief economist at Moody's Analytics. 'Affordability is now an issue for many potential home owners'....'When rates rise, people might respond by purchasing homes that aren't as expensive.'"

Republicans fear Democratic 'blue wave' spreading to once-safe districts -Reuters
"The last time U.S. congressional elections were held in this central Virginia district, Meg Sneed voted for the Republican incumbent, Representative Dave Brat. Her friend, Cheryll Lesser, did not vote at all. Last week, the two women sat in the second row at a campaign event in a martial arts studio listening to the Democrat running against Brat, Abigail Spanberger. They nodded in agreement with much of what she had to say. But the real reason they were there was basic: Donald Trump. They don't like the president, and they were not about to vote for anyone, like Brat, who supports him. 'More than the policy, it’s the animosity he is fostering within the country,' Sneed said of Trump. Voters such as Sneed and Lesser are a significant reason why Democrats now believe that in the Nov. 6 congressional midterm elections, the party can win more than the 23 seats they need to seize control of the U.S. House of Representatives. Some predict Democrats could take as many as 40 seats by flipping districts like Brat’s in Virginia....If Democrats do take the House, much of Trump’s agenda would be stalled, and his administration would fall under greater scrutiny."

Read our FREE report, How The Midterm Elections Will Affect Your Bottom Line to find out what a 'blue wave' might do to your financial future.

Google Exposed User Data, Feared Repercussions of Disclosing to Public -Wall Street Journal
"Google exposed the private data of hundreds of thousands of users of the Google+ social network and then opted not to disclose the issue this past spring, in part because of fears that doing so would draw regulatory scrutiny and cause reputational damage, according to people briefed on the incident and documents reviewed by The Wall Street Journal. As part of its response to the incident, the Alphabet Inc. unit plans to announce a sweeping set of data privacy measures that include permanently shutting down all consumer functionality of Google+, the people said. The move effectively puts the final nail in the coffin of a product that was launched in 2011 to challenge Facebook Inc. and is widely seen as one of Google's biggest failures. A software glitch in the social site gave outside developers potential access to private Google+ profile data between 2015 and March 2018....Google could also face class action lawsuits over its decision not to disclose the incident, Mr. Saikali said. 'The story here that the plaintiffs will tell is that Google knew something here and hid it. That by itself is enough to make the lawyers salivate,' he said.”

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10.8.18 - Why Gold Prices May Have Bottomed

Gold last traded at $1,188 an ounce. Silver at $14.32 an ounce.

NEWS SUMMARY: Precious metal prices eased back Monday on profit-taking and a firmer dollar. U.S. stocks fell for a third day on growing investor concerns over rising interest rates.

Midterms could lead to pivotal shift in power -Foreman/WTVA
"The midterm elections, a little more than a month away, are a national drama - with voters deciding whether Republican control of the House and Senate will give way to Democrats, who have been hankering for a chance to challenge the priorities and actions of President Donald Trump. But they are also an intensely local story as voters get ready to make their choices in 435 House and 35 Senate races and in 36 gubernatorial contests....In November, the faceoff to watch will be between Republican Sen. Ted Cruz (Texas) and his Democratic challenger Beto O'Rourke. This contest could upend the political order in the Lone Star State....Will Arizona elect its first Democratic senator since 1988?...If Democratic Rep. Kyrsten Sinema pulls out a win over Republican Rep. Martha McSally, it will be hard not to see the significance of a reliably red state voting blue....The electoral race that most encapsulates the potential of this political moment and the future of politics in our nation is Lucy McBath's contest to unseat Republican incumbent Karen Handel in Georgia's 6th Congressional District, just north of Atlanta....Will Georgia elect first black female governor?...The race for governor of Georgia could not be closer. Republican Brian Kemp and Democrat Stacey Abrams are deadlocked."

Democrats could sweep Congress in the November midterms. Might such a dramatic shift in power tip the economy backward and prompt a sorely-overdue stock market correction? Read our FREE report, How The Midterm Elections Will Affect Your Bottom Line to find out. Call 800-289-2646 or registering HERE.

crs interview Stocks Drop as Rates Hit 7-Year High -Fox Business
Swiss America Chairman Craig R. Smith discussing how rising interest rates are affecting the financial markets. Mr. Smith feels interest rates above 3% indicate we are in a true economic recovery, but he feels that in this "Goldilocks" economy, it is wise to take a defensive position which includes inflation protection. Watch now

Why gold prices may have already bottomed -Saefong/Marketwatch
"Gold prices may already have hit bottom for the year after declining for the past six months in a row....Lower prices have contributed to a boost in global central-bank purchases of gold. Other signs of a potential bottom for the metal include recent consolidation in the metals mining sector, which can mark a turnaround for the market....'I do believe gold has either reached a floor or is pretty close to one,' says Jeff Wright, executive vice president of mineral exploration company GoldMining Inc. Central banks didn't buy more gold just because of the price decline. 'Questions on U.S.-China trade ramifications [and] Brexit' helped boost demand for haven gold, says Wright. The preliminary U.S., Mexican, and Canadian agreement recently announced should also temper the U.S. dollar's strength, which may ease pressure on dollar-denominated gold prices, he says....Evaluating the rise in central bank gold buying, Natalie Dempster, managing director of Central Banks & Public Policy for WGC, says the move 'reflects a combination of factors, including the desire by some countries to dedollarize in response to political motivations and changing global trade patterns.'”

A Complete National Disgrace -Brooks/New York Times
"Over the past few years, hundreds of organizations and thousands of people (myself included) have mobilized to reduce political polarization, encourage civil dialogue and heal national divisions. The first test case for our movement was the Kavanaugh hearings. It's clear that at least so far our work is a complete failure. Sixty-nine percent of Americans in one poll called the hearings a 'national disgrace,' and the only shocking thing is that there are 31 percent who don’t agree. What we saw in these hearings was the unvarnished tribalization of national life....These hearings were also a devastating blow to intellectual humility. At the heart of this case is a mystery: What happened at that party 36 years ago? There is no corroborating evidence either way. So the crucial questions are: How do we sit with this uncertainty?....The core problem behind all of this is a complete breakdown in the legitimacy of our public institutions. The Supreme Court is no longer a place where justices dispassionately rule on the Constitution. It's a place where they cast predictable party-line votes....The Kavanaugh hearings were a look in the mirror, and a vivid display of how ugly things have become. What are we going to do about it?"

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10.5.18 - Who Will Trust America After This?

Gold last traded at $1,205 an ounce. Silver at $14.64 an ounce.

NEWS SUMMARY: Precious metal prices rose on bargain-hunting and a weaker dollar. U.S. stocks fell as less-than-expected jobs data boosted interest rates to fresh 7-year highs.

The U.S. Economy Is on a Sugar High -Bloomberg
"Across the U.S., companies are hitting the panic button. The Trump administration has levied 10 percent tariffs on $200 billion of Chinese goods, a charge that is expected to rise to 25 percent by 2019. This tops the tariffs on $50 billion of Chinese goods that were imposed in August, and is an effective tax on U.S. consumers, who will soon be paying more for everything from cosmetics to clothing to cars if they aren't already. Against that backdrop, it's becoming clear that many companies are rushing to secure products and materials before prices rise regardless of current demand. You could say they are in panic-buying mode....Evidence that panic buying has set in was seen in the September Chicago Purchasing Managers Index report, which is a bellwether for the broader national manufacturing sector....Artificial, tariff-driven panic buying pumps up GDP growth in the short term but ensures it will disappoint in the future. Look for fourth quarter estimates to be revised upwards and then look out below into the first of the year. And no, the first-quarter disappointment will not be the seasonal anomaly many economists typically ascribe to economic growth in the first three months of the year. In other words, it could be that much worse."

capitol hill In Kavanaugh fight, Capitol Hill shamelessly treats Supreme Court as political branch -Judge Napolitano/Fox News
"Harsh winds are blowing on Capitol Hill. The hoped-for and feared clash between Judge Brett M. Kavanaugh and his principal accuser, Dr. Christine Blasey Ford, has come and gone, with all of its calculated and spontaneous outbursts, as well as gut-wrenching emotion....After all interrogations were completed and after all Senate Judiciary Committee members made public statements, the committee voted along party lines, 11 to 10, to recommend sending Kavanaugh's nomination to the floor of the Senate....Then the committee voted by consensus to ask the White House to dispatch the FBI to reopen its background investigation of Kavanaugh for seven days. It is quite simply unprecedented and unheard of for the Senate Judiciary Committee to ask for FBI agents to investigate a nominee after he has testified about the subject of the investigation and after the committee has approved his nomination....Why is this nomination the subject of such rancor? I have argued countless times that the federal government has grossly exceeded the limitations the Constitution imposes on it. Wherever you are as you read these words, look around you and try to find something in your line of sight that is not regulated by the federal government. It will be nearly impossible....Should the right to life and the extent of the imperial presidency and whether the government is obligated to provide health care be decided by elected representatives or by the Supreme Court? From those who expect the high court to decide these issues - a court now evenly split, 4 to 4, along ideological lines - is it any wonder the Kavanaugh nomination is worth a bitter battle? The Supreme Court should not be political. It is the anti-democratic branch of government. Its constitutional obligation is not to do the people's will but to preserve personal liberty from the tyranny of the majority."

Exposing The Fallacy Of Synchronized Growth -Zero Hedge
"We have been hearing from international bodies, from central banks that we were living in a synchronized growth territory....Well, it wasn't the case. The case actually was that what we were being told was synchronized growth was actually synchronized debt growth. And that massive increase in debt that led to the highest level relative to GDP in history last year was creating massive problems, internal problems, in many economies that were getting used to cheap and easy money. A very small, minuscule and completely moderate reduction in the balance sheet of the Federal Reserve of less than $260 billion, has created this reckoning....So what happens is that we will likely see solutions that, instead of cleaning the system, will be solutions that will basically lead to more secular stagnation....Governments always see the problems of economies as a problem of demand, making a wrong diagnosis. Then they incentivize malinvestment and excess debt expecting that the collateral damage of higher debt will end up in a little bit more growth....The longer-term trend is that rising debt, more demand-side policies, and constantly subsidizing and bailing out the lower productivity sectors in order to avoid pain, generates lower growth, low productivity, and obviously, higher debt. Secular stagnation."

Who Will Trust America After This? -Bonner/Bonner And Partners
"The big winner from the new North American Free Trade Agreement (NAFTA) deal, now called the U.S.-Mexico-Canada Agreement (USMCA), is the Swamp. Here's Jeffrey J. Schott of the Peterson Institute for International Economics with the details: '[The deal] adds layer upon layer of costly new regulations that producers must follow to qualify for NAFTA’s low tariffs - layers virtually certain to drive up costs of autos for consumers and very likely reduce U.S. jobs in the auto sector. Very simply, the pact is intentionally designed to mismanage the auto sector, an important driver of production and high-wage manufacturing employment in all three countries.' The best trade deal is no trade deal at all. Get the feds out of the way; let people make whatever deals they want....Canada and the U.S. could trade as freely as New York and Alabama. But that would cut out the swamp critters. They make their money by interfering in free trade, not by facilitating it. And now, with the new NAFTA, dripping with greasy swamp water, they have a lot more room to maneuver. Free trade, meanwhile, takes place on dry land. It needs no lobbyists or insiders....Who would want to do business with a bully?....We don’t know. But it must be the question the Chinese are asking....But now, China’s credit bubble - which is even bigger than America's and is pumped up on even more absurd fantasies - is ready to pop at any moment. America's stock market bubble - with prices even higher, relative to GDP, than in 1929 or 2007 - is set to burst. The whole crackpot media bubble that keeps people focused on trivia and trash is ready to blow up, too."

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10.4.18 - US Economy May Be 'Too Good to be True'

Gold last traded at $1,201 an ounce. Silver at $14.59 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks fell sharply as interest rates hit the highest level since 2011, dampening investor sentiment.

Fed's Powell sees 'remarkably positive outlook' for economy that may be 'too good to be true' -CNBC
"Federal Reserve Chairman Jerome Powell sees the U.S. economy generating highly optimistic expectations, with the unusual combination of low unemployment and inflation fueling hopes for an extended expansion. Powell pointed out that after last week's Federal Open Market Committee meeting, a reporter asked him if the current conditions are 'too good to be true,' which he called 'a reasonable question.' 'From the standpoint of our dual mandate, this is a remarkably positive outlook,' he said, referencing forecasts from Fed officials, the Survey of Professional Forecasters and the Congressional Budget Office. 'Since 1950, the U.S. economy has experienced periods of low, stable inflation and periods of very low unemployment, but never both for such an extended time as is seen in these forecasts,' Powell added."

financial moon Bad Financial Moon Rising -Project-Syndicate
"A decade after the collapse of Lehman Brothers, global debt levels are higher than in 2008, lending has moved into the opaque realm of asset management and private equity, and the dollar is surging. Given the proliferating risks, another financial crisis and downturn could be in store. Economic forecasts today appear to be nothing more than hopeful extrapolations of recent growth. In reality, all is not well beneath the surface. Should another financial crisis materialize, the subsequent recession might be even costlier than the last one, not least because policymakers will face unprecedented economic and political constraints in responding to it. Perhaps most important, ultra-easy monetary policies have encouraged precisely the risky financial behavior that regulations were supposed to limit....In addition to ballooning global debt levels, sky-high property prices seem to be heading for a turn, and 'risk-free' long-term rates remain unusually low in many countries....All of these risks are raising the likelihood of a mass 'hunkering down' in the face of future shocks. Worse, should the global economy experience another significant downturn, policymakers will find it much harder to respond than they did before. Initially low policy rates mean that central banks will have very little room for traditional monetary easing."

Republicans predict House majority will be swept away by Democratic 'spending tsunami' -Washington Examiner
"Five weeks before critical midterm elections, House Republicans are outgunned and outmanned as a constellation of well-resourced Democratic groups dedicated to winning the majority overwhelm GOP defenses. From financially flush super PACs flooding the zone with advertising to grassroots organizations directing money and volunteers to targeted races, around a dozen political groups are fueling the Democratic Party's campaign to flip 23 seats and capture the House on Nov. 6. In a toxic environment driven by discontent with President Donald Trump, the barrage has become too much to handle for the two groups manning the barricades for House Republicans: the National Republican Congressional Committee, their official campaign arm, and the Congressional Leadership Fund, their designated super PAC. 'Our guys are taking a beating,' Rob Simms, a Republican consultant and former NRCC executive director, said Tuesday in an interview with the Washington Examiner....There's also Swing Left, a group that harnesses liberal opposition to Trump by funneling grass-roots volunteers to Democratic campaigns; Giffords PAC, a pro-gun control super PAC run by Democratic former Arizona congresswoman Gabrielle Giffords; and Independence USA, a super PAC financed by former New York Mayor Michael Bloomberg that is pouring millions into expensive media markets, like Los Angeles, where Republican incumbents are in trouble."

What will happen if the GOP loses control of Congress? Could it tip the economy and financial markets into a free fall? Find out now in our report, How The Midterm Elections Will Affect Your Bottom Line. Get it today by calling 800-289-2646 or registering HERE.

NKorea said to have stolen a fortune in online bank heists -WHIO
"North Korea's nuclear and missile tests have stopped, but its hacking operations to gather intelligence and raise funds for the sanction-strapped government in Pyongyang may be gathering steam. U.S. security firm FireEye raised the alarm Wednesday over a North Korean group that it says has stolen hundreds of millions of dollars by infiltrating the computer systems of banks around the world since 2014 through highly sophisticated and destructive attacks that have spanned at least 11 countries. It says the group is still operating and poses 'an active global threat.' It is part of a wider pattern of malicious state-backed cyber activity that has led the Trump administration to identify North Korea - along with Russia, Iran and China - as one of the main online threats facing the United States. Last month, the Justice Department charged a North Korean hacker said to have conspired in devastating cyberattacks, including an $81 million heist of Bangladesh's central bank and the WannaCry virus that crippled parts of Britain's National Health Service. On Tuesday, the U.S. Department of Homeland Security warned of the use of malware by Hidden Cobra, the U.S. government's byword for North Korea hackers, in fraudulent ATM cash withdrawals from banks in Asia and Africa. It said that Hidden Cobra was behind the theft of tens of millions of dollars from teller machines in the past two years. In one incident this year, cash had been simultaneously withdrawn from ATMs in 23 different countries, it said."

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10.3.18 - Liar Loans Again Fueling Mortgage Fraud

Gold last traded at $1,202 an ounce. Silver at $14.67 an ounce.

NEWS SUMMARY: Precious metals prices eased back Wednesday on profit-taking and a firmer dollar. U.S. stocks rose as bank shares jumped on rising interest rates following the release of strong U.S. jobs data.

It Took Only 10 Minutes to Send Gold and Silver Prices Soaring -Bloomberg
"Italy’s budget turmoil is giving gold and silver an added haven-demand boost at a time when fund managers are rebalancing their asset mix. Volume for the precious metals spiked on the second trading day of October, jolting prices that had been trading little changed just minutes earlier. The activity 'suggests that an investor is making a significant allocation in gold at the beginning of the month,' Tai Wong, the head of base and precious metals trading at BMO Capital Markets, said. In the 10 minutes ended 8:50 a.m. in New York, December gold contracts equal to almost 1.57 million ounces traded on Comex - almost 12 times the 100-day average volume for that time of day. In the case of silver futures, contracts representing more than 36 million ounces traded by 9:30 a.m., erasing earlier losses. 'This is a gold move and silver is catching up,' Wong said in telephone interview from New York. Money managers are giving precious metals a second look as the European Commission warned of a Greek-style crisis in Italy after Finance Minister Giovanni Tria's effort to promote his government's new fiscal strategy ended in failure on Monday. That's given gold and silver a boost, Wong said."

down payment Mortgage fraud is getting worse as more people lie about their income to qualify for loans -CNBC
"Home values are high, the housing market is competitive, and more buyers want to get in. As a result, an increasing number of buyers are lying and cheating. Mortgage fraud risk jumped more than 12 percent year over year at the end of the second quarter, according to CoreLogic, which measures six fraud indicators: identity, income, occupancy, property, transaction and undisclosed real estate debt....'Because home prices are rising, and demand is strong, most mortgage fraud in this type of market is motivated by bona fide borrowers trying to qualify for a mortgage,' said Bridget Berg, principal of fraud solutions strategy for CoreLogic. 'Undisclosed real estate liabilities, credit repair, questionable down payment sources and income falsification are the most likely misrepresentations.'"

Famed Harvard economist Martin Feldstein warns of looming recession -Fox Business
"The U.S. economy may be in such 'fantastic shape' that even Federal Reserve Chair Jerome Powell has struck a note of optimism, but according to famed Harvard economist Martin Feldstein, a decline in equity prices could push the economy into another recession....'If interest rates, long rates, get up to 5 percent for Treasurys and more for corporates, then I think we could see a sharp reversal in equity prices, and that could hurt consumer spending and push us into a recession,' he said on Wednesday during an interview with FOX Business’ Stuart Varney. If a recession does hit, Feldstein said, it would be unlike the 2008 Great Recession, which was in part so damaging because of the fragility of the banks and other financial institutions. 'But,' he said, 'if the economy turns down, the Fed is in no position to offset it when the federal funds rate is as low as 3 percent.'"

Why Americans Are Retiring Later -Bloomberg
"Something significant is happening in Social Security: People are retiring and taking their benefits later. These trends are at least in part the consequence of policy changes made in the early 1980s that were purposefully delayed in their implementation....According to data from the Current Population Survey tabulated by Courtney Coile of Wellesley College, 38 percent of those aged 62 to 64 were working in 1990. By 2017, that share had risen to 53 percent. Why are people delaying retirement and claiming their Social Security benefits later? One explanation is increased life expectancy and improved health....The ongoing retirement age changes have attracted very little recent public attention, even though the first tranche of the rise, to age 66, is already over, and we are almost halfway through the transition to 67, which will be complete by 2022....The rise in the full retirement age has two types of effects on when people decide to claim their benefits. The first is that it reduces the monthly benefit received at any given age....The second, and more important, effect is that the full retirement age creates a social norm influencing when people retire and also take their benefit."

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10.2.18 - Bull Market Run Echoes Late 1920s

Gold last traded at $1,207 an ounce. Silver at $14.69 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Tuesday on bargain-hunting despite a firmer dollar. U.S. stocks rose, as the DJIA hit a record high, boosted by gains in Intel and optimism around global trade.

Bitcoin and other cryptos won’t dent gold’s shine, says Morningstar analyst -Marketwatch
"Cryptocurrencies are a staple of most financial markets dinner conversations. The market value for the more than 2,000 individual coins is around $220 billion, well off its all-time high of $828 billion, but still 48% greater than this time last year. Yet, as much as the libertarian-leaning evangelists like to tag digital currencies as the new gold, there is no risk that virtual currencies that operate on a distributed ledger will knock the precious metal off its perch, according to Morningstar analyst, Kristoffer Inton. 'In order to assess the threat, we've created a framework to grade any asset class's viability as a safe haven by focusing on liquidity, functional purpose, scarcity of supply, future demand certainty, and permanence. Through this framework, we conclude that cryptocurrency does not and will not challenge gold as a safe-haven asset class,' he continued. A functional purpose remains an Achilles' heel for digital currencies, and especially bitcoin, the world's largest digital currency, As a payment option, bitcoin is light years behind traditional transaction services like credit cards."

cliff This bull market run has echoes of the late 1920s -Shiller/CNBC
"The longest bull market in history could be showing worrying echoes of one of the greatest crashes Wall Street has ever seen. Robert Shiller, professor of economics at Yale University and a Nobel laureate, says the steep run-up in this market rally is similar to the excesses of the 1920s before the October 1929 market crash and Great Depression. 'The 1920s is quite a legend that people are often thinking about,' Shiller said Friday on CNBC's 'Trading Nation.' 'I look at 1929 particularly as the end of the roaring '20s and it ended in a bout of speculation. Between May and September of '29 the stock market went up over 30 percent in just a few months.'....'At that time it seemed like it was a kind of gambling. The word gambling was used a lot to describe the market at that time so it became vulnerable. We're not exactly in that circumstance but we do have the market that has surged since 2009 so there is something of that spirit today,' he said."

Amazon to Raise Its Minimum U.S. Wage to $15 an Hour -Wall Street Journal
"Amazon.com Inc.on Tuesday said it was raising the minimum wage it pays all U.S. workers to $15 an hour, a move that comes as the company faced increased criticism about pay and benefits for its warehouse workers. The new minimum wage will kick in Nov. 1, covering more than 250,000 current employees and 100,000 seasonal holiday employees. The company said it also will start lobbying Congress for an increase in the federal minimum wage, which was set nearly a decade ago and is currently $7.25 an hour. 'We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,' said Jeff Bezos, Amazon's chief executive, in a statement...The new salary increase will cover part-time and temporary workers hired by agencies, Amazon said. Several large retailers have raised their minimum wages in the tight labor market. Walmart Inc., which employs 1.5 million people in the U.S., in January said it would raise starting hourly pay to $11 for all U.S. employees. That followed a similar move by Target Corp. , which raised its starting hourly pay from $11 last year to $12 in September and set plans to lift it to $15 by 2020."

The world's greatest investors are sounding the alarm -Black/Sovereign Man
"Howard Marks is the founder of the credit investment firm Oaktree Capital Management. And he’s been sharing his insights with the public in his Chairman memos since 1990. Even Warren Buffett stops what he's doing when Marks releases a new memo… Buffett says it’s 'the first thing I open and read.' Marks’ latest memo, titled The Seven Worst Words in the World, came out last week. And those seven words are - 'too much money chasing too few deals.' As you probably guessed, Marks is talking about how overheated the market is today and the end of the economic cycle....As our friend Jim Grant mentioned in our podcast, today we have boom era stock prices coupled with depression era interest rates - two things that are completely incongruent with one another....But it's not just Marks that is urging caution today. Ray Dalio, founder of Bridgewater, the world's largest hedge fund, says we’ll see a recession by 2020....The point is, it's time to be cautious. And it's time to start preparing for the inevitable downturn, whenever it hits."

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10.1.18 - Kavanaugh: America's Tipping Point?

Gold last traded at $1,191 an ounce. Silver at $14.50 an ounce.

NEWS SUMMARY: Precious metal prices eased Monday on profit-taking and a firmer dollar. U.S. stocks rallied as investors cheered news of Canada joining a trade deal with the United States and Mexico.

U.S. and Canada Reach Nafta Deal -Wall Street Journal
"The U.S. and Canada reached a dramatic, last-minute deal late Sunday night on revising the North American Free Trade Agreement, lifting a cloud of uncertainty over the quarter-century-old continental commercial bloc. The pending agreement will allow Canada to join an accord reached in late August between the U.S. and Mexico and diminishes the prospects for President Trump to follow through on his threats either to kill Nafta outright or to break the trilateral pact into separate pieces. The accord restores - for now, at least - harmony with two neighbors that Mr. Trump has repeatedly criticized in public, paving the way for him to hold a late-November signing ceremony with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto....Early Monday, Mr. Trump tweeted: 'It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, [reduces] Trade Barriers to the U.S. and will bring all three Great Nations closer together in competition with the rest of the world.'"

midterms Kavanaugh Is The Tipping Point For Decline & Fall Of America -Armstrong/Zero Hedge
"Kavanaugh’s hearing exposed the serious fact that the US Congress has become too polarized to even govern. What has been done to Kavanaugh is a serious disgrace for if the allegations of Ford are true, then she is at fault for not bringing charges back then and claiming it has defined her life. NOBODY should be allowed to bring any allegations against anyone decades after with no proof....The Kavanaugh vote was strictly down the party line and that demonstrates the problem. The hatred and degree to which a person is attacked goes beyond that person but seriously harms his entire family. This is now becoming a serious deterrent to anyone in the future looking at taking such a post. Will they find someone in your past you just hates you for some reason who now thinks it is pay-back time?....There is no doubt that historians will look back on the hearing as a turning point in this country when the Decline and Fall of the United States was at least exposed and some will make this event as the tipping point."

Will the Kavanaugh confirmation greatly impact the midterm elections? What are the financial and market risks? Find out in our brand new Special Report, How The Midterm Elections Will Affect Your Bottom Line. Get it today by calling 800-289-2646 or registering HERE.

BIS warns global economy risks crisis 'relapse' -France24
"The Bank of International Settlements said Sunday the global economy risked a 'relapse' of the crisis that rocked it a decade ago, warning there was little 'medicine' left to treat the patient a second time. 'Things look rather fragile,' BIS chief economist Claudio Borio told reporters in a conference call. 'There is little left in the medicine chest to nurse the patient back to health or care for him in case of a relapse,' he warned. Borio pointed out that central banks around the world had for years been administering 'powerful medicine' to counter the effects of the crisis, with 'unusually and persistently low interest rates.' This, he said, had helped boost economic activity, 'but some side effects were inevitable.' He pointed for instance to the crises that have recently erupted in Argentina and Turkey, describing them as 'withdrawal symptoms' as the central banks start cutting back the dosage....'Will the patient continue to mend, as looked likely until the first quarter of this year, or will there be a relapse?' he asked."

U.S. housing market faces '5-percent' test -Reuters
"The U.S. housing market, already struggling with tight inventory and rising building costs, faces a fresh headwind as 30-year mortgage rates rise close to the 5 percent threshold for the first time in years. Mortgage rates have surged to 4.97 percent from 4.23 percent in January, according to the Mortgage Bankers Association. Including fees, most 30-year mortgage costs have reached 5 percent or higher....'Higher interest rates is a headwind for housing, but it’s not a major obstacle right now,' said Ward McCarthy, chief economist at Jefferies & Co. in New York. Some economists believe home loan costs have to increase much higher to cause a slump in housing activity."

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9.28.18 - Central Banks Put Floor Under Gold

Gold last traded at $1,196 an ounce. Silver at $14.71 an ounce.

NEWS SUMMARY: Precious metal prices rebounded Friday on bargain-hunting despite a firmer dollar. U.S. stocks rose modestly, erasing earlier losses, as strong gains in Intel pushed tech shares higher.

Why America Has a Two-Track Economy -Ritholtz/Bloomberg
"Depending on where you live, your education and job, things are either pretty great or pretty bad. Which of these two scenarios describes the U.S. economy? No. 1. The economy is better than ever: The stock market is near a record high, wages are rising, there are more job openings than applicants, household wealth has hit a record, gross domestic product is growing briskly, house values have recovered from the bust, and consumer confidence is back - and so is America! No. 2. Real Americans are suffering: Inflation-adjusted wages are stagnant or even declining, economic mobility is nonexistent, gasoline is getting expensive as oil prices rise, labor force participation rates are stuck at levels not seen since the late 1970s, health care is brutally expensive and getting more so, and rents have been rising. There is a looming retirement crisis coming, as households have too little savings, and pensions are underfunded - the average American is getting crushed! In reality, this binary choice is a false construct and both of these scenarios are very true....The U.S. economic expansion is both robust and weak, broad and narrow, higher and lower than before the financial crisis. How these economic gains have been distributed is likely to have an impact for decades to come."

rediscovering gold Gold 101: Digging for opportunity? Here's what to know -CNBC
"The concept is as old as money itself. In uncertain times, it is wise to own gold. The precious metal 'typically serves as a hedge against inflation or a weakening dollar,' Douglas Boneparth, a New York-based Certified Financial Planner and a CNBC contributor, said in an interview with 'American Greed.' 'It's also used as a store of value.'....'The thinking is that historically gold has been used throughout time to barter goods. It has kind of a historical component to it,' Boneparth said. 'This is what we make our jewelry out of. This is something that generally denotes value.'....Gold prices may be lower these days in the face of a soaring stock market, but trading volume has been trending higher. Investors traditionally look to gold as a safe haven because its performance tends to be predictable. If the dollar or the stock market decline in value, gold typically rises as people look for a place to preserve their wealth. As a result, your financial advisor might suggest you own gold as a sort of insurance policy against market declines. 'Buying gold has typically paid off in times that haven't been so good, whether that is the Great Depression, or whether the dollar has gone up rampantly due to inflation,' Boneparth said....When it comes to physical gold, cashing in can be easy as well. 'You can drive through most downtowns in America and find a jewelry store or a cash-for-gold place that will literally take your gold and convert it to cash,'" Boneparth said."

Global Central Bank Buying Puts A Floor Under The Price of Gold -Zero Hedge
"The only reason the price of gold’s down on the year is because of a strong dollar. Actually - for how much the dollar's rallied this year, gold holding around the $1,200 range is very bullish. And if gold's been able to hold its own during a stronger dollar and aggressive Federal Reserve tightening - imagine what it will do once they decide to begin easing. . . Putting it simply - the price will soar. . . So, who's taking advantage of this weaker gold price? The Global Central banks - but specifically the Emerging Markets....Global Central Bank reserves are at a 20 year high - 34,000 tones - and has been primarily driven by China, Russia, and other Emerging Markets....This is extremely important since heavy and consistent Central Bank buying is putting a floor under the price of gold. All it takes now is just a little investment and retail demand to push the gold price much higher."

Facebook 'security issue' affecting nearly 50 million accounts -CNBC
"Facebook discovered a security issue where hackers were able to access information that could have let them take over as many as 50 million accounts, the company announced on Friday. The company said in a blog post its engineering team found attackers had found a weakness in Facebook's code regarding its 'View As' feature. 'View As' lets users see what their profile looks like to other uses on the platform. This vulnerability also allowed the hackers to get access tokens - digital keys which let people stay logged into the service without having to re-enter their password - which could be used to control other people's accounts. Almost 50 million accounts were affected. Shares were down almost 3 percent after the news was released."

SEC Sues Elon Musk For Fraud, Seeks Removal From Tesla -Wall Street Journal
"Securities regulators on Thursday sued Elon Musk for fraud and sought to remove him from Tesla Inc., raising doubts about the future of an electric-car maker synonymous with the audacious entrepreneur. The SEC’s lawsuit - sparked by Mr. Musk's August comments that he had lined up funding for a corporate buyout - seeks civil penalties against Mr. Musk and asks a court to bar him from being the officer or director of a public company. 'These misleading statements, none of which were pre-cleared or reviewed by anyone at Tesla, caused significant market confusion and disruption,' said Steven Peikin, the SEC’s co-director of enforcement....The threat of a Tesla without Mr. Musk raises questions about the future of the auto maker born out of the vision of making electric vehicles popular....'Raising new capital without him would be very difficult because the risk profile is very different for the investor without him,' David Whiston, an analyst for Morningstar Research Services, said, 'Without future capital, Tesla can't grow.' 'Without Musk, Tesla is just an automaker burning too much cash and holding too much debt,' Mr. Whiston said."

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9.27.18 - Executives Sell Off Company Stock at Record Pace

Gold last traded at $1,187 an ounce. Silver at $14.29 an ounce.

NEWS SUMMARY: Precious metal prices dipped Thursday on profit-taking and a stronger dollar. U.S. stocks rose as investors shrugged off political uncertainty and focused on gains in Apple which led tech shares higher.

Why Are So Many People Talking About The Potential For A Stock Market Crash In October? -Zero Hedge
"Every year, people start talking about a possible stock market crash in October, because everyone remembers the historic crashes that took place in October 1987 and October 2008. Could we witness a similar stock market crash in October 2018? Without a doubt, the market is primed for another crash. Stock valuations have been in crazytown territory for a very long time, and financial chaos has already begun to erupt in emerging markets all over the globe. When the stock market does collapse, it won’t exactly be a surprise...I did not know this, but it turns out that the month with the most market volatility since the Dow was first established has been the month of October....So if something big is going to happen in the market in 2018, it is probably going to happen in the coming weeks...As Jesse Colombo has pointed out, stocks are more overvalued right now than they were just before the great stock market crash of 1929....John Hussman ultimately expects 'two-thirds of market capitalization' to vanish....The truth is that the economy is not nearly as good as you are being told, and things could literally start breaking loose at any moment. Unfortunately, as a society we have not learned very much from history, and most Americans seem to think that this bubble of artificial prosperity is going to last indefinitely."

Executives are selling off their company's stock at a record pace -CBS News
"Corporate insiders are dumping stock in their companies at a rate not seen in 10 years. With September not yet over, stock sales by company executives reached $5.7 billion, according to data from TrimTabs Investment Research - the highest September in a decade. August's $10.3 billion in insider sales also reached a 10-year record. At the same time, stock buybacks are roaring ahead, pumping up U.S. share prices to new heights. Companies this year have announced $827 billion in spending to purchase their own shares - well above the buybacks that took place during all of 2007, which set the previous annual record."

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"'Insiders have been committing lots of money for stock buybacks, and they're not doing buybacks because they think stocks are cheap. They're doing to it to pump up the stock so they can sell it,' said David Santschi, director of liquidity research at TrimTabs.....'Stock buybacks have seemed to be the main use of the corporate tax savings this year. Acquisitions haven't been particularly high, and we're not seeing much wage growth...Insiders are doing one thing with their own money, and another thing with shareholders' money.' Santschi added."

The Kavanaugh Standard -Wall Street Journal
"Judge Brett Kavanaugh's nomination to replace Anthony Kennedy on the U.S. Supreme Court is a watershed event that will define America's politics for years. If the Kavanaugh nomination fails because of the accusations made against him by Christine Blasey Ford and others, America's system of politics, indeed its everyday social relations, will be conducted in the future on the Kavanaugh Standard. It will deepen the country's divisions for a generation. The Kavanaugh Standard will hold that any decision requiring a deliberative consideration of contested positions can and should be decided on just one thing: belief. Belief is sufficient. Nothing else matters....Once the decades-old accusations had been made against Judge Kavanaugh, with no corroboration available or likely, the Senate Judiciary Committee had no practical or formal basis for enlarging the discussion about his nomination. For everyone, the way forward was into a fog. Then something new happened. Half of the Senate Judiciary Committee created this standard: 'I believe Christine.' It is an inescapable irony that the Kavanaugh Standard - 'I believe' - is being established inside the context of a nomination to the highest U.S. court....If Democrats regain control of Congress and the presidency, this is how they will govern - with belief alone sufficient as justification for imposing policy....Ultimately, this drama comes down to the choices about to be made by Republican Sens. Jeff Flake, Susan Collins and Lisa Murkowski. The question is whether the Senate's advice and consent for appointment to the U.S. Supreme Court should be reduced to simple secular belief."

How much does average US household have in a savings account? -USA Today
"It's easy to paint a pretty bleak picture about the state of Americans' savings. In fact, earlier this year, I reported that 40 percent of U.S. adults don't have enough savings to cover a mere $400 emergency. But new data from Magnify Money tells us that Americans may not be doing as poorly as we thought on the savings front. Case in point: The average household's savings account balance is $16,420. However, that number doesn't tell the whole story....That number starts to look less rosy when we dig a little deeper. While the average U.S. savings account contains $16,420, the median savings account balance across American households is $4,830. And when you have a median that's considerably lower than the average, it means that most people have less than the average....When we look at the median savings account balance of $4,830, we can conclude that most Americans don't have enough money in the bank to cover a single month's worth of expenses. And that's a problem."

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9.26.18 - Silver Eagle Coins Sellout at U.S. Mint

Gold last traded at $1,199 an ounce. Silver at $14.40 an ounce.

NEWS SUMMARY: Precious metal prices eased Wednesday amid dollar strength and Fed rate expectations. U.S. stocks rose as investors looked ahead to the Federal Reserve's latest decision on U.S. monetary policy.

Federal Reserve Readies Third Interest-Rate Increase of 2018 -Wall Street Journal
"The Federal Reserve is prepared to raise short-term interest rates by a quarter percentage point after its two-day policy meeting concludes Wednesday, the eighth such move since late 2015. Officials will also present revised projections of future rate moves along with their outlook for inflation, employment and growth....In June, a narrow majority of officials projected the Fed would raise rates a total of four times in 2018. That group is likely to grow this week as the Fed lifts its benchmark federal-funds rate for a third time this year, to a range between 2% and 2.25%. The bigger question is how the rate path next year has evolved and how Mr. Powell might characterize the balance of risks at the press conference....Financial turbulence abroad represents the biggest risk to the Fed's plans. Officials could hold off on future rate increases if a stronger dollar causes greater upheaval in emerging markets or trade tariffs lead to a slowdown in China that sparks global market selloffs."

superman The Fed's In A Box And People Are Starting To Notice -Dollar Collapse
"It's long been an article of faith in the sound money community that the Fed, by bailing out every dysfunctional financial entity in sight, would eventually be forced to choose between the deflationary collapse of a mountain of bad debt and the inflationary chaos of a plunging currency. That generation-defining crossroad is finally in sight. On one hand, a tight labor market is pushing inflation to levels that normally call for higher interest rates. Today’s Fed-heads are old enough to remember the 1970s, when failure to get inflation under control produced a decade-long monetary crisis that was only resolved with (not exaggerating here) interest rates approaching 20%. On the other hand, the yield curve - the difference between long-term and short-term interest rates - is trending towards zero and will, if it keeps falling, invert, meaning that short rates will exceed long. When this has happened in the past a recession has ensued....Sounds like the Fed is choosing door number one, focusing on inflation and tightening policy to counter it. But this time the risks are a lot higher. First, higher interest rates will, other things being equal, make the dollar stronger....Second - and far more systemically dangerous - corporate, government and consumer debt are all at record levels. Send the economy back into recession with higher interest rates, and government tax revenues, corporate sales and profits, and personal incomes all fall at the same time interest costs are soaring because of those higher rates."

Drop in silver prices to 32-month lows prompts sellout of Silver Eagle coins at U.S. Mint -Marketwatch
"A drop in silver prices this year has attracted investors seeking a bargain, prompting a temporary sellout of the 2018 American Silver Eagle bullion coins at the U.S. Mint this month. 'The sellout of Silver Eagles implies that demand for physical [silver] has recently been increasing,' says Chris Gaffney, president of World Markets at TIAA Bank....'The U.S. Mint and the authorized dealer network were caught off guard as bargain-hunting physical buyers returned to the market ahead of $14' an ounce, says Peter Grant, vice president of Chicago-based Zaner Metals....Edmund Moy, director of the U.S. Mint from 2006 to 2011, says the recent sellout of the 2018 coins from strong growth in demand was unusual....Moy says the 'surge was likely caused by silver speculators spurred by the gold/silver ratio,' which currently stands at around 1 to 85. That means it took about 85 ounces of silver at $14.15 to buy one ounce of gold at just over $1,202. The historical norm is 1 to 50."

Right now silver prices are hovering very near the raw production cost of $15 per ounce. For all theses reasons and many more, now is the time to rediscover silver! Get a complimentary copy of Swiss America's new Silver Report today.

"We Have Made Mistakes" On Data Privacy, Google Executive Tells Senate -Zero Hedge
"In what will be the latest in a string of tech-giant mea culpas, Google is planning to admit that it has made 'mistakes' when it comes to privacy issues when a company executive delivers testimony to the Senate Commerce Committee on Wednesday, according to Reuters. 'We acknowledge that we have made mistakes in the past, from which we have learned, and improved our robust privacy program,' Google chief privacy officer Keith Enright is planning to say, according to a draft of his written testimony. However, the testimony didn't identify specific mistakes, and - what's worse - Google's behavior has been anything but contrite. And the company disappointed many privacy advocates earlier this week when it said it would continue to allow third-party apps to scan the contents of users' Gmail accounts. The company was roundly criticized for the practice over the summer when it first came to light....Google parent Alphabet has a checkered history of safeguarding privacy concerns, as Reuters points out: 'In August, Alphabet was sued and accused of illegally tracking movements of millions of iPhone and Android phone users even when they use a privacy setting to prevent it.'"

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9.25.18 - Gold Cheap. Inflation Coming. You Do the Math.

Gold last traded at $1,205 an ounce. Silver at $14.49 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on dollar weakness as the Fed meeting begins. U.S. stocks rose led by gains in banks and energy shares, but renewed trade worries kept the market's gains in check.

Fed hikes give cash appeal; stocks no longer only game in town -Reuters
"The U.S. Federal Reserve's anticipated interest rate hike this week will make cash the most attractive it has been in about a decade and end the era of stocks as the only game in town. During this bull market which in August broke the record as the longest ever, interest rates were so low that most fixed income assets other than junk bonds yielded less than the inflation rate or the dividend yield on the S&P 500. This drove yield-hungry investors to stocks, the one asset that delivered a real rate of return, or return on investment adjusted for inflation. 'One of the big influences in the market over the last decade has been that bonds as an alternative have been pretty much out of the market,' said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago. 'There is historically a tug of war between stock investing and bond investing and since the financial crises the bond market has been in the tug of war with one arm tied behind its back,' he said. That may be set to change....The stock market, meanwhile, is bracing for the rate hike at a time when the forward price-to-earnings(P/E) of 17.2 versus the historic average of 15."

barrons Gold Is Cheap. Inflation Is Coming. You Do the Math -Barrons
"Gold has gotten a bad rap....But this out-of-favor asset class now deserves a place in investment portfolios. Compared with stocks and other financial assets, gold looks inexpensive. More important, inflation is starting to pick up in the U.S. and in much of the world as central banks shrink their enormous balance sheets. And gold has represented a good defense against inflation eroding the value of a stock or bond portfolio. Over time, it has held its value against the dollar. Gold was $20.67 an ounce 100 years ago and that bought a good men’s suit. At $1,200 an ounce, the same is true today. 'Gold is rare, and it's hard to rapidly increase the supply of it,' says Keith Trauner, co-portfolio manager of the GoodHaven mutual fund, which holds Barrick Gold, a leading mining company. 'People have historically viewed it as a hedge against government depreciation of local currency' There are an estimated six billion ounces of gold in the world, worth more than $7 trillion, about 30% of the value of the S&P 500...'Virtually every government in the world is trying to promote inflation partly because there is so much sovereign debt,' Trauner says. When there is so much debt, he contends, governments have three choices: default, restructure, or inflate the currency. 'Politicians, when given the chance, will choose the latter.'....Gold rallied 17% from the collapse of Lehman Brothers on Sept. 15, 2008, until the stock market bottomed on March 9, 2009 - a period during which the S&P 500 fell more than 40%....U.S. stocks are at record levels exactly at a time when global stress - trade tensions, populist nationalism, and the like - appears to be growing. This may be an opportune moment for investors to shift at least a portion of their portfolios to gold."

We agree! Now is the time to Rediscover Gold (and Silver) which are both exceeding great values. Learn more in our free The Timeless Truth About Gold and Silver report.

GOP Must Confirm Kavanaugh or Kiss Midterms Goodbye -Rush Limbaugh
"So Chairman Grassley has a job to do here, because, if he gives Democrats enough time, they'll produce a woman claiming to be Kavanaugh's secret Russian wife...and I'll tell you something else, which everybody also knows. If the Republicans do not get this vote taken and have Kavanaugh confirmed, you can kiss the midterms goodbye. You can kiss goodbye holding the House and you can kiss goodbye holding the Senate. Because whatever the Democrats think of their base, the one thing I know that if you guys fold on this and cave and keep bending over backwards… You've done that enough."

Is the Kavahaugh confirmation a major watershed issue for the GOP as Limbaugh says? What are the financial risks if our nation veers to the left on Nov. 6th? Find out in our brand new Special Report, How The Midterm Elections Will Affect Your Bottom Line. Get it today by calling 800-289-2646 or registering HERE.

Conscious Capitalism Is Far From Dead -Fortune
"Good business leaders constantly evaluate what is happening around them and adjust accordingly. The same is true of conscious capitalists....So what exactly is conscious capitalism? It's a way of thinking about capitalism and business that reflects where we are in the human journey. It considers the state of our world today and recognizes the innate potential of business - with its ability to harness intellectual, financial, and human resources - to make a positive impact on the world. Conscious capitalists run their businesses with a higher purpose in mind. They recognize that in seeking winning solutions for all stakeholders - customers, employees, suppliers, and the communities where they operate - they are also more likely to benefit shareholders....That has certainly been the case at the company I founded, Panera. In nearly three decades, Panera has grown to nearly 2,300 bakery-cafes, 120,000 associates, and sales of $6 billion....Businesses should be applauded for attempting to tackle thorny social issues no one else will. They should also be applauded for evolving their strategies as times and issues change."

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9.24.18 - Next Crash: ‘Worse than the Great Depression’

Gold last traded at $1,204 an ounce. Silver at $14.34 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Monday on a flat dollar. U.S. stocks fell amid political uncertainty and the cancellation of U.S.-China trade talks.

Paulson's Shareholders Gold Council finally launches -Bullionstar
"In September 2017, news emerged of a plan to launch a broad-based 'Shareholders' Gold Council' to address poor shareholder returns and under-performance in the gold mining sector. This plan was spearheaded by well-known hedge fund Paulson & Co and its founder John Paulson....Throughout the summer, there was no news flow whatsoever about the new Council and the launch appeared delayed. The existence of such a delay was officially confirmed this week when Bloomberg ran a story confirming that the grouping has just been launched....According to Bloomberg's story which is titled 'Paulson Joined by 15 Investors in Council to Oversee Gold Miners', the new Shareholder’s alliance, in addition to founding hedge fund Paulson & Co, includes institutional and hedge fund firms Delbrook Capital, Tocqueville Asset Management, Livermore Partners, Kopernik Global Investors, Apogee Global Advisors and Equinox Partners....GATA has also asked Paulson if it can join the Shareholders Gold Council, another possibly tall order for Paulson's new grouping to fulfill, especially since the new coalition is already opaque with four large institutional members not having the courage to publicly put their names on record."

silver report Five Reasons Silver Prices Should Go Higher -The Silver Report
With gold prices near $1,200 an ounce, buying this precious metal can be unaffordable for some. But silver, know as everyman's gold, offers great growth potential! Here are just five reasons we explain in The Silver Report why we believe silver offers the best opportunity in years... 1. Rising Demand - Industrial/investment demand, as well as new infrastructure applications. 2. Falling Supply - Some experts say we have now reached “peak silver” production. 3. Rising Inflation - In addition to being an industrial metal, silver also serves as a critical inflation hedge. 4. Ratio Trading - Today the gold-to-silver ratio is over 80-to-1, which means silver is very undervalued compared to gold. 5. Near Mining Cost - Right now silver prices are hovering very near the raw production cost of $15 per ounce. For all theses reasons and more, now is the time to rediscover silver! Get a complimentary copy of The Silver Report today.

Starting in 2020, solar panels will be required on all new California houses -New Atlas
"As of Jan. 1st, 2020, all new homes built in California will be required to have solar photovoltaic systems. The ruling is part of the California Energy Commission's newly-instituted 2019 Building Energy Efficiency Standards, aimed at reducing greenhouse gas emissions 'by an amount equivalent to taking 115,000 fossil fuel cars off the road.'....Along with the addition of solar panels, new California homes will also have to meet updated thermal envelope standards, which prevent heat transfer from the building's interior to the exterior and vice-versa....And yes, these requirements will initially cost homeowners more money, although they should save cash in the long run. According to the California Energy Commission, adhering to the 2019 standards will add about US$9,500 to the cost of constructing an average new home, but then decrease energy and maintenance costs by $19,000 over the next 30 years."

Next crash will be ‘worse than the Great Depression’: experts -New York Post
"Ten years ago, it was too-easy credit that brought financial markets to their knees. Today, it could be a global debt of $247 trillion that causes the next crash. After a decade of escalating US household debt brought on by low wages and the national debt more than doubling over the same time frame, to $21 trillion, debt could soon put the brakes on this economic recovery, analysts warn. 'We think the major economies are on the cusp of this turning into the worst recession we have seen in 10 years,' said Murray Gunn, head of global research at Elliott Wave International....'We won’t be able to call it a recession, it's going to be worse than the Great Depression,' said economic commentator Peter Schiff....'People will look to central banks to help them out, but the authorities will be found wanting,' Gunn warned. 'Our prediction is that central banks will go from being feted for 'saving the world' in 2008 to being vilified for being impotent in the coming deflationary crash.'"

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9.21.18 - Central Banks Buying Up Gold

Gold last traded at $1,201 an ounce. Silver at $14.35 an ounce.

NEWS SUMMARY: Precious metal prices eased back as markets focus on next week's interest-rate decision. Markets remain stable ahead of next week's Federal Reserve gathering.

There's a global currency crisis unfolding that's sure to catch up to the US - CNBC
"A review of the values of 143 global currencies indicates that so far this year, more than 80 percent have fallen in value. Another eleven appear to be pegged to the dollar and 13 have risen in value. Of the 13 that have increased in value, only six are up more than 1 percent versus the dollar. There have been outsized declines in countries like Venezuela (down 99 percent), Argentina (53 percent) and Turkey (38 percent). However, Brazil is down 20 percent, Russia 15 percent, India 11 percent, Sweden 10 percent, and the Philippines 8 percent. Big economies like China are experiencing a 5 percent currency value decline while the Euro is off by 3 percent.....If the currency of a nation declines meaningfully over a sustained period, it creates significant problems for that nation's economy. Inflation increases. There is pressure on interest rates to rise. Resources must be diverted from economic development and put into financial payments much of which could be sent overseas..... The point here is that persistent rate increases in the United States may be having very negative impacts on the global economy. When well over 100 nations see the value of their currencies drop it is highly unlikely that the United States can pursue its economic goals unaffected. In the mid-1980s when the Fed in the United States created a similar problem, the largest nations came together at the Plaza Hotel in New York and forced a change in approach. One must start thinking about a similar conference if the current trends continue. They cannot be ignored. The poet John Donne wrote many decades a go that ‘no man is an island.’ In a global economy, no nation is either."

inequality Household Wealth Hits A Record $107 Trillion... There Is Just One Catch - Zero Hedge
"In the Fed's latest Flow of Funds report released at noon today, the Fed released the latest snapshot of the US 'household' sector as of June 30, 2018. What it revealed (alongside major historical revisions) is that with $122.7 trillion in assets and a modest $15.7 trillion in liabilities, the net worth of US households rose to an all time high $106.9 trillion, increasing for 11 consecutive quarters and up $2.2 trillion as a result of an estimated $559 billion increase in real estate values, as well as a $1.7 trillion increase in various financial assets like corporate equities, mutual and pension funds, and deposits as the market soared to just shy of new all time highs in the second quarter, even if it needed some time in Q3 to reach a new record....And while it would be great news if wealth across all of America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans. In other words, roughly 75% of the $2.2 trillion increase in assets went to benefit just 10% of the population, who also account for roughly 76% of America's financial net worth. It also means that just 10% of the US population owns roughly $93 trillion of all US assets, while half of the US population has virtually no wealth, and if anything it is deeply in debt."

Central Banks Gold Buying In H1 Fastest Pace In 3 Years - WGC- Kitco
"Ongoing questions over the U.S. dollar's role as the world's reserve currency is creating new interest in gold as a reserve asset, according to the latest market update from the World Gold Council. In a report published Thursday, the WGC said that central bank gold demand has increased 8% in the first six months of the year, totaling 193.3 tonnes of gold, the sharpest increase in the first half of the year since 2015. 'Looking ahead, we expect central bank demand to remain buoyant. Diversification will continue to be an important driver of demand, as will the transition to a multipolar currency reserves system over the coming years,' the analysts said in the report. So far Russia has been the standout in the gold market as the nation's central bank has bought 131.3 tonnes of gold so far this year. Rounding out the top three are Turkey and Kazakhstan. However, in recent years the WGC has noted that other emerging market central bank including Egypt, India, Indonesia, Thailand, Philippines, Mongolia and Iraq have bought gold this year. The analysts noted that central banks are turning to the yellow metal in an attempt to diversify their assets in a world with few attractive options. 'Against the backdrop of persistent low and negative bond yields and limited high-quality investment options, it makes sense for central banks to turn to gold as a means to increase portfolio diversification,' the analysts said."

Japan hit by another cryptocurrency heist, $60 million stolen - Reuters
"Japanese cryptocurrency firm Tech Bureau Corp said about $60 million in digital currencies were stolen from its exchange, highlighting the industry’s vulnerability despite recent efforts by authorities to make it more secure. Tech Bureau, which had already been slapped with two business improvement orders by regulators this year, said its Zaif exchange was hacked over a two-hour period on Sept. 14. It detected server problems on Sept. 17, confirmed the hack the following day, and notified authorities, the exchange said on Thursday...Documents seen by Reuters on Thursday showed Japan’s Financial Services Agency would conduct emergency checks on cryptocurrency exchange operators’ management of customer assets, following the theft. FSA officials were not immediately available for comment. Japan’s crypto exchanges have been under close regulatory scrutiny after the theft of $530 million in digital coins at Tokyo-based cryptocurrency exchange Coincheck Inc. in January. Coincheck has since been acquired by Japanese online brokerage Monex Group Inc. In the industry-wide check that followed the Coincheck theft, FSA said it found sloppy management at many exchanges, including the lack of proper safeguards for client assets and basic anti-money laundering measures."

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9.20.18 - US Jobless Claims Fall to 49-Year Low

Gold last traded at $1,208 an ounce. Silver at $14.35 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on a falling U.S. dollar. U.S. stocks rose as the Dow hit its first record high since January amid gains in Apple and a decrease in trade war fears.

Gold hits near 1-week high as easing trade concerns hurt dollar -Reuters
"Gold hit its highest in nearly a week on Thursday as the dollar slumped, its safe-haven appeal lessened by fading fears over Sino-U.S. trade tensions and as investors opted for assets perceived as more risky, like stocks. The dollar hit a nine-week low against a basket of major currencies, while world stocks bounced up amid continued relief that fresh U.S. and Chinese tariffs on reciprocal imports were less harsh than originally feared. 'America is killing itself with these trade tariffs. (They) actually hit America far harder than (they) hit China. The idea that the dollar is all mighty and going to continue to rise is not true,' said Alasdair Macleod, head of research at GoldMoney.com....A new Reuters poll showed unanimous agreement that a trade war with China was bad economic policy for the United States, predicting U.S. growth would slow to 2.0 percent in the fourth quarter, less than half the last reported rate of 4.2 percent....Investors are waiting for what is expected to be a hawkish meeting of the U.S. Federal Reserve next week, where the central bank is widely expected to raise benchmark interest rates."

stock market The Market Crash Is Coming As An Economic 9/11 Approaches -Celente/King World News
"Happy Birthday Panic of '08. Ten years ago marks the start date of the equity market and real estate meltdown that hit the United States and spread across the globe. From Europe to Asia, from Africa to South America, few countries were spared. Are you prepared for the next financial crisis, the exploding debt bomb that will rock the world?....Back then, as now, despite the facts, the Wall Street cheerleaders who want to keep the equity market Ponzi schemes going, dismiss the facts that the recovery since the Great Recovery was no true recovery at all. It was fueled with floods of cheap money that has now reached an unsustainable $250 trillion in global debt....The market crash is coming...Beyond the economic fundamentals, increased tensions in the Middle East and rising oil prices will exacerbate the equity market shock. TREND FORECAST: While we do not provide financial advice, we forecast gold, the ultimate safe haven asset, which we also forecast is at or near its bottom price point, will rapidly escalate beyond $2,000 per ounce as the markets melt down. Also, be prepared for social unrest to escalate… guns, gold and a getaway plan."

U.S. Jobless Claims Fall to 49-Year Low for Third Straight Week -Wall Street Journal
"The number of Americans filing applications for new unemployment benefits fell to a new 49-year low for the third straight week, though Hurricane Florence's effect on the jobs market remains unclear. Initial jobless claims, a proxy for layoffs across the U.S., fell by 3,000 to a seasonally adjusted 201,000 in the week ended Sept. 15, the Labor Department said Thursday. It was the lowest level since December 1969, and less than the 210,000 claims economists surveyed by The Wall Street Journal expected. However, it is possible that jobless claims were somewhat depressed because those who lost their jobs due to the storm were unable to file for benefits last week....Jobless claims have remained low in recent years, as the labor market continues to tighten and managers face difficulty finding qualified employees."

How the South's New Progressives Are Taking On the GOP -Rolling Stone
"In Georgia, Florida and Texas, straight-talking liberals are topping the Democratic tickets for the first time in history - and Stacey Abrams, Andrew Gillum and Beto O'Rourke are campaigning circles around the race-baiting greed-heads who have dominated Southern politics with no meaningful resistance from feckless Democrats for four long and destructive decades. Long accustomed to running against white 'centrist' patsies still clinging superstitiously to the old Bill Clinton script for winning in Dixie...the fat-and-happy Republicans have been caught completely off guard by this strange new breed of Democrat....The Republican Party's great fear - that the newly liberated progressives will undo its stranglehold on the South, without which it can't possibly carry national elections - has indeed proved paralyzing....Even if they all come up short on Election Day, their campaigns will have upended Southern politics in places that will only continue to grow more diverse, younger and more receptive to progressives who look and talk like 21st-century Southerners."

The American eagle once flew with two strong wings, right and left. Our two dominant political parties both used to be centrist and pro-free enterprise, pro-private property, and pro-individualism. But that's all changing quickly today. Our nation is polarized. The emergence of a socialist Democratic Party could have huge consequences that will affect every American investor and saver. How? Find out in our brand new Swiss America Special Report. Get it today by calling 800-289-2646 or registering HERE.

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9.18.18 - Silver's Discount Biggest Since the 1990s

Gold last traded at $1,202 an ounce. Silver at $14.18 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Tuesday on a flat U.S. dollar. U.S. stocks rose as the latest tariffs on U.S. and Chinese goods are not as bad as previously feared.

Gold Continues ‘Slow Dance’ Around $1,200 Despite Fund Exodus -Bloomberg
"Gold is sticking to a narrow trading range around $1,200 an ounce even after holdings in bullion-backed exchange-traded funds plunged to their lowest in a year. The metal is 'continuing its slow dance around $1,200,' Carlo Alberto De Casa, chief analyst at London-based brokerage ActivTrades, said in a daily note. A slide in bullion-backed ETFs hasn't been enough to move the metal out of the recent range....The dollar's strength since late April in particular has held back any potential advances in the gold price despite potential triggers ranging from political uncertainty in Europe and the expanding global trade tensions. Still, traders and analysts of the precious metal have held a majority bullish outlook for the last four weeks, according to Bloomberg’s weekly survey."

silver Silver's Discount to Gold Is the Biggest Since the 1990s -Bloomberg
"With gold the most expensive relative to silver in more than 20 years, investors in exchange-traded funds are betting on the cheaper metal. Bullion is about 85 times more expensive than silver per ounce, a ratio not seen since 1995. Both metals have been hammered this year, falling as the dollar rose and investors opted for the yield offered by stocks and bonds....The cheaper metal typically trades as a higher-beta asset, meaning an upturn in precious metals would tend to benefit long positions in silver more. 'Smart investors and long-term investors are seeing a lot of value in silver at these levels,' said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt by phone. He expects silver to rise 17 percent by the end of the year, twice as much as gold. 'Silver prices are low in both relative and absolute terms.'"

Democrats hold the upper hand in Arizona, Tennessee Senate races -CNN
"Democrats hold an advantage in two states that are critical to the party's chances of taking control of the US Senate, according to new CNN polls conducted by SSRS. The surveys show Democratic Rep. Kyrsten Sinema and former Gov. Phil Bredesen leading their Republican opponents for open seats Arizona and Tennessee, where sitting Republican senators are retiring....Arizona and Tennessee are two of the four states where Democrats are widely seen as having at least some chance of picking up Senate seats in November's election. The others are Texas - viewed as more of a long-shot - and Nevada - generally viewed as the Democrats' best chance for a Senate pickup. In order for the party to have any shot at taking control of the senate, it's almost certain that at least one seat from Arizona or Tennessee would need to go Democrats' way....The Republican incumbents for these seats - Sen. Jeff Flake of Arizona and Sen. Bob Corker of Tennessee - have both been publicly critical of Trump. Approval ratings of the president are closely tied to preferences in the Senate race, according to the poll."

How might a political shift toward the left in the November 6th mid-term elections affect YOUR investment portfolio? Find out in our brand new Swiss America Special Report. Get it today by calling 800-289-2646 or registering HERE.

Are you really into socialism? You're probably not. -USA Today
"The term 'socialism' has lost its sting in American politics, particularly among the young. However, few Americans who claim to be socialists are truly such, if the term is to retain its value in describing a particular form of political economy. It’s become more of a political fashion statement. A way of saying: 'Hey, look at me. I’m a rebel with a cause.'....American conservatives believe that markets are the most productive and fair way of allocating resources, and the only way compatible with individual liberty...American liberals believe that markets are necessary for economic growth, but do not trust them, particularly in terms of fairness. So, they favor significant government regulation to protect consumers, small savers and investors, and workers. They also advocate extensive welfare and safety net programs, and redistributive tax policies. True socialists believe that markets are neither productive nor fair. Instead, they are intrinsically and irredeemably exploitive. Rather than markets, government should make the decisions about the allocation of resources and actually own and operate monopoly corporations in key industries....Americans who claim to be socialists bristle when Venezuela is cited as an example of what true socialism reaps. But that's been the historic norm. When markets are dispensed with as the principal means of allocating resources, shortages and repression usually follow. That's a lesson that shouldn't be shunted aside in a desire to make a political fashion statement."

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9.17.18 - Everything You Need to Know About the Midterms

Gold last traded at $1,205 an ounce. Silver at $14.22 an ounce.

NEWS SUMMARY: Precious metal prices jumped higher Monday on a sharply weaker dollar. U.S. stocks fell amid steep losses in tech shares and increasing tensions between the U.S. and China.

Everything you need to know about the Midterms -The Guardian
"The votes on 6 November will give US voters their first chance to pass judgment on Donald Trump since he took the White House. The key question in these elections is: will Republicans will be able to keep control of both chambers of Congress? Just 35 of the 100 seats in the Senate, and all of the 435 seats in the lower House of Representatives are up for grabs. To take control of the legislative agenda and block Trump's ability to implement his programs, the Democratic party needs to control both houses. With a Senate majority, the Democrats would be able to block cabinet and supreme court appointments...The Grand Old Party (GOP) does have a big advantage over the Democrats in this showdown, because the Democratic party is defending 26 seats (including two independents, who usually vote with them) while the Republicans only have to defend nine....American voters are usually reluctant to eject a sitting representative. So for Democrats, some of their best hopes are in seats where the incumbent is not standing again. The good news for Dems is that a record 39 Republicans - many of whom were anti-Trump - have chosen to bow out instead of contest their seats in November, and some of those are in key swing states such as Florida and Pennsylvania."

midterms How The Mid-Term Elections Will Affect Your Bottom Line -Swiss America Special Report
"America at this moment seems to be flying higher and faster than any major nation in history, piloted by businessman-negotiator President Donald Trump. Unemployment is at record lows, with more jobs than job-seekers for the first time in decades. Economic growth is soaring above 4 percent. Industries that globalist politicians said would never return are returning. Most passengers are full of optimistic 'animal spirits' as we appear headed to a brighter tomorrow. But, what happens in the mid-term elections, just fifty days away, could quickly thrust the economy into reverse, potentially sending the financial markets into a tailspin. The emergence of a socialist Democratic Party could have huge consequences that will affect every American investor and saver. How will the mid-term elections affect YOUR investment portfolio? Find out in our brand new Swiss America Special Report. Get it today by calling 800-289-2646 or registering HERE.

Gold Prices Reclaim $1,200 Ahead of New U.S. Tariffs on China -Investing
"Gold prices edged higher on Monday, reclaiming the key $1,200-level amid renewed fears over an escalating trade war between the world's two largest economies. Market focus will largely be attuned to the next potential steps in the tit-for-tat trade dispute between the U.S. and China. U.S. President Donald Trump is likely to announce new tariffs on about $200 billion on Chinese imports as early as Monday, according to a senior administration official. The tariff level will probably be about 10%, the Wall Street Journal reported, far below the 25% the administration said it was considering for this possible round of tariffs. The WSJ later reported that China may decline to participate in proposed trade talks with the U.S. later this month if the Trump administration moves forward with additional tariffs on imported Chinese goods, as Beijing won't negotiate under threat. Officials are also considering potential retaliation steps, the report said."

A World With Fewer Babies Spells Economic Trouble -Bloomberg
"Forget the prophecies saying overpopulation will starve the planet. The human race is approaching the point where it's no longer reproducing enough to expand the global headcount. In the world's biggest economies - the U.S., China, Japan and Germany - it's already happening or will soon. Economists say these countries could see slower economic growth unless they increase their working-age populations....Lower fertility rates - the number of live births per woman - could also threaten safety-net programs like pensions and health care. How big is the dropoff? Fertility rates have dropped globally to about 2.4 this decade, from 5 in the 1960s, according to the World Bank. That's getting close to the rate, about 2.1, required to keep the world's population stable in the long run....The United Nations calculated the world's population as of 2017 at 7.6 billion people, a number it projects will grow to 11.2 billion at the end of this century, after which it could begin to fall. But a lot of countries are going to shrink before then. With a fertility rate of only 1.6, China's population will drop 28 percent by 2100, ceding the title of world's most-populous nation to India, the UN predicts. With a fertility rate of 1.4, Japan's population will plunge 34 percent by 2100. The U.S.'s headcount is expected to keep growing, despite a low fertility rate of 1.8, because of large numbers of immigrants....Fewer workers also mean less tax revenue for retirement and health-care programs. And that means governments might have to cut benefits, raise taxes or borrow more, pitting the old and young against each other."

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9.14.18 - US Mid-Terms Loom, Gold Price Ticks Up

Gold last traded at $1,201 an ounce. Silver at $14.14 an ounce.

NEWS SUMMARY: Precious metal prices were steady Friday despite a firmer dollar. U.S. stocks traded lower after reports that President Trump wants to move forward with tariffs on $200 billion in Chinese goods.

Trump To Proceed With $200BN More In China Tariffs Despite Talks; Stocks Tumble -Zero Hedge
"So much for the optimism that followed the WSJ report that the Trump administration is willing to offer China an olive branch in trade talks in hopes of avoiding further escalation.Bloomberg reports that President Trump has instructed aides on Thursday to proceed with tariffs on about $200 billion more in Chinese products despite Steven Mnuchin’s attempt to restart talks with Beijing to resolve the trade war. The announcement of the new round of tariffs - which had been anticipated by most as a late September event - had been delayed as the administration considers revisions based on concerns raised in public comments, Bloomberg sources said....Commenting on the latest 'news', Bloomberg's Ye Xie writes that while Trump is sending Steven Mnuchin out as a good cop to keep the dialogue with Beijing going, 'he himself is playing the bad cop by moving to imposing additional tariffs. Barring someone stealing documents from his desk, it's highly likely that he will go ahead and pull the trigger.' In kneejerk reaction to the news, US stocks, and the Chinese yuan tumbled having priced in a far more favorable outcome in recent days."

The Rate Hike That Will Trigger a Bear Market -Daily Reckoning
"The Federal Reserve will almost certainly raise its benchmark rate in under two weeks - for the eighth occasion since December 2015....But how many additional rate hikes can it endure before collapsing under the strain? Two… three… four… maybe more? ....Mr. Barry Bannister directs investment firm Stifel's institutional equity strategy division. He was one of few who accurately foretold February’s correction....When the Federal Reserve's target rate rises above the neutral rate, trouble is on tap, says Bannister...Observe the results once the fed funds rate (blue) crosses the neutral rate (red)."

chart

"The fed funds rate has been below the neutral rate for a decade running. But the Federal Reserve has been hard at hiking rates since December 2015. And the fed funds rate now eyes the neutral rate, as the chart reveals....We will likely be treated to the second rate hike in December - 80.1% are the odds given today. Thus the Fed will likely cross the neutral rate by year's end. The bear market follows if the foregoing holds."

US mid-terms loom, gold ticks up, and the global economy roars on -Proactive Investors
"Gold, that great barometer risk, hasn't exactly soared away as the Trump presidency has bedded down...The current price of US$1,205 per ounce represents something of a recovery on recent weeks....Still, there are significant challenges to the Trump regime ahead, not least the mid-term elections, which are now just two months away. Several polls are predicting a bad outcome for Mr Trump, though needless to say he himself doesn’t see it that way and, what’s more, in recent years the accuracy of polling itself has been called into question....Whether a Democratic victory is really something that would be desired by markets is another matter. ING released analysis this week citing the mid-terms as a serious consideration for turning bearish on the dollar. 'Time to ditch the dollar?' wrote ING, arguing that uncertainty around the mid-terms will be compounded by a renewed focus on ballooning US deficits, by trade and tariff considerations, and potentially by the idea that the current boom in the US economy will be as good as it gets....Mr Trump, like his Republican colleagues, professes great respect for the US constitution...Nevertheless, his previous attacks on the free press and on some of the country’s great institutions do raise questions in the minds of market participants. And the resultant is more conducive to a stronger gold price than it is to economic growth."

The End of Work: Why Your Passion Can Become Your Job -Forbes/Forbes
"EVERYONE, REGARDLESS of age, income and occupation, will find this short, pithy and wisdom-rich book by John Tamny, The End of Work: Why Your Passion Can Become Your Job, inspiring and instructive. Its thesis is simple yet profound: Greater prosperity gives more and more people the opportunity to match work with passion, the kind of work that 'has you excited on Sunday nights.' Critical to this 'luxury' is a growing economy. 'The freer people are to earn as much as they can and keep it, the more likely it is that everyone will have the opportunity to make a living from his own unique skills and intelligence.' The way the author - a longtime and valued contributor to both Forbes magazine and forbes.com - illustrates this optimistic viewpoint is exciting and original...Sports is one area that's been expanding as we've become more affluent, with vastly greater needs at all levels of play for coaches, assistants, training specialists, scouts and nerdy number crunchers to better evaluate players and prospects, as well as for agents, lawyers, marketers, publicists and broadcasters....Tamny entertainingly discusses the creation of numerous new kinds of jobs, such as coaches for teams of video game players (one competition can attract tens of thousands of fans) and dog walkers, as well as the rising remuneration (often in six figures) and sophistication of traditional, once seemingly simple tasks such as caddying (pro golf caddies are trusted and crucial advisors to players). Tamny closes his enjoyable work with this thought: 'In an economy of individuals, we're all better off when each person gets to pursue what most amplifies his unique skills and intelligence.'"

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9.13.18 - Will a Cyberattack Trigger the Next Crisis?

Gold last traded at $1,208 an ounce. Silver at $14.24 an ounce.

NEWS SUMMARY: Precious metal prices eased back on weaker-than-expected inflation data. U.S. stocks were boosted by lower rates stemming from mild inflation data as well as a rebound in Apple shares.

A cyberattack could trigger the next financial crisis, new report says -CNBC
"When it comes to a financial crisis, everyone seems to agree that the next one will not come in the same form as the one that hit 10 years ago this week, which was tied to a housing bubble and shoddy mortgage lending practices....On Wednesday, the Depository Trust & Clearing Corp., which provides clearing and settlement for the financial markets in the U.S., released a report, entitled 'The Next Crisis will be Different: Opportunities to Continue Enhancing Financial Stability 10 Years After Lehman's Insolvency.' Cyberthreats have consistently been ranked as the number one concern by respondents to Depository Trust's Systemic Risk Barometer since the survey began in 2013....The good news is no incident, not even last year's much-publicized hack of credit reporting giant Equifax, has yet had systemic effects. The bad news is we have already had incidents that have disrupted corporate activities. The oversight council report notes that an outage at Amazon's cloud computing service disrupted thousands of websites for four hours."

crisis How to Fight the Next Crisis -Bloomberg
"The time for remedies is before disaster strikes. Ten years after the fall of Lehman Brothers, trouble is brewing again, though this time the U.S. hasn't slid into a recession. In fact, growth is so strong in America that the Federal Reserve is trying to preempt inflation by raising interest rates, and that’s attracting speculative investors from the rest of the world to the U.S. - to the detriment of emerging markets. Argentina and Turkey are most under pressure, followed by Brazil, India, Indonesia, Pakistan, Russia, South Africa, and others. 'We are having a confidence crisis in emerging markets, with some level of contagion being present,' says Pablo Goldberg, a portfolio manager at BlackRock Inc. in New York....Ray Dalio is worried about the world's preparedness to fight the next global conflagration. 'There's a cycle here,' says Dalio, founder and co-chief investment officer of Bridgewater Associates LP, the world's biggest hedge fund firm. 'What they did was to write regulations that reduced the chance of a financial crisis but significantly limited the flexibility in dealing with it.'....Is what's been done enough, though? The Federal Reserve Bank of Minneapolis calculates there's still a two-thirds probability of another major financial crisis in the next century....Pay attention to the stresses in Ankara, Buenos Aires, and elsewhere. Because when the next global financial crisis breaks out, it will be hard to stop."

The monopoly-busting case against Google, Amazon, Uber, and Facebook -The Verge
"Antitrust crusaders have built up serious momentum in Washington, but so far, it’s all been theory and talk. Groups like Open Markets have made a strong case that big companies (especially big tech companies) are distorting the market to drive out competitors. We need a new standard for monopolies, they argue, one that focuses less on consumer harm and more on the skewed incentives produced by a company the size of Facebook or Google. Someday soon, those ideas will be put to the test, probably against one of a handful of companies. For anti-monopolists, it’s a chance to reshape tech into something more democratic and less destructive. It’s just a question of which company makes the best target. To that end, here’s the case against four of the movement’s biggest targets, and what they might look like if they came out on the losing end....According to Open Markets’ Matthew Stoller, the best long-term remedy for Google’s dominance has more to do with Google’s acquisitions. 'If you’re looking for a silver bullet, probably the best thing to do would be to block Google from being able to buy any companies,' says Stoller. 'Suddenly, you have to compete with Google, you can’t just be bought out by Google.'....Amazon makes life hard for its competitors - and by now, the company is competing against nearly everyone. The most notorious example is the company’s wholesale pillaging of Diapers.com in 2010, which saw Amazon drop diaper prices by as much as 30 percent and matching Diapers.com’s pricing move for move until the smaller outfit agreed to be acquired....Sitting between one-off customers and independently contracted drivers, there are lots of ways for Uber to subtly manipulate the market for its own benefit. The most notorious method was surge pricing, which added a multiplier whenever the supply of nearby drivers was running low....In some ways, Facebook is the most urgent case. It’s inescapable, opaque, and it wields immense power over the fundamental functions of our society. More than any other tech giant, Facebook’s power feels like an immediate threat and the most plausible first target for congressional action."

A Misunderstood Case of Poverty -National Review
"I often am perplexed by the ways in which we try to put poverty into a social and economic context. For example, once a year or so, the newspapers will be full of stories about a study concluding that a minimum-wage worker cannot afford the rent on a two-bedroom apartment in any American city. Dig in just a little bit and the claim is clarified: A minimum-wage worker cannot afford the rent on a two-bedroom apartment at the 40th percentile or above without spending more than 30 percent of his income on rent. It is difficult to imagine a more useless datum....Matthew Desmond is the author of Evicted, for which he won the Pulitzer Prize in 2017. He has an essay in The New York Times Magazine this week that is by turns touching and maddening....Desmond tells the story of Vanessa Solivan and her three children and their economic struggles. Solivan is a home health aide, a job for which she is paid between $10 and $14 an hour, depending on the reimbursement rate of the patient in question. She works part time, between 20 and 30 hours a week. Desmond writes that the federal government estimates that Solivan would need to earn $29,420 to meet her family’s basic needs. This is written under the headline: 'Americans Want to Believe Jobs Are the Solution to Poverty. They’re Not.'.... As Desmond notes, our welfare programs favor the employed, and as such Solivan would receive about $5,200 in Earned Income Tax Credit benefits, raising her total income, absent any other benefits, to $29,200, just a few dollars shy of that $29,420 estimate of her family’s basic needs. Which is to say, a job looks like a pretty good solution, if not quite a complete solution, to poverty in her case, provided it is a full-time job....Two $12-an-hour workers (married, say) working full-time jobs would bring in about $48,000 a year - or about 40 percent more than the median household income in Trenton, N.J., where Solivan lives. So maybe the headline should instead be amended to read: 'Having Two Full-Time Earners in a Household Is Actually a Pretty Good Solution to Poverty,' or, if we want to get radical, 'Marriage and Full-Time Employment Together Are a Pretty Good Solution to Poverty.'....Did anybody listen when conservatives were pointing out that the structure of the Affordable Care Act would give employers incentives to prefer part-time workers to full-time workers? Or when your correspondent argued that federal and local policies intended to keep the price of houses high and rising inevitably are going to be hard on the poor?"

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9.12.18 - Warren Buffett: Why Market Bubbles Happen

Gold last traded at $1,210 an ounce. Silver at $14.29 an ounce.

NEWS SUMMARY: Precious metal prices rose sharply Wednesday on bargain-hunting and a weaker dollar. U.S. stocks traded lower despite upbeat U.S.-China trade proposal news.

Here’s why one analyst just made a ‘rare’ call to buy some gold -Marketwatch
"Gold prices have dropped this year, but it could be a hedge against a market correction, analyst writes....'Investors do not seem prepared for anything but a continuation of the current upward trend, something that is hard to fathom if U.S. tariffs on $200 billion in Chinese goods go into effect,' wrote Lisa Shalett, head of investment and portfolio strategies at Morgan Stanley Wealth Management. In such an environment, Shalett suggested that gold could have an important place in one’s portfolio....'We believe it can be used tactically as a potential hedge for a stock market correction and/or a reversal in the dollar and real interest rates.' She's recommending investors take profits on their U.S. equities exposure, while 'tactically deploying' 3% to 5% of the portfolio to gold...'In the current environment, we see gold as oversold and the likely beneficiary if recession fears rise and real rates begin to fall, if the U.S. dollar weakens, if market volatility picks up, if there is broadening contagion in emerging markets or if there is an inflation shock.'"

cashless America moves closer to being a cashless society -Marketwatch
"Cashless commerce is popping up around the country, particularly in restaurants catering to a younger crowd, which is likely to leave home without any greenbacks, or even a wallet, and instead choose to live life with a smartphone and a few credit or debit cards attached. Businesses who've gone cashless rave about the results....Cash sure seems to be on the ropes. The dollar value of cash transactions sank 7% from 2010 to 2015, according to The Nilson Report, while credit and debit card payments rose nearly 50%. Meanwhile, ATMs, which had their 50th birthday last year, are disappearing around the block and around the world, signaling the decline of the 'cash run.' So you’re saying cash is over? Not exactly. The Federal Reserve said in 2016 that 35% of U.S. transactions were still made in cash....Forces will undoubtedly continue nudging us toward a cashless life, which comes with plenty of benefits. Just remember that cashless spending is frictionless - it's just a swipe of a card or a wave of your phone. So, if you're already prone to overspending, get creative about curbing those tendencies and making sure your savings goals are on track."

Convenience is the primary driving force toward cashlessness, but along with this benefit comes a major loss of privacy. There are many other rights that are voluntarily given up in a cashless society, which are covered in detail in our free special report THE SECRET WAR, PART II: Weapons of Cash Destruction.

Crypto's 80% Plunge Is Now Worse Than the Dot-Com Crash -Bloomberg Quint
"As virtual currencies plumbed new depths on Wednesday, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent. The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000. Like their predecessors during the Internet-stock boom almost two decades ago, cryptocurrency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check, particularly those in many secondary tokens, so-called alt-coins. 'It just shows what a massive, speculative bubble the whole crypto thing was - as many of us at the time warned,' said Neil Wilson, chief market analyst in London for Markets.com, a foreign-exchange trading platform....The virtual-currency mania of 2017- fueled by hopes that Bitcoin would become 'digital gold' and that blockchain-powered tokens would reshape industries from finance to food - has quickly given way to concerns about excessive hype, security flaws, market manipulation, tighter regulation and slower-than-anticipated adoption by Wall Street."

In our 2018 newsletter, The Future of Money, we discussed in detail the rise and anticipated fall of cyrptocurrencies and warned our clients to avoid bitcoin due to the high volatility. The blockchain technology behind bitcoin and other cryptos may have a future as an alternative international payment system, but they can never replace physical gold as a universal form of global money.

Warren Buffett on why bubbles happen: People see neighbors 'dumber than they are' getting rich -CNBC
"Warren Buffett warns that another financial crisis is inevitable....This week marks the 10th anniversary of Lehman Brothers' bankruptcy, which many investors regard as the seminal event of the financial crisis. Buffett was asked by CNBC's Andrew Ross Sorkin if he is worried another crisis will happen again. 'Well there will be one sometime,' Buffett said. The Oracle of Omaha explained another bubble is unavoidable due to human nature, jealously and greed. 'People start being interested in something because it's going up, not because they understand it or anything else. But the guy next door, who they know is dumber than they are, is getting rich and they aren't,' he said. 'And their spouse is saying can't you figure it out, too? It is so contagious. So that's a permanent part of the system.'"

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9.11.18 - Gold Prices May Outperform Expectations

Gold last traded at $1,202 an ounce. Silver at $14.15 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Tuesday on bargain-hunting despite a firmer dollar. U.S. stocks rose as a rebound in tech shares offset lingering concerns over trade.

Gold Prices Could Outperform as China Buys 20% of Global Gold Mine Output -Lombari Letter
"If you are worried about daily fluctuations in gold prices and are forgetting the big picture, you could be making a mistake. This is a bold statement, but don’t be shocked to see gold prices outperforming a lot of assets in the next few years. You see, gold isn't getting much attention these days, and rightfully so; the yellow precious metal hasn't done well at all. Investors tend to ignore things that are underperforming. But sooner rather than later, this could turn. Know that we have big buyers remaining in the gold market. Their actions tell us that they want a lot more of it. For example, look at the Russian central bank...In July, the Russian central bank bought 26.1 tons of the yellow metal....China is worth watching closely as well. It’s not only the consumers in the country who like gold; the People's Bank of China likes gold, too....I can't stress this enough: the big buyers in the gold market could send gold prices much higher."

CRS Tech Stocks Are Feeling Trade Pressure -Fox Business
Swiss America Chairman Craig R. Smith discusses the tech stock rebound today and how long it might last. Smith believes the future of tech hangs on the outcome of trade talks with China and whether or not China will concede to Trump's demands to stop stealing U.S. intellectual property. Watch now...

Eternal Sunshine of the Spotless Mind -Hussman/Hussman Funds
"'Like bubbles on the sea of matter borne, they rise, they break, and to that sea return.' -Alexander Pope. Last week, the stock market recorded the most offensive valuation extreme in history, on the basis of measures best correlated with actual subsequent returns across a century of market cycles....I am aware of no plausible conditions under which current extremes are likely to work out well for investors. There are a few possibilities that could involve a smaller loss than the two-thirds of market capitalization that I expect to vanish, as the run-of-the-mill, baseline expectation for the S&P 500 over the completion of this cycle. Still, be careful about what you do with information about valuations. If overvaluation was sufficient to halt a market advance, we would never have observed valuations like 1929, 2000, and today, because those advances would have ended at lesser extremes....The central fact of full-cycle investing is that when investors have the speculative bit in their teeth, valuations can mean very little for extended segments of the market cycle....I expect the S&P 500 to underperform even the depressed yield on Treasury bonds over the coming 12-year period....Given current valuation extremes in stocks, unfavorable market internals, and a relatively flat yield curve in bonds, I believe that lowly, humble cash has substantial option value, because it offers the opportunity to respond to potentially deep market losses."

U.S. marks 9/11 with somber tributes and new monument to victims -LA Times
"Americans were commemorating 9/11 with somber tributes, volunteer projects and a new monument to victims Tuesday, after a year when two attacks demonstrated the enduring threat of terrorism in the nation's biggest city. Margie Miller was among the 9/11 victims' relatives, survivors, rescuers and others who gathered on a misty Tuesday morning at the memorial plaza where the World Trade Center's twin towers once stood. She came to the Manhattan site from her home in suburban Baldwin, N.Y., as she does 10 or so times a year, to remember her husband, Joel Miller. Only a few fragments of his remains were recovered. 'To me, he is here. This is my holy place,' his widow said before the ceremony began with a moment of silence and tolling bells at 8:46 a.m., the time when the trade center was hit by the first of two terrorist-piloted planes. President Trump and Vice President Mike Pence headed to the two other places where hijacked planes crashed on Sept. 11, 2001, in the deadliest terror attack on American soil. The president and First Lady Melania Trump planned to join an observance at the 9/11 memorial in a field near Shanksville, Pa., where a new 'Tower of Voice' was dedicated Saturday....The recent attacks in New York, as well as terror attacks elsewhere, were on Miller's mind as she arrived Tuesday...'You have to move on,' she said as she headed into the anniversary ceremony with her extended family. 'Otherwise, you'd live in fear.'"

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9.10.18 - Stocks Face Three Potential Outcomes

Gold last traded at $1,199 an ounce. Silver at $14.18 an ounce.

NEWS SUMMARY: Precious metal prices steadied near recent highs Monday on a weaker dollar. U.S. stocks traded modestly higher as tech giants attempted to recover from 3% sell-off last week.

Is gold set for a much brighter future? -The National
"The gold price is set in the Comex futures exchange by the trading of futures contracts and not the amount of gold traded in Dubai, India or anywhere else....Typically it is a rather bewildering place for amateur speculators who generally get their positions wrong, while professional commercial investors control the market. But over the summer a clear pattern has emerged, and one that has almost always come before a very much higher price for gold and silver. Basically, professional investors have all switched to the long side of the market, including the most powerful JP Morgan. Meanwhile, smaller speculators have been lured into record short positions, thinking that gold has had it and Wall Street is the only game in town. All the commercial longs have to do now is tip the market into a mild upturn and all these short positions will have to cover....This should lead to a sudden flood of buyers that will drive precious metal prices sharply higher, triggering phase one of a new bull phase. The long commercial Comex players will win yet again, along with anybody who’s been bright enough to see what is coming....The collapse of cryptocurrencies last week could be the driver that opens the way for substantial gold price rises as cryptos have distracted speculators from precious metals. So too the recent emerging markets crash, and a growing correction in major stock markets."

Stocks Face Three Potential Outcomes: Pretty Bad, Bad and Horrific -Zero Hedge
"The momentum-driven rally that pushed stocks to new all-time highs completely floundered a few weeks ago. What should have been a monster breakout on massive buying power ended up being a feeble push to new highs before stocks promptly rolled over. More and more, that is looking like a false breakout. This opens the door to a SHARP correction downwards...If the US goes the same route as China, the Emerging Markets, industrial metals, and other growth-related asset classes, the S&P 500 could easily collapse to sub-2,600. That's the pretty bad outcome. The REALLY bad one is that the Everything Bubble bursts and we swiftly move into a crisis that makes 2008 seem like a picnic."

chart

Bloomberg reports, "Goldman Sachs’ Bull/Bear Index, which is based on measures of equity valuation, growth momentum, unemployment, inflation and the yield curve, is now at levels last seen in 1969." With stock valuations at 50-year highs what more will it take before investors will move a portion of their profits into safe, undervalued assets like gold?

The feds haven't done what's needed to to prevent the next bank mega-bailouts -Gasparino/New York Post
"Ten years ago, the nation's banking system collapsed, prompting a massive federal bailout that likely prevented a second Great Depression - but couldn't contain the enormous instability that still plagues the American economy and which contains the seeds of a potential sequel....Unfortunately, policymakers still haven't learned from past mistakes. In 1999, President Bill Clinton and Republicans in Congress passed a law that allowed big banks that hold deposits to fully merge with risk-taking Wall Street firms. The law put a stake through one of the most logical regulations ever passed - a Depression-era law called Glass-Steagall, which essentially said Wall Street firms can roll the dice all they want but the government isn't going to allow these activities to infect commercial banks, which hold deposits that are insured by taxpayers. Amid the irrational exuberance of the boom years of the 1990s, the Berlin Wall that was Glass-Steagall came down. The ensuing finance behemoths set the stage for the crash and the massive bailouts of 2008, and more regulation....The banking system has its risks more concentrated than ever because a greater percentage of assets are held by fewer players than in 2008. Contagion will spread faster....Private-equity firms are growing as well, but government scrutiny of them isn't. If history is any guide, when the PE shops and Blackrock get into serious trouble, they'll be deemed Too Big To Fail. Lather, rinse, repeat."

India getting rid of US Treasury securities and buying gold -RT
"The world's second biggest gold consumer continues to replenish its bullion reserves, a Reserve Bank of India (RBI) report shows. At the same time, New Delhi is slowly but surely reducing its share of US debt bonds. The annual report from the Indian financial regulator reveals that the country followed other BRICS partners in adding physical gold to its foreign exchange reserves. The RBI reportedly bought 8.46 metric tons of gold during the last fiscal year ending in March. 'Diversification of India's Foreign Currency Assets continued during the year with attention being ascribed to risk management, including cybersecurity risk. The gold portfolio has also been activated,' the report added. Meanwhile, the country's share of US sovereign debt saw a gradual decline from $157 billion in March to $148.9 billion by May, according to the latest US Treasury report. Eliminating US sovereign bonds has recently become a trend among major holders."

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9.7.18 - Fed More Unprepared Than 10 Years Ago

Gold last traded at $1,200 an ounce. Silver at $14.17 an ounce.

NEWS SUMMARY: Precious metal prices eased back Friday as upbeat jobs data boosted the dollar. U.S. stocks fell after Trump announced an additional $267B in tariffs on China are ready to go.

Hiring, Wages Gain Strength as Jobless Rate Holds Steady -Wall Street Journal
"The pace of hiring picked up in August, American workers' paychecks grew strongly and the unemployment rate held steady, showing ongoing strength in the labor market. The unemployment rate was 3.9% last month, the Labor Department said Friday. Nonfarm payrolls rose a seasonally adjusted 201,000 in August, a pickup from the prior month....Wages picked up in August, a sign the very strong labor market is pressuring employers to offer higher pay packages as the overall cost of living ticks up. Average hourly earnings for all private-sector workers increased 10 cents last month to $27.16, a 2.9% increase from August a year ago. That was the strongest year-over-year rise in earnings since the current expansion began in mid-2009....Revised figures show employers added 147,000 jobs in July and 208,000 in June, a net downward revision....The share of Americans participating in the labor force fell by 0.2 percentage point to 62.7% in August, the smallest share of adults participating since the late 1970s....Friday's report keeps the Fed on track to raise its short-term benchmark rate, currently in a range between 1.75% and 2%, in September and again in December."

The Fed Fed Said to Be More Unprepared For Crisis Than 10 Years Ago -Zero Hedge
"A group of current and former policymakers and academics in the financial industry that comprise the 'Group of 30' - a financial industry working group that includes names like Mario Draghi and Mark Carney and which is the 'who's who' of economists and experts that led the world into the last financial crisis - has come to the same conclusion that the many in the 'fringes of economic thought' have been warning about for the last decade: the Fed is going to be in worse off shape to fight the next major crisis than they were in 2008. 'Some of the tools to fight the hopefully rare but extreme crises in the future have been weakened,' Tim Geithner, a distinguished Group of 30 member, told Bloomberg. While many of our readers have likely arrived at that same conclusion on their own, the reasoning by the Group of 30 seems to differ somewhat from conventional skepticism....'If you apply constraints on risk taking to only part of the financial system - say just the banks - and allow other types of financial institutions to operate outside those constraints then you will leave the overall financial system less resilient," Geithner continued....Yet for some reason these 'smartest people in the room' continue to believe that if we can't govern all of the institutions that deal in finance, somehow the better option is only to govern some of them, instead of letting them all do business under a free market scenario (that outcome would require the end of central banking and modern economics which may explain their skepticism)."

Surge In Silver Demand Leaves U.S. Mint With No Eagle Silver Bullion Coins -Kitco
"The U.S. Mint has temporarily sold out of its 2018 American Eagle Silver Bullion Coins and is currently in the process of producing more. 'This is to inform you that due to recent increased demand, the United States Mint has temporarily sold out of its inventories of 2018 American Eagle Silver Bullion Coins,' U.S. Mint said in a press release published on Thursday. The announcement comes amidst the strongest silver sales from the U.S. Mint since the start of last year. In August, the U.S. Mint sold 1.53 million one-ounce American Eagle Silver coins, up 72% from the previous month....While silver coins have done much better than gold coins, physical silver continues to lag in price performance. The gold-silver ratio has expanded to 84.75, while silver has fallen to two-year lows."

How to Punish the White House "Traitor" -Bonner/Bonner And Partners
"An anonymous editorial in The New York Times claims there is 'resistance' in the White House to an 'amoral' president. That is, there are, apparently, people who are trying to block the president from doing what he wants to do so they can do what they want to do....Here at the Diary, we hope The New York Times reveals its source. If not, we have a suggestion: decimation. It worked for the Roman army....The idea for the Romans was simple: When punishing entire cohorts (military units), they'd line up all the soldiers… and every tenth man would get the sword....While the political circus draws crowds in Washington, the important news is left unwatched and unnoticed...As we wrote yesterday, America's long road to bankruptcy will start with a whimper… but end with a bang. Yes, the whimper will come in response to a debt crisis....People should have learned their lessons in the crisis of 2008–2009. But the Fed burned down the school, setting interest rates so low that saving money made no sense. So instead of saving, people borrowed more… and now, they are more vulnerable than ever....Can the feds pull off another 'save' as they did after 1987, 2000, and 2008? With no interest rates to cut (the federal funds rate, in real terms, is still negative)… and no surplus to draw on (we are in the tenth fat year… and still adding debt at the rate of more than $1 trillion a year)… what can the feds do? Bang!"

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9.6.18 - Gold And Silver Are Acting Like It's 2008

Gold last traded at $1,204 an ounce. Silver at $14.18 an ounce.

NEWS SUMMARY: Precious metal prices inched higher Thursday on a weaker dollar. U.S. stocks fell as tech shares added to steep losses seen in the previous session while global trade fears lingered.

Gold And Silver Are Acting Like It's 2008. They May Be Right. -Zero Hedge
"2008 has special significance for gold bugs, both because of the money they lost in August of that year and the money they made in the half-decade that followed. Today's world is beginning to feel eerily similar....In 2008 the periphery 'subprime' crisis spread to the core, threatening to kill the brand-name banks that had grown to dominate the US and Europe. The markets panicked, with even gold and silver plunging along with everything else. Gold lost about 20% of its market value in a single month....The world's governments reacted to the crisis by cutting interest rates to record lows and flooding the financial system with credit. And precious metals and related mining stocks took off on an epic bull market....Now fast forward to Autumn 2018. The global economy is booming because of artificially low interest rates and massive lending to all kinds of subprime borrowers. One group of them - the emerging market countries - made the mistake of borrowing trillions of US dollars in the hope that the greenback would keep falling versus their national currencies, thus giving them a profitable carry trade. Instead the dollar is rising, threatening to bankrupt a growing list of these countries - which, crucially, owe their now unmanageable debts to US and European banks. The peripheral crisis, once again, is moving to the core....So watch the Fed. If the EM crisis leads to talk of suspending the rate increase program and possibly restarting QE, then we're off to the races. Just like 2008."

Disaster Is Inevitable When America's Stock Market Bubble Bursts -Forbes
"To many observers, this market now seems downright bulletproof as it keeps going higher and higher as it has for nearly a decade in direct defiance of the naysayers' warnings. Unfortunately, this unusual market strength is not evidence of a strong, organic economy, but of an extremely unhealthy, artificial bubble economy that will end in a crisis that will be even worse than we experienced in 2008. In this report, I will show a wide variety of charts that prove how unsustainable the current bull market is....The reason for America's stock market and economic bubbles is quite simple: ultra-cheap credit/ultra-low interest rates....The mid-2000s housing bubble and the current 'Everything Bubble' both formed during periods of negative real interest rates."

everything bubble

"....U.S. corporations have been using much of their borrowed capital to buy back their own stock, increase dividends, and fund mergers and acquisitions - activities that are known for boosting stock prices and executive bonuses....The current U.S. stock market bubble will pop due to the ending of the conditions that created it in the first place: cheap credit/loose monetary conditions...What the Fed giveth, the Fed taketh away. The Fed claims to be able to engineer a 'soft landing,' but that virtually never happens in reality....I am not necessarily calling the market's top right here and right now. I am fully aware that this stock market bubble can continue inflating to even more extreme heights before it pops."

Why the GOP will likely maintain control of Congress -Crudele/New York Post
"There are only three more employment reports before the November congressional elections. One of them - the report for August - arrives on Friday. And expectations among the experts are that there will be good news in the August report - 195,000 new jobs and an unemployment rate that dips slightly to 3.8 percent from 3.9 percent. August's job growth is expected to beat July's. My contention all along has been that economics - pocketbook issues like jobs and wages - will be the main things on Americans' minds when they vote on Nov. 6. That's why I've been saying that I don't think there will be a significant change in the composition of Congress, with Republicans continuing to control both the House and Senate....Most of the political polls disagree with me, so we will know in two months whether the polls - which missed horrifically in the last presidential election - will be wrong again....Was it only the weak economy in 2016 that caused Trump to beat Hillary Clinton? No...Clinton has a flawed character, and many of her problems had to do with financial shenanigans. Trump's character was - and is - also flawed for reasons too numerous for me to get into. So the real issue in November will be whether voters look past Trump's shortcomings because they have more money in their pockets. I think they will."

Americans won't vote for socialism once they know what it is -The Hill
"A series of polls have shown that pluralities of Democrats and millennials prefer socialism to capitalism. These surveys also make clear that respondents do not know what socialism is....Socialism's new face, Alexandria Ocasio Cortez, upset a major establishment figure in the New York primaries. Like the poll respondents, she was also hard pressed to explain what socialism is. In another development, the primary upset victory of Andrew Gillam gave Florida democrats their first socialist candidate for governor. Speculation about a socialist renaissance is premature. Americans won't vote for socialists if they come to understand what socialism is. To win, socialist candidates must conceal their beliefs; to do otherwise would condemn them to the ash heap of history....Throughout his 2016 presidential campaign, Bernie Sanders assured primary voters that his socialism is nothing more than free medicine and education and a fair distribution of income. He soothingly assured voters that democracy, with a small 'd,' and socialism are perfectly compatible. When challenged to give real-world success stories of socialism, Sanders regularly cites not the Soviet Union, Cuba or Venezuela, but affluent Scandinavian countries. Indeed, Denmark, Norway and Sweden have generous welfare states, as does most of Europe, but some 90 percent of the Swedish economy is privately owned. Sweden and Denmark outrank the U.S. in economic freedom, and all three Scandinavian countries outperform the U.S. in business freedom....When challenged to differentiate himself from traditional socialism, Sanders claims that he is a Democratic socialist, not just a socialist. Sanders does not want to acknowledge that Democratic socialism is an oxymoron. Once people have seen what socialism is, they will not vote for it, but by that time, they may have no choice. Just take a look at Venezuela."

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9.5.18 - Antitrust Regulation to Break up Big Tech?

Gold last traded at $1,201 an ounce. Silver at $14.22 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks traded mostly lower on trade concerns; while the tech-heavy Nasdaq dropped 0.9 percent as Facebook, Amazon, Netflix and Alphabet all dropped.

Gold edges higher as dollar rally takes a breather -Reuters
"Gold prices rose on Wednesday from an 11-day low in the previous session as a U.S. dollar rally faltered. Gold has fallen 1.5 percent from an Aug. 28 high as currency weakness in emerging markets and concerns over global trade disputes strengthened the dollar, making bullion more expensive for buyers with other currencies. But the greenback slipped on Wednesday after a report that Britain and Germany were prepared to drop a key sticking point in Brexit negotiations boosted the pound and the euro....Trade concerns continue to support the greenback, however, with a deadline looming in the U.S.-China trade dispute and a refusal by Canada to back down on key demands in its trade talks with Washington. Technical and momentum indicators were positive for gold, but the technical picture would remain mixed unless it could close above $1,200.70, analysts at ScotiaMocatta said."

chart JP Morgan's top quant warns next crisis to have flash crashes and social unrest not seen in 50 years -CNBC
"Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That's how J.P. Morgan Chase's head quant, Marko Kolanovic, envisions the next financial crisis...His note is part of a 168-page mega-report, written for the 10th anniversary of the 2008 financial crisis, with perspectives from 48 of the bank's analysts and economists....'If you have these liquidity-driven sharp sell-offs that come at the end of the cycle, or maybe even causes the end of the cycle, then I think you can have a much more significant asset price correction and even more significant increase in market volatility,' Kolanovic said....Kolanovic says that this potential meltdown in stock prices could cause the next financial crisis. His name for it: the Great Liquidity Crisis. If markets fall by 40 percent or more, the Federal Reserve would need to leap into action to prevent a spiral that led into depression, Kolanovic said. 'Suddenly, every pension fund in the U.S. is severely underfunded, retail investors panic and sell, while individuals stop spending.'"

Senators blast Google executives for not showing up to hearings on election meddling -CNBC
"The Senate Select Committee on Intelligence intentionally set up an unoccupied seat to shame Alphabet at Wednesday's hearing on foreign meddling in the 2016 U.S. presidential election. The Committee wanted either Alphabet CEO Larry Page or Google chief executive Sundar Pichai to testify alongside Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg, but the company offered its top lawyer and SVP of global affairs, Kent Walker, instead. That decision rankled Committee leaders Sen Mark Warner, D-VA, and Sen. Mark Burr, R-NA, who rejected the substitution, hence the pointedly vacant chair. 'I'm disappointed Google decided against sending the right senior level executive,' Sen. Richard Burr, the chair of the committee, said in his opening remarks....Politically, it's been a rough summer for Google. In July, the European Union slapped Google with a $5 billion fine for antritrust abuse of its mobile operating system, Android. At the beginning of August, Google drew both internal and external criticism after its plans for a censored search app in China leaked to the press. Then, at the end of the month, President Donald Trump accused Google of liberal bias, including the false assertion that it had promoted all of Obama's State of the Union speeches, but not his. By not showing up for the Senate hearing, Google may have avoided answering some uncomfortable questions unrelated to election meddling."

How Trump Breaks up Big Tech -Denning/Bonner And Partners
"'What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.' -Herbert Simon On Wednesday, September 5, representatives from Twitter, Google, and Facebook will face members of Congress in Washington, D.C. in a new round of hearings about the conduct of Big Tech. These hearings could lead to three different results: antitrust regulations to break up Silicon Valley giants… even more power for those same companies to censor speech on their respective platforms… or absolutely nothing, as Congress once again proves how incompetent and technologically illiterate it is. If you’ve been following our research in The Bill Bonner Letter, then you already know our take: Big Tech is a threat to freedom of speech. For investors - even for those who don't own Big Tech stocks - it's also a threat to what is now the longest bull market on record. When tech falls, for whatever reason, we believe it's going to take the market with it....The best way you can preserve your free thought is to free yourself completely from the embedded bias inherent in Big Tech and the mainstream media. That means quitting these platforms altogether. That's the free-market solution. No regulation needed. If you don't like or approve of a product, don't use it! Mind you, antitrust regulation may still happen. If these companies are too big or too arrogant to regulate themselves, or if that regulation turns into systemic silencing of alternative political and financial voices, then regulation might be the only way to stop them."

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9.4.18 - Global Finance is 'As Vulnerable' as in 2008

Gold last traded at $1,199 an ounce. Silver at $14.18 an ounce.

NEWS SUMMARY: Precious metal prices eased back Tuesday amid trade worry- induced dollar strength. U.S. stocks fell on growing trade tensions with Canada and China.

Stocks fall to start September on increasing trade tensions with Canada, China -CNBC
"Stocks fell on Tuesday as trade tensions between the U.S. and key partners increased, offsetting strong economic data, to start off the one of the toughest parts of the year for equity investors....Last week, the U.S. and Canada failed to secure an agreement to replace the current NAFTA pact by last Friday's deadline. While a deal has been arranged with Mexico, President Donald Trump tweeted over the weekend that there was 'no political necessity to keep Canada in the new NAFTA deal.' Trump added that Congress shouldn't intervene in the talks, and claimed that if it did, he would 'simply terminate NAFTA entirely.'....Meanwhile, a Bloomberg report last week suggested that the U.S. administration was on standby to inflict additional levies on $200 billion worth of Chinese goods as soon as this week. In an interview with the same media outlet, Trump warned that he would consider removing the U.S. from the World Trade Organization (WTO) if it doesn't 'shape up.' 'When you have that kind of rhetoric at the same time you have a murky month for the market, this is what happens,' said Peter Cardillo, chief market economist at Spartan Capital Securities."

National debt Global finance 'as vulnerable' as in 2008: ex-ECB chief -AFP/Yahoo
"'There is now agreement that the excessive debt level in advanced economies was a key factor in the triggering of the global financial crisis in 2007 and 2008,' Jean-Claude Trichet, who ran the European Central Bank between 2003 and 2011, told AFP in an interview. 'The growth in debt, especially private debt, in advanced countries has slowed, but this slowdown has been offset by an acceleration of emerging country debt,' said Trichet, a Frenchman who ran his country's central bank, the Banque de France, before taking the helm at the ECB. 'This makes the entire global financial system at least as vulnerable as it was in 2008, if not more so.'....'I witnessed the real start of the financial crisis that was about to sweep the world in the morning of August 9, 2007, when we were confronted with a complete interruption of the eurozone money market,' he remembered....On August 9, French banking giant BNP Paribas froze three of its US funds specialising in securitised mortgages whose value plunged by 400 million euros within a few days. Panic gripped financial institutions, causing the money market, where banks lend each other short-term liquidity, to suddenly dry up....By the time Lehman started to crumble, Trichet said he and his central banker colleagues, including Fed chief Ben Bernanke, 'were very much aware that we were looking at a completely systemic major global crisis'."

Imagine you had an early warning signal of a debt-induced, global financial meltdown just days, weeks or perhaps months before the 2008 crisis. Would you have taken action? Would you have protected your assets by diversification out of stocks and bonds? Wise financial leaders today are issuing just such a warning, essentially saying we are sitting on a worldwide economic reset which could wipe out trillions of dollars of assets; like it did a decade ago. Learn more about how to prepare in our free report THE CRASHLESS SOCIETY.

Global debt soars, along with fears of crisis ahead -San Fransisco Gate
"Ten years after the worst financial panic since the 1930s, growing debt burdens in key developing economies are fueling fears of a new crisis that could spread far beyond the disruption sweeping Turkey. The loss of investor confidence in the Turkish lira, which has surrendered more than 40 percent of its value this year, is only a preview of debt problems that could engulf countries such as Brazil, South Africa, Russia and Indonesia, some economists say. 'Turkey is not the last one,' said Sebnem Kalemli-Ozcan, an economics professor at the University of Maryland. 'Turkey is the beginning.' Total debt is a whopping $169 trillion, up from $97 trillion on the eve of the Great Recession, according to the McKinsey Global Institute....'We were supposed to correct a debt bubble,' said David Rosenberg, chief economist at Gluskin Sheff, a wealth-management firm. 'What we did instead was create more debt.'....Turkey's problems are likely to get worse before they get better. Inflation is headed to a peak of 22 percent by year's end, and the economy will shrink next year for the first time in a decade, according to S&P global ratings."

The Collapse Of Venezuela's Imaginary Oil Currency -Oil Price
"Earlier this year, Venezuelan President Nicolas Maduro rolled out his latest scheme to rescue his economy, offer an alternative to the increasingly worthless bolivar, and skirt U.S. sanctions on financial transactions. But Maduro’s cryptocurrency, supposedly backed by Venezuela’s oil reserves, is a very hollow promise. To be sure, few analysts expected much from the 'petro,' Maduro’s hastily launched cryptocurrency. One petro was supposed to be backed by one barrel of oil, and the vast reserves of oil located in a specific part of Venezuela were promised as a backstop for the new cryptocurrency. It was always an odd scheme. After all, what makes the petro any different from the bolivar, Venezuela's official currency? Isn’t the value of and faith in the bolivar also effectively backed by the country’s oil wealth? Well, he bolivar is worthless, and Maduro wanted to start anew. Maduro thought the petro would help the government avoid the reach of U.S. sanctions, at least in theory. But the new cryptocurrency has unsurprisingly failed to catch on....As Reuters details in a special report, the region is not only lacking in oil production, but there is no visible effort at developing oil in this area at all...Worse, the town suffers from blackouts, hunger, poverty and decrepit infrastructure, an increasingly common plight for the country on the whole....Meanwhile, Venezuela's oil production continues to erode at a rapid rate....Thus, the meltdown continues."

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