1.13.20 - Extreme Greed Fuels Market Bubble
Gold last traded at $1,550 an ounce. Silver at $18.01 an ounce.
NEWS SUMMARY: Precious metal prices eased Monday on profit-taking and a firmer dollar. U.S. stocks rose as geopolitical tensions dissipated while investors felt optimistic about U.S.-China trade relations.
Gold may gain up to 10% this year as geopolitical risks, lower US interest rates push price to $1,700 -Analysts/South China Morning News
"The tentative easing of tensions in the Middle East in the second half of last week caused the price of gold to pull back from a seven-year high. But analysts see further gains in store for the yellow metal this year, with $1,700 per ounce achievable on the back of sustained geopolitical risks and lower US interest rates....Fueling gold's spike early last week was a rush to the traditional safe haven asset after Iran fired at least a dozen missiles at military bases in Iraq that hosted American personnel, in retaliation for the US’ assassination of its top general, Qassem Soleimani, on January 3....ING expects the US Federal Reserve to cut the short-term federal funds rate in April, which will send the real yield of US treasuries lower. This will provide further support for gold, because as short term real interest rates decline, the opportunity cost of holding gold also drops. Jasper Lo, an independent market commentator, said he would not be surprised to see gold hitting $1,700 per ounce in 2020, echoing a call made earlier last year by billionaire investor Paul Tudor Jones, founder of macro-trading hedge fund firm Tudor Investment. Uncertainty stemming from the geopolitical tension in the Middle East is further compounded by the US-China trade war...'It appears that Chinese officials are reluctant to start the second round any time soon, this means that the outlook for US-China trade negotiations beyond January would still remain bumpy,' said Lo."
Negative Interest Rates: The Logical Absurdity -Kalinowski/Enterprising Investor
"It is not uncommon for the word 'absurd' or its derivatives to accompany discussions of negative nominal interest rates. A healthy proportion of financial opinion makers describe the phenomenon as a fundamental violation of the first principles of finance....Here is the problem: There is not enough collateral. So financial institutions will pay 'anything' for it, including 'guaranteed' losses on sovereign debt, assuming the government obligation is held to maturity, which it is not. These negative-yielding bonds are not investments but balance-sheet management tools....The example of It's a Wonderful Life should lend itself to your analyst's mind. George and Mary Bailey sacrificed their honeymoon savings on an unsecured basis to keep Bailey Bros. Building & Loan Association solvent until the bank run panic ended. But outside of their town of Bedford Falls and after 2008, banks need to put up collateral to access honeymoon savings - or any other kind of short-term funding. They do so to meet obligations and regulatory requirements without being forced to sell their long-term investments. Thus, the hamartia (fatal flaw) is exposed. A global monetary order, organized over the course of five decades around access to unsecured, interbank short-term funding, is now obliged to secure its funding. At the same time, the expectations of politicians, monetary technocrats, and the public are unchanged. The whole creaking locomotive is all supposed to puff along as it always has....It is no wonder then that those who have access to the most liquid, fluid, and important collateral are hoarding it like the past holiday season's most popular children's toy. Except that in this sempiternal season, 'It is always winter, never Christmas,' to quote C. S. Lewis. It is a self-reinforcing cycle: no trust, not enough new collateral, hoarding of existing collateral, impeding economic potential, further reducing trust, further dimming economic potential, etc. Negative interest rates are a 'logical' consequence of the larger, absurd picture: an unacknowledged, silent depression...By rearranging the letters of 'depression,' a solution to the problem is revealed: 'I pressed on.'"
Popping The Bubble -Zero Hedge
"Now that we have an open admission from the Fed that their balance sheet expansion is exacerbating asset prices and creating excess and imbalances, the term bubble can no longer be dismissed as some fringe rantings by cranks like me, but rather a recognition for what any bubble is: An overpricing of asset prices far above where they should be based on earnings, fundamentals or the growth basis of the economy. The question on everybody's mind of course: When does the rally end, when will the bubble get popped? You know it's bad when even bulls call for corrections but can't get any. In December what seemed an aggressive call for 3,333 $SPX by March 3rd by BAML already looks overly conservative as $SPX got within a stone's throw of 3,300 on January 10....None of this is new. We've seen bubbles before that brought about major pain when the excess and imbalances were wrought out following a period of extreme greed and complacency. And it's fair to say that this the environment we're in now as CNN's fear and greed model appears to now have settled into what seems an unprecedented permanent full greed mode."
The End of Retirement -Wall Street Journal
"People spend a lot of time wondering if they'll have the means to retire, often ignoring the equally important calculation: Do they have the will to retire? A job, historically seen as simply a way to make money, is increasingly the source of the types of friendship and stimulation that are hard to find in bingo halls, on beaches or riding a golf cart....'When people leave school it's not going to be for 25- or 30-year careers, it's going to be for a 50-year career,' says economist Olivia Mitchell, a professor at the University of Pennsylvania's Wharton School of Business....Patagonia, the outdoor clothing maker, is among an army of companies analyzing how it will deal with a rising tide of older employees. Dean Carter, the California company's human-resources chief, says the company is intent on providing a 'glide path' for people nearing retirement who don't want to simply fall off a 'cliff.'...The company realized it would be a mistake to see its 'elders' walk out the door because there wasn't a way for them to work less formal schedules, and began to implement changes. The company's longtime editor, for instance, has left her day-to-day role editing company materials, but she is teaching younger charges how to write in the 'Patagonia voice,' Mr. Carter says. Other elders are spending time in the lunchroom at the Ventura, Calif., headquarters passing down stories; traveling the world lecturing on the company's culture; or conducting sessions on the environment."
1.10.20 - One major reason you shouldn’t sell gold right now -CNBC
Gold last traded at $1,559 an ounce. Silver at $18.12 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a flat dollar. U.S. stocks hit record highs despite weaker-than-expected jobs data as Wall Street concluded a volatile week chock-full of geopolitical concerns.
One major reason why you shouldn’t sell gold right now -Longview/CNBC
"Gold is often used as a hedge against inflation, in other words, to protect the decreased purchasing power of a currency resulting from its loss of value due to rising prices....Longview Economics CEO Chris Watling suggested that the one key reason not to bet against gold prices continuing to climb would be the Fed's repo program, an ongoing operation to soothe the overnight lending market. 'It is putting a lot of liquidity, a lot of dollar money, into the system, and that is supporting the price,' he added. Analysts have been broadly bullish on gold of late, with Goldman Sachs expecting a base case for it to trade at $1,600 per troy ounce...Goldman's Global Head of Commodities Research Jeff Currie told CNBC's 'Street Signs' on Friday that with the right combination of circumstances, gold could push even higher through 2020. 'Gold is a hedge against debasement and what we saw in 2011 was debasement, printing too many dollars and the real rate goes down, down, down, which then pushes up the price of gold,'....'If you do see that, the potential to push gold back up into that $1,800-$1,900 range becomes pretty realistic,' he added."
77% Of CFOs Say Stock Market Is Overvalued Even As They Order Record Stock Buybacks -Zero Hedge
"Over the past two years, a dramatic, profound divergence emerged between consumer and CEO (or corporate professional) confidence, with the former soaring to record highs while the latter tumbling to financial crisis levels....The biggest paradox is CFO sentiment toward the market: as the S&P hits new record highs on an almost daily basis every day since the Fed launched QE4 last October, 77% of respondents said stocks are overvalued, the highest level in nearly two years. Just 4% said equities are undervalued, down from 10% in the last reading. Why is this a paradox? Because while over three-quarters CFOs lament just how expensive the market has become, virtually all of them are scrambling to repurchase their 'overvalued' stock, with total buybacks in 2018 and 2019 hitting record highs on largely thanks to Trump's tax law, which allowed US corporations to repatriate about $1.5 trillion in offshore cash, much of which was then used by companies to buy back their stock....So while most corporate Corner Suites are now convinced all stocks are overvalued, they keep a special place in their heart for their own stock... as the higher their own stock goes, the greater their equity-linked comp. In other words, while most agree stocks are overvalued, they will keep buying (back) these overvalued stocks as their pay literally depends on it. Meanwhile, as everyone rushes to buyback their own stock, the entire market just gets even more overvalued, and it is up to the Fed to make sure not even a modest market correction takes place, or else the correction will promptly transform into a full-blown crash."
Dow crosses 29,000 for first time -Fox Business
"The Dow Jones Industrial Average climbed above 29,000 for the first time despite the December jobs report falling short of expectations. All three of the major averages were trading in record territory. The U.S. economy added 145,000 nonfarm jobs in December, the Labor Department said on Friday, missing economists' estimates of 164,000. 'The number was a touch lighter than expectations but showed solid payrolls and wage growth, which should be enough to keep the consumer spending and the economy muddling along,' said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. The unemployment rate held at 3.5 percent. The Dow crossing 29,000 is a 'signal that investors are more comfortable with the economy, the decrease in trade tensions and now the decrease in Middle East tensions,' said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance...Looking at commodities, West Texas Intermediate crude oil was little changed at $59.50 a barrel and gold was up 0.1 percent at $1,556 an ounce."
Be Prepared for President Sanders -Wall Street Journal
"Bernie Sanders significantly outraised his Democratic presidential rivals in the final three months of 2019. He is very much in the hunt for the first three contests of the primary season. He has run second, behind Joe Biden, in national polls for most of the past year and matches up better head-to-head against President Trump than either Elizabeth Warren or Pete Buttigieg. When Sanders supporters complain that the political press isn’t giving their guy the attention he deserves, they have a point. Odds are that the Vermont senator won't be the next president, but it isn't out of the question. The RealClearPolitics polling average has him leading in Iowa and New Hampshire and less than a point out of second place in Nevada, the third contest....Four years ago, Mr. Sanders virtually tied Hillary Clinton in the Iowa caucuses and easily won the New Hampshire primary....This year, Michael Bloomberg will be on the Super Tuesday ballots, and whatever votes he garners likely will come at the expense of fellow moderate Joe Biden, which could help Mr. Sanders. If his campaign starts strong, it's possible that the Democratic establishment could turn on Bernie like it did four years ago. But that runs the risk of alienating his large and enthusiastic base of supporters, and it's hard to see Democrats beating Mr. Trump without the Sandernistas chipping in....Mr. Sanders's socialism is the last thing America needs, and let's hope Democrats reject it. But in a country this divided, and with voters on both sides this motivated, the plain truth is that the president is vulnerable to anyone his opponents nominate."
1.9.20 - Gold Prices Could Hit $3,000 by 2025
Gold last traded at $1,554 an ounce. Silver at $17.95 an ounce.
NEWS SUMMARY: Precious metal prices eased back Wednesday as Iran war fears faded and the dollar firmed. U.S. stocks hit fresh highs as geopolitical fears eased and tech shares outperformed.
Gold could hit $3,000 by 2025: expert -Yahoo Finance
"Gold prices pulled back on Wednesday after climbing above $1,600 for the first time in seven years as tensions between Iran and the United States simmered. Still, the commodity has been one of the best performing assets in the world and one strategist says it's only getting started. 'I think by 2025 gold will be at least $2,500 to $3,000 an ounce,' Heritage Capital's Paul Schatz told Yahoo Finance's On the Move. 'I don't think the rally is over in gold by any means.' Gold prices are up nearly 4% in just the first few weeks of 2020. Earlier this week, the commodity jumped as much as 2.4% after Iran attacked U.S.-led forces in Iraq in retaliation for a U.S. drone strike that killed an Iranian military commander last week. 'Gold sentiment's really hot right now - everybody loves gold,' Schatz said."
A New Gold Standard: Orderly Or Chaotic? -Rickards/Daily Reckoning
"Over the past century, monetary systems change about every 30 to 40 years on average. Before 1914, the global monetary system was based on the classical gold standard. Then in 1945, a new monetary system emerged at Bretton Woods...Under that system, the dollar became the global reserve currency, linked to gold at $35 per ounce. In 1971 Nixon ended the direct convertibility of the dollar to gold. For the first time, the monetary system had no gold backing. Today, the existing monetary system is nearly 50 years old, so the world is long overdue for a change. Gold should once again play a leading role....Slippage in the dollar's role as the leading global reserve currency is not necessarily something that would happen overnight, but is more likely to be a slow, steady process. Signs of this are already visible. In 2000, dollar assets were about 70% of global reserves. Today, the comparable figure is about 62%. If this trend continues, one could easily see the dollar fall below 50% in the not-too-distant future....Gold reserves at the People's Bank of China (PBOC) increased to 1948.31 tons in the fourth quarter of 2019. For comparison, it held 1,658 tonnes in June, 2015...Gold's been flowing to China in recent years, just as gold flowed to the U.S. before Bretton Woods. China is not alone in its efforts to achieve creditor status and to acquire gold. Russia has greatly increased its gold reserves over the past several years and has little external debt....Iran has also imported massive amounts of gold, mostly through Turkey and Dubai...The dollar collapse has already begun and the need for a new monetary order will need to emerge. The question is whether it will be an orderly process resulting from a new monetary conference, or a chaotic one. Unfortunately, it'll probably be chaotic."
Doubts over phase one trade deal as US-China ties 'still in deep trouble' -South China Morning Post
"The 'phase one' trade deal between China and the United States is unlikely to lead to a broader pact because 'excessive' demands by Washington have left Chinese officials feeling it is 'useless' to engage. That is the view of Jia Qingguo, one of Beijing's top foreign policy experts and a professor of international studies at Peking University. 'Despite the recent announcement that we are going to have the first phase agreement, [the] relationship between China and the US is still in deep trouble and is heading south rather than north. It is getting worse,' Jia told the Regional Outlook Forum 2020 hosted by the ISEAS-Yusof Ishak Institute in Singapore on Thursday. His comments came as plans were announced for a Chinese trade delegation, led by Vice-Premier Liu He, to travel to Washington on January 13 for the signing of an interim deal in the costly trade war between the world's two largest economies....A 'whole deal' might not be hammered out, as the Chinese believed the US demands were 'not about money but about life'. 'China's patience is wearing thin. US wants not just some concession from China, but to topple the Chinese government and contain China,' he said."
Top Repo Expert Warns Fed Is Now Trapped: "It Will Take Pain To Wean The Repo Market Off Easy Cash" -Zero Hedge
"Curvature Securities' Scott Skyrm writes in his daily Repo Market Commentary note, 'the total overnight and term Fed RP operations on Friday were greater than on year end! On year-end, the Fed had pumped a total of $255.95 billion into the market verses $258.9 billion on Friday.' The problem with the broken repo market and the Fed's respective Repo operations, similar to the problem observed with QE and the Fed's balance sheet in general over the past decade, is that the market had gotten addicted to the easy Fed liquidity unleashed in September (via temporary repo ops), and then again in October (via permanent T-Bill purchases). As Skyrm writes, 'it's easy to see how the Repo market can get addicted to easy cash from the Fed when the stop-out rates for the RP operations are 1.55% - behind the offered side of the market.' But, as the repo strategist adds, as the Fed keeps injecting cash, the market gets used to it....Skyrm cautions that 'it will take pain to wean the Repo market off of cheap Fed cash'....The longer the Fed avoids pulling the repo liquidity band-aid, the bigger the market fall when (if) it finally does. The question then becomes whether Powell can keep pushing on the repo string until the November election, because a market crash in the months preceding it, especially since it will be of the Fed's own doing, will result in a very angry president."
1.8.20 - Gold Touches $1,600 on Iran Attack
Gold last traded at $1,559 an ounce. Silver at $18.17 an ounce.
NEWS SUMMARY: Precious metal prices steadied Wednesday after a spike following an overnight Iran attack. U.S. stocks opened flat as investors recovered from a steep overnight decline after Iran fired rockets at an Iraqi airbase that hosts American troops.
Gold retreats from $1,600 as markets eye US reaction after Iran attacks -CNBC
"Gold prices surged past the $1,600 level for the first time in nearly seven years earlier on Wednesday after Iran conducted retaliatory attacks against U.S. forces in Iraq, but the metal pared gains as investors awaited reaction from the White House. 'Gold is paring some gains right now as the retaliation was not seen as aggressive as the markets thought it would be and investors are booking profit for that reason,' Saxo Bank analyst Ole Hansen said. 'How gold will move from here is pinned on what U.S. President Donald Trump says when America wakes up,' Hansen added....The metal, considered a safe investment in times of political and economic uncertainties, was still supported as fears of a military lockdown in the Middle East remained. Gold further got a boost from a dip in equities markets."
Iran Threatens Further Retaliation After Missile Strikes Against U.S. -Wall Street Journal
"Iranian Supreme Leader Ayatollah Ali Khamenei vowed further retaliation for the U.S.'s targeted killing of an Iranian commander, hours after striking military bases in Iraq that house U.S. forces...Ayatollah Khamenei, Iran's top spiritual and political authority, said Iran's end goal was to expel U.S. forces from the region. 'Last night, they were given one slap,' he said in a speech in the holy city of Qom broadcast live on state television. 'Such military actions are not enough as far the importance of retaliation is concerned. What's important is that their corruption-creating presence should end.'....A U.S. official said the attacks left no casualties but that a damage assessment was still under way. Iraqi security forces said 22 rockets fell on sites housing coalition forces, including two that didn't explode, but there were no casualties....The attacks were the latest blow in a rapidly escalating conflict between Tehran and Washington that has opened a new chapter in U.S.-Iranian hostilities and raised the risk of an outright military conflict....President Trump seemed to play down the Iranian attack. 'All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good!' Mr. Trump said on Twitter."
How Money Printing Contributes to America's Downward Spiral -Bonner/Bonner And Partners
"In a prosperous, civil society, win-win-deals between consenting adults add to the wealth of the country...And the government - with its naked, win-lose power - is held in check by culture, constitutions, checks and balances...and most important, by a scarcity of resources. A war society is a different matter. It is win-lose all the way… and claims almost unlimited resources for the war effort....Today, we take up another bone-headed, society-destroying mistake of the 21st century...We're talking about money. When the money goes, everything goes. You can quote us on that....Stocks are at all-time highs, but only because of front-running by speculators and buy-backs by corporate insiders. Real, pre-tax earnings growth is falling. Unemployment is near all-time lows, but only because people are forced to take low-paying 'gigs' in the service economy. Real, 'bread-winner' jobs continue to disappear. GDP growth is still positive, but only because the Fed lends money below the rate of consumer price inflation....In a world of free money, conservatism no longer makes sense. Why worry about wasting money… when you can print more? Over a nearly 50-year period since the fake money was introduced in 1971, the old conservatives disappeared, died, or became new conservatives - who joined the Liberals as supporters of Big, World-Improving Government."
'Buffett Indicator' Warns Stocks Doomed for Worse Crash Than 2008 -CCN
"Named after the widely-venerated 'Oracle of Omaha,' the Buffett indicator reflects Warren Buffett's characteristically simple thinking about stock values. It's the total stock market capitalization of the United States relative to U.S. GDP. If the indicator gets too top heavy, with the total market value of stocks significantly exceeding the productivity of the underlying companies, Buffett would say stock prices are due for a correction. The historical returns of the stock market back him up on that. Today the indicator is soaring at a harrowing record high. Just before the Dot Com Bubble collapsed, total U.S. market cap stood at 146% of GDP, according to the Federal Reserve's books. Right before the Great Recession that began at the end of 2007, the U.S. market cap was 137% of GDP. On the first day of trading in 2020, the Buffett indicator charted an ominous high of 153%, according to Wilshire data. As the stock market set records in the final quarter last year, the indicator rose 14% in one quarter. And corporate earnings growth is flat....If you go by the Buffett indicator, Wall Street is partying like it's 1999."
1.7.20 - Is America Vulnerable to Iran Cyberwar?
Gold last traded at $1,574 an ounce. Silver at $18.42 an ounce.
NEWS SUMMARY: Precious metal prices rose again Tuesday on safe haven buying amid ongoing market jitters. U.S. stocks drifted lower as Wall Street assessed the growing geopolitical risks stemming from U.S.-Iran tensions.
'Endless buying for gold' could signal a shift to real fear in the stock market -Cramer/CNBC
"The investment community seems to be underestimating the potential fallout from rising tensions between the United States and Iran, CNBC's Jim Cramer warns. Just after Monday's opening bell on Wall Street, Cramer said on 'Squawk on the Street' that the key to the stock market is: 'Gold, gold, gold,' which was up for the ninth straight session. 'When I see this endless buying for gold it makes me think for the first time people are just saying, 'I'm really fearful,' said Cramer. He pointed out that the gold buying started even before Thursday night's U.S. drone strike in Iraq that killed top Iranian commander Gen. Qasem Soleimani as he was leaving Baghdad's airport....'The gold buying has been endless; over and over and over. It feels like gold wants to go to $1,700 to $1,800. Now that would be very negative for the [stock] market,' Cramer added."
Cyberwar with Iran: How vulnerable is America? -USA Today
"The U.S. airstrike in Baghdad that killed Iranian General Qassem Soleimani on Friday will likely lead to retaliatory cyberattacks against America, security authorities say. That means the power and electricity you use, the smart devices you carry and your bank accounts could be more vulnerable than ever to bad actors looking for revenge....A cyber conflict between the U.S. and Iran has been silently raging for years, with hacking attempts from the Middle East being made every single day....Private-sector corporations, which include banking, health care and energy services, would be the primary targets, according to Paul Martini, co-founder of the network security platform iBoss. In the worst-case scenario, Iranian hackers 'could instantaneously shut down an entire power grid,' Martini said. 'It's not just the lights, it's also the internet which shuts down communication systems. Without shooting a single bullet or missile, you can shut down an entire county or nation.'....How can you protect yourself?...Use secure passwords. Save hard copies of information and write down phone numbers rather than relying on internet connectivity or devices."
Iran Evaluating 13 Retaliation Scenarios To Inflict "Historic Nightmare" On US -Zero Hedge
"Breaking a 5-day silence over its response for the US killing of General Qassem Soleimani, on Tuesday Iran said it was assessing 13 scenarios to inflict a 'historic nightmare' on the US. 'Even if the weakest of these scenarios gain a consensus, its implementation can be a historic nightmare for the Americans,' Ali Shamkhani, the head of Iran's national security council, was cited by Fars news agency, adding that, 'For now, for intelligence reasons, we cannot provide more information to the media.'....In response, the U.S. issued a warning to shipping in the Middle East over the possibility of Iranian action against U.S. maritime interests, the Associated Press reported, citing a statement. Soleimani's death has rippled through the Middle East, with the U.S. and its allies on high alert for a retaliation attack by Iran. Mohammad Javad Zarif, Iran's foreign minister, said Tuesday that the U.S. would suffer consequences for the killing of Soleimani 'at a time and place of Iran's choosing.' Zarif added the U.S. must leave the Middle East and warned that if they don't, a new multi-generational war could erupt....'We will surely take revenge, but if America dares takes any action, we will set alight those places Americans hold dear."....Earlier, President Trump outlined 52 Iranian sites that U.S. forces would attack if Iran dares to retaliate. And while the world awaits for Iran to pick one or more of the 13 scenarios, on Monday the Pentagon dispatched additional forces to the Middle East."
Triggering A Recession Tops The Dems’ Presidential Agendas -Issues and Insights
"The 2020 Democratic presidential field is in near unanimous agreement that fracking has to be banned or at least regulated to death over time. It plays well to the party's base, especially its green fringe. It's also an endorsement of recession. Joe Biden, currently atop the Democratic primary polls, recently said he would 'love to 'ban fracking right now,' and would also 'love to make sure we can't use any oil or gas, period,' reports Common Dreams, a website that caters to leftist and socialist devotees....'If the U.S. imposed a fracking ban, the supply disruption would trigger the biggest oil and natural gas price spikes in history - almost certainly by more than 200% - which would, in turn, tip the world into recession,' Manhattan Institute Senior Fellow Mark Mills wrote last month in a policy brief.....A fracking ban appeals not only to the eco-radicals of the left, it would satisfy the Democrats' 'recession lust.' They, as well as their supporters touched by Trump Derangement Syndrome, need a downturn to 'get rid of Trump.' 'We see Democratic leaders and the 'unbiased' media openly rooting for a recession,' economist Stephen Moore wrote in late August in the Washington Times. 'The drumbeat for an economic contraction has been nonstop for the last two weeks.'"
1.6.20 - Gold Price Hits Highest Since 2013
Gold last traded at $1,565 an ounce. Silver at $18.13 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Monday on safe-haven buying amid rising geopolitical worry. U.S. stocks fell again on growing worry of retaliation by Iran for recent U.S. assassination of a top Iranian military leader.
Gold Hits Highest Since 2013 as Goldman Backs Bullion in Crisis -Bloomberg/Yahoo Finance
"Gold surged to its highest since 2013 as rising tensions in the Middle East stoked demand for havens, with Goldman Sachs Group Inc. seeing more room to run. Bullion neared $1,600 an ounce after Tehran said it would no longer abide by any limits on its enrichment of uranium following the killing of General Qassem Soleimani. President Donald Trump said he's prepared to strike Iran 'in a disproportionate manner' if it retaliates against any U.S. target. Gold may prove a better bet than oil amid rising tensions, according to Goldman analysts. 'History shows that under most outcomes gold will likely rally to well beyond current levels,' analysts including Jeffrey Currie and Damien Courvalin said in a note. That's 'consistent with our previous research, which shows that being long gold is a better hedge to such geopolitical risks.'....Bullion is building on the largest annual climb since 2010, which was driven by the U.S.-China trade war's drag on global growth, easier monetary policy across the world's leading economies and sustained buying from exchange-traded funds and central banks. 'Negative real rates in the U.S. and a weaker U.S. dollar favor stronger precious metal prices in general,' said Giovanni Staunovo, a commodity analyst at UBS Wealth Management. 'Thus, we see value in staying long the metal.'"
One Essential Insight For The Year Ahead -Gordon/Zero Hedge
"Make no mistake, 2020 will be the year that everything happens precisely as it should. Some good. Some bad. Each day shall unfold before you with reciprocal imbalance. You can take that to the bank....The late Marty Zweig, in his book Winning on Wall Street, which was published in 1970, included the following observation: 'The monetary climate - primarily the trend in interest rates and Federal Reserve policy - is the dominant factor in determining the stock market's major direction.' Zweig is also credited with taking this observation and simplifying it in a way that Wall Street zealots can repeat with mindless refrain: 'Don’t Fight the Fed.' Without question, this is sage advice…most of the time....There are occasions to fight the Fed. And 2020 is one of them. Hence, our essential insight for the year ahead is this: 'Fight the Fed in 2020.'....Policy makers are humans too. They're likely to miss the mark from time to time. By our estimation they already have. With this as our premise, we predict the following for 2020: The S&P 500 will close out the year down precisely 32 percent. The yield on the 10-Year Treasury note will rise to 3.19 percent. And gold will sparkle to a new all-time high, eclipsing $1,900 per ounce."
Fed Admits It Pumped More than $6 Trillion to Wall Street in Recent Six Week Period -Wall Street On Parade
"If the Federal Reserve was looking for a media lockdown on news about the trillions of dollars in cumulative repo loans it has funneled quietly to Wall Street’s trading houses since September 17 of last year, it could not have found a better cloud cover than Donald Trump....The Fed's minutes revealed that after multiple expansions of this vast money spigot, which was previously set to lapse in January after getting the Wall Street trading houses through the year-end money crunch, instead it may be extended through April....The Fed's minutes also acknowledge that its most recent actions have tallied up to 'roughly $215 billion per day' flowing to trading houses on Wall Street. There were 29 business days between the last Federal Open Market Committee (FOMC) meeting and the latest Fed minutes, meaning that approximately $6.23 trillion in cumulative loans to Wall Street's trading houses had been made in that short span of time. During the 2007 to 2010 financial collapse on Wall Street - the worst financial crisis since the Great Depression, the Fed funneled a total of $29 trillion in cumulative loans to Wall Street banks between December 2007 and July 21, 2010. At the pace it is currently going, it would eclipse that $29 trillion before the middle of this year."
Central Banks Are the Biggest Risk to the Economy in 2020 -Yahoo Finance
"For the first time since the signing of the Declaration of Independence in 1776, the U.S. just completed the first calendar decade without even one day of a recession. There are a few key reasons why this is happening, and one clear risk that could bring the expansion to an end....As of November, the collective balance-sheet assets of the Federal Reserve, European Central Bank, Bank of Japan and Bank of England stood at 35.9% of their countries' total gross domestic product, up from about 10% in 2008, according to data compiled by Bloomberg. At the same time, the latest World Bank data show that developed country GDP expanded to $54.2 trillion at the end of 2018 from $46.1 trillion a decade earlier. Restated, central bank balance sheets grew at a faster rate, by $9.9 trillion, than their underlying economies....So, what happens when central banks pull back from this stimulus?....It will be extremely hard for central banks to reverse 'money printing.'....Should policy makers get their wish and some inflation returns, then it would be time to worry."
1.3.20 - Safe-Haven Buying Lifts Gold Nears 6-Year High
Gold last traded at $1,552 an ounce. Silver at $18.16 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Friday amid geopolitical anxiety. U.S. stocks fell after the U.S. confirmed that an airstrike killed Iran’s top military commander, sending oil prices surging and hiking geopolitical concerns.
Gold Nears Six-Year High as Traders Rush to Buy Haven Assets -Bloomberg/Yahoo Finance
"Gold advanced toward a six-year high after a U.S. airstrike killed one of Iran's most powerful generals, ratcheting up tensions in the Middle East and driving demand for havens...The strike in Baghdad ordered by President Donald Trump killed Qassem Soleimani, the Iranian general who led the Revolutionary Guards' Quds force. Iran's supreme leader vowed 'severe retaliation.' The news helped gold to build on the biggest annual gain in almost a decade, a rally that was driven by a weaker dollar, lower real rates and geopolitical concerns. 'Today's event has probably only brought forward the inevitable test of the September high,' said Ole Hansen, head of commodity strategy at Saxo Bank A/S. 'Rising inflation concerns through higher input prices - oil and food - combined with geopolitical uncertainty is a potent cocktail which supports a market already on the move.'"
A Crisis Has Already Begun... We Just Don't Know It Yet -Maulden/Zero Hedge
"Let's address an elephant in the room: the rapidly expanding federal debt. Each annual deficit raises the total debt and forces the Treasury to issue more debt, in hopes someone will buy it...The Fed now has also become a big part of the monetization process via its purchases of T-bills which also drives banks into buying notes. The Fed's balance sheet is now $335b higher than it was in September at $4.095 trillion. Again, however the Fed wants to define what it's doing, market participants view this as QE4 with all the asset price inflation that comes along with QE programs....It will be real interesting to see what happens in 2020 to the repo market when the Fed tries to end its injections and how markets respond when its balance sheet stops increasing in size....It sure looks like, through QE4 and other activities, the Fed is taking the first steps toward monetizing our debt. If so, many more steps are ahead because the debt is only going to get worse. As you can see from the chart, the Fed is well on its way to reversing that 2018 'quantitative tightening.'....Sometime in the middle to late 2020s, we will see a Great Reset that profoundly changes everything you know about money and investing. Crisis isn't simply coming. We are already in the early stages of it. I think we will look back at late 2019 as the beginning. This period will be rough but survivable if we prepare now."
America Is Now the Divided Republic the Framers Feared -The Atlantic
"John Adams worried that 'a division of the republic into two great parties … is to be dreaded as the great political evil.' And that's exactly what has come to pass. America has now become that dreaded divided republic. The existential menace is as foretold, and it is breaking the system of government the Founders put in place with the Constitution. Though America's two-party system goes back centuries, the threat today is new and different because the two parties are now truly distinct, a development that I date to the 2010 midterms. Until then, the two parties contained enough overlapping multitudes within them that the sort of bargaining and coalition-building natural to multiparty democracy could work inside the two-party system. No more. America now has just two parties, and that's it....By separating powers across competing institutions, the Framers thought a majority party would never form....Triple developments - the nationalization of politics, the geographical-cultural partisan split, and consistently close elections - have reinforced one another, pushing both parties into top-down leadership, enforcing party discipline, and destroying cross-partisan deal making. Voters now vote the party, not the candidate. The consequence is that today, America has a genuine two-party system with no overlap, the development the Framers feared most. And it shows no signs of resolving....The country must break the binary hyper-partisanship so at odds with its governing institutions, and so dangerous for self-governance. It must become a multiparty democracy."
Warren Zevon’s Wisdom for the 2020s -Noonan/Wall Street Journal
"Every year at this time I think of two things. One is what the musician Warren Zevon said on the 'Late Show With David Letterman.' I watched it, live, in 2002. Zevon was dying of mesothelioma, and Mr. Letterman asked how his illness had changed him. Zevon's answers suggested he'd come to feel awe for the barely noticed gifts we're given each day. Mr. Letterman asked, 'Do you know something about life and death that maybe I don’t know now?' Mr. Zevon answered: 'I know how much you're supposed to enjoy every sandwich.' That is a gift, to know how good the sandwich is. The other is a quote I read 40 years ago, from the writer Laurens van der Post in 1961: 'We live not only our own lives but, whether we know it or not, also the life of our time.' We are all making history together, we are part of an era, and we are responsible to each other and to this great project....Now, my sense of where we are. On the impeachment of the American president, the story's already been written, hasn't it? It didn't quite work, did nothing to help and little to hinder his position....On to the real action, the presidential election 10 months away. The Democratic primary field is still flailing and doesn’t see it’s flailing. At the moment their theory of the country is wrong, and it’s wrong because it’s a theory, not a cold-eyed look at circumstances and facts on the ground...If there is a grinding war or an economic downturn people will want change and the out party has a good shot. If the economic downturn is severe they will consider deep structural change, even radical change such as socialism....In the 2020s, the American position on China will harden - not the government's but the country's. Whatever happens with the administration and China, Mr. Trump will think it’s about him and lose interest when it appears not to be. Among the people, especially the business class, the perception will deepen that China is not our friend....The belief that big tech needs to be corralled - to be broken up or declared public utilities - will grow on the left and right....The past decade saw the rise of the woke progressives who dictate what words can be said and ideas held, thus poisoning and paralyzing American humor, drama, entertainment, culture and journalism. In the coming 10 years someone will effectively stand up to them...Who? How? That will be a story of the ’20s, and a good one."
1.2.20 - Recession on List of CEO Fears for 2020
Gold last traded at $1,528 an ounce. Silver at $18.04 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on safe haven buying despite a firmer dollar. U.S. stocks rose to all-time highs on the first trading day of the new year.
Gold Prices Could Climb to Another Record High in 2020 -Barrons
"Investors who didn't own gold in 2019 could be kicking themselves after an 18% rise in prices for the year. But it might not be too late to join the rally. Robust buying by central banks, a weakening of the U.S. dollar, and growing political tensions could combine to fuel further gains. 'If we think about it in percentage terms, to imagine gold making a new all-time high sometime in 2020 doesn't seem like such a stretch,' says John Roque, a technical analyst with Wolfe Research in New York City....'We believe gold will (a) break out above resistance at $1,557, (b) work to $1,650, and then (c) make a new all-time high,' says a recent Wolfe Research report....A big part of the bulls' case is that buying by central banks will continue to absorb a lot of the metal....The U.S. election, trade tensions between the U.S. and China, and the pending impeachment trial of President Donald Trump could also act as catalysts for movements in the price of gold. 'There will be a lot of volatility in markets ahead of the elections, and that will be helpful for gold' says Rohit Savant, director of research at CPM Group."
2020 all about Federal Reserve interest rates -Crudele/New York Post
"This is the time of year when columnists get to show how smart they aren't by making predictions....I'll make a prediction about the Federal Reserve....This is the most important question for everyone - home buyers, credit card users, savers, banks and stock market investors: What will the Fed do to interest rates in 2020? The Fed will try to keep interest rates at current levels...If the Fed cut interest rates, the Democrats would howl that Chairman Jerome Powell was trying to fix the election for President Trump. If the Fed raised rates, it would go the other way, with the Republicans crying foul and accusing Powell of getting even with Trump, who has been a critic of the Federal Reserve. But there is always the chance that the Fed will have to do something. What do I mean? Well, if the stock market collapses after its remarkable 30 percent-plus rise in 2019, the Fed might have to cut rates to counteract the loss of wealth the country would feel. The opposite could also be true. Inflation could start flaring up and the Fed might have to raise rates - maybe even steadily and quickly. This would send Trump into a Twitter fit. But sharply rising prices would have to be dealt with swiftly....What will the stock market do in 2020? It all depends on whether interest rates go up. If they do, the stock market will fall."
Recession Rises on List of CEO Fears for 2020 -Wall Street Journal
"U.S. chief executives are getting worried about a recession. Fear of an economic decline topped the list of their concerns going into 2020, according to a survey from the Conference Board, a business research group...Last year, growth in gross domestic product globally slipped to 2.3% from 3% in 2018, and executives felt the pressure, said Bart van Ark, chief economist at the Conference Board....The Conference Board projects that global growth will accelerate slightly this year to 2.5%....Concerns about global trade linger, even after the announcement last month that China and the U.S. had reached a first-stage trade deal....'As long as we don't have any guidance about where it's going to go next, it's very hard to make big investments,' Mr. van Ark said. 'I don't think the stress of this is going to go away.'....Other top concerns for U.S. CEOs as the new decade dawns include more intense competition, the tight labor market and global political instability."
As China Anxiety Rises in U.S., Fears of New Red Scare Emerge -BloombergQuint
"The setting was inauspicious: an auditorium at Stanford University, founded by a railroad tycoon who made his fortune off the backs of Chinese immigrants. The subject: a report describing China's efforts to manipulate American universities, corporations and media 150 years after Leland Stanford celebrated the completion of the first transcontinental line....Christopher Wray, director of the Federal Bureau of Investigation, has called China 'the broadest, most challenging, most significant' counterintelligence threat the U.S. faces and says his agency is investigating more than 1,000 cases of suspected theft of U.S. intellectual property, with 'almost ' of them leading back to China. 'China has pioneered a societal approach to stealing innovation,' says Wray. The Hoover-Asia Society report, originally titled 'Chinese Influence & American Interests: Promoting Constructive Vigilance,' constitutes the most audacious attempt to date to address a fundamental challenge: How to confront China's global ambitions and avarice for U.S. technology without inciting a backlash against 5 million U.S. citizens of Chinese ancestry....The Hoover-Asia Society report argues that Beijing is devoting enormous resources to controlling what Americans write, say, learn and think about China."
12.31.19 - 2020: Another Global Roaring 20s?
Gold last traded at $1,525 an ounce. Silver at $17.97 an ounce.
NEWS SUMMARY: Precious metal prices ended 2019 at a 2-month high as uncertainty weakened the dollar. U.S. stocks fell into 2020 as Wall Street wrapped up a banner year that saw equities surge to record highs.
2020 Outlook: A Marshmallow World -Seeking Alpha
"'It's a marshmallow world in the winter. When the snow comes to cover the ground. It's time for play, it's a whipped cream day. I wait for it the whole year round.' -A Marshmallow World, Bing Crosby, 1950. It's a marshmallow world for capital markets as we enter 2020. Name the asset class, and it had a stellar year in 2019. U.S. stocks? Up over +30%. Stocks across the rest of the world? Higher by more than +20%. Investment grade corporate bonds? Up nearly +20%. High yield bonds? +14%. Long-Term US Treasuries? +15%. Gold and silver? +16% each....Stocks...Expect the S&P 500 to squeeze out a low to mid single-digit gain in 2020 assuming liquidity conditions remain sufficiently abundant...Expect 2020 stock market returns to come with greater volatility and more violent swings along the way including the potential for a decent short-term correction early in the year. Bonds...I have virtually no interest in owning riskier spread product in 2020. BBB-rated investment grade corporate bonds, high yield bonds, convertible bonds, bank loans - I want none of it. Precious Metals...I remain bullish on the precious metals complex...Why? The unabashedly dovish U.S. Federal Reserve, along with its global central bank cohorts, continue to make an absolute debauchery of the still relatively new global fiat currency system at age 48 years and counting (for how much longer, I'm not necessarily sure). Such absolute dovishness is gold and silver bullish."
2020: Another roaring 20s for world markets? -Reuters
"Helicopter cash, climate crises, smart cities and the space economy - investors have all those possibilities ahead as they enter the third decade of the 21st century. They go into the new decade with a spring in their step, after watching world stocks add over $25 trillion in value in the past 10 years and a bond rally put $13 trillion worth of bond yields below zero. Could we see a repeat of the roaring twenties, as the 1920s were known - years of prosperity, technological innovation and such social developments as women winning the right to vote? Possibly. But there's unease, along with all the euphoria. The current economic cycle is already the longest in U.S. history and a recession looks inevitable in the new decade - which also will mark 100 years since the Wall Street crash of 1929. And solutions may need to be unconventional, even more so than the extraordinary policies of negative interest rates and bond-buying that eased the post-2008 global funk. With those policies maxed out, 'in the 2020s it seems inevitable that a world of helicopter money awaits,' Deutsche Bank predicts. Another radical option under discussion is modern monetary theory, when governments create and spend as much money as needed, so long as inflation stays low...The result is a de-globalising world, or as Morgan Stanley puts it, 'slow-balisation'."
Will Recession Strike in 2020? -Wall Street Journal
"Even the best indicators of downturns are unreliable, but investors can take steps to prepare either way. Year-end is the traditional time to forecast the economy and ensure that your investment portfolio can handle future shocks....The most reliable indicators have been the shape of the yield curve, business and consumer confidence, durable-good purchases and housing starts, and the health of the labor market. These measures have also correctly signaled stock-market downturns. (The biggest exception is consumer spending, which has risen before nearly every past recessions, falling only after the recession starts.)....Our view is that the best course of action is to be agnostic about future economic activity and the direction of the stock market. We subscribe to the wisdom of John Kenneth Galbraith, who once said, 'There are two kinds of forecasters: those who don't know, and those who don't know they don’t know.' If accurate forecasts of the economy and the stock market are impossible, how should investors assess their portfolios at year-end? There are three steps every investor should take, none of which require futile attempts to forecast the future. First, ensure that their asset holdings are broadly diversified....Second, maintain the balance of their portfolios to suit their retirement timeline and risk tolerance....Third, be sure to harvest tax losses and keep costs minimal. "
Re-learning What's Important in a Tech-Obsessed World -Bonner/Bonner And Partners
"Why get the electronics out of your life? There are two reasons... maybe more. One is simple: There are only 24 hours in a day. As electronic communications and entertainment take up more and more of your time, they take over your life....Much of the 'information' you receive is fraudulent, foolish, or just plain wrong. Only some of it is true. But how do you know which is which? Again, it takes time. Real truth. Fake truth. Kinda, partial, virtual truth? With so much of it coming at you, you can't possibly take the time to know how much truthiness is in each bit. And yet, each little fragment takes time to receive and process. Then, it is stored somewhere in your brain, like an old pair of boots you put up in the attic. You may not ever think of it again. But it is still there somewhere, taking up space. And your brain space - while remarkably elastic - is not infinite. In order to make space for the old boots, you might have tossed out your grandmother's diary and forgotten your phone number. Not only do electronic messages capture your attention and devour your time, they also take over your emotional life. Little by little, you come to care about people you've never met… battles you will never fight... and issues that don't really matter. The next thing you know, you will find yourself not just a spectator ogling the on-line circus, but an actor… another clown… voicing an opinion, taking polls, leaving comments, and joining 'chat' groups. The internet has gotten a tighter grip on you than heroin on a dope addict. That world - the fake one that takes place in digital space - has become your world. That is where you live… where your time - your physical life (sitting in front of a computer screen) - and your emotional life, too, will be spent."
12.30.19 - 50% Market Plunge Inevitable -Strategist
Gold last traded at $1,518 an ounce. Silver at $18.00 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on geopolitical uncertainty and a weaker dollar. U.S. stocks retreated from their all-time highs on year-end profit taking.
Gold prices to hit $2,000 in 2020 -City Index/Kitco
"Gold is preparing to ring in the new year above the psychologically critical $1,500-an-ounce level and if this past year is any indication, gold's fortunes will continue to favor the bold, according to one analyst. As part of City Index's bold prediction, technical analyst Fawad Razaqzada said that he is looking for gold to hit a new all-time high in 2020, with prices pushing to $2,000 an ounce. Razaqzada said that his extremely bullish gold outlook comes as he expects to see global coordination among central banks to loosen monetary policy next year. He added that looser monetary policy will push bond yields further into negative territory, thereby 'boosting the appeal of noninterest-bearing precious metals.' Razaqzada said that even if gold doesn't hit his bold target, he expects the precious metal to remain in an uptrend through 2020. 'I think gold has everything going for it in 2020,' he added....'Bond yields are likely to remain depressed as global central banks try to combat slowing economic growth and subdued inflationary pressures with extraordinary loose monetary policy,' he said. However, the spark that could kick the gold rally into a higher gear is a correction in equity markets... 'As the U.S. equity market bubble finally bursts, safe-haven demand could nudge gold past its 2011 peak of $1920, before tagging the $2,000 psychological hurdle.'"
Can Trump Put Humpty-Dumpty (the USA) Back Together Again? -Simon/Epoch Times
"I'm no Nostradamus...But I'm certain 'beyond a reasonable doubt' that President Donald Trump, despite the inevitable hiccups, won't be removed from office by the Senate and will win reelection next November. But as much of a rough ride as the two hurdles might be, they are far from his most significant challenge. His real challenge, and it will be an extraordinarily difficult one, close to a 10 on the Richter scale, will be to put Humpty Dumpty - aka the United States of America - back together again. Our society is divided as it hasn't been since the Civil War. Families, friendships, and workplaces are all fractured....America, right now, despite the affluence and peacefulness, is a truly unpleasant place to live. We aren't loving our neighbors. The unfortunate result of this is that Trump alone can and must lead the way in curing the condition....He should be 'the good father,' which he evidently is to his own children, not the angry or cheated man, which he is to his political opponents, justifiably or not. This will be problematic for Trump, who thrives on confrontation, but he must do it. He could even begin that at his State of the Union address, lowering the temperature of the rhetoric....Trump should keep Humpty Dumpty always at the forefront of his mind. The nursery rhyme character has clearly fallen from the wall. The president's biggest job in his second term is to put him together again."
Don't expect Fed Chairman Jerome Powell to play nice with Trump -Crudelle/New York Post
"The relationship between Trump and Fed Chairman Jerome Powell can best be described as strained - with all the strain coming from the president's side. 'Jay Powell and the Federal Reserve Fail Again. No 'guts,' no sense, no vision! A terrible communicator!' Trump tweeted out in September after the Fed cut interest rates but not by as much as Trump wanted. That was just one in a string of harsh criticisms by Trump of Powell and the Fed. The pressure on Powell was so intense that rumors abounded that he was about to be fired. But more recently, the president tried to be nicer. There was a meeting with Powell last month after which Trump said: 'Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve.' The Fed, in a statement shortly afterward, was quick to stress its political independence...'Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy.'...So, it is pretty clear that Powell isn't going to be Trump's patsy like Greenspan was Clinton's. And that could become a problem if the economy starts to turn down during or after the impeachment....Meanwhile, stocks should continue to do well as long as it looks likely that Trump will survive impeachment, and interest rates don't rise. But if there is some odd political turn of events, or if the economy suddenly slows or Trump's trade deals sour, then the president will be in trouble."
Stock market bubble is forming and a 50% plunge is inevitable: strategist -Yahoo Finance
"One can't help but to think the 'everything rally' that is engulfing Wall Street right now is a classic asset bubble just waiting to explode sometime in 2020. 'I think so,' AdvisorShares CEO Noah Hamman told Yahoo Finance's The First Trade, referring to whether we are witnessing a bubble form across asset classes. 'It will continue on for a while for as long as we see we have an indication that we could have lower rates ahead possibly though with a pause, but with an increasing Fed balance sheet.' By 'everything rally,' we mean assets of all kinds are in major rally mode almost in unison. It's as if investors - which are being hyped up on a steady dose of Fed rate cuts in 2019 and the signing of a phase one trade deal between the U.S. and China - are beginning to completely misprice asset risk amid fear of missing out on rising markets. Oftentimes that ends up badly for investors....'With a drop in extreme bullish sentiment and now a breakout above resistance, we think in the early days of 2020, gold and silver are poised to challenge their highs from September. As momentum begins to build in gold and silver, we are comfortable chasing strength and would absolutely be buying dips,' said Renaissance Macro strategist Jay deGraaf....Hamman thinks the Fed'’s actions are 'driving up prices everywhere.' He does caution that if the Fed signals a change in interest rate policy by mid-2020, the bubble could explode. 'It could be a huge bubble, and we could see huge declines - 50% and 60% declines that happen quickly before you have a chance to react to them.'"
12.27.19 - The Crisis of 2020
Gold last traded at $1,518 an ounce. Silver at $17.99 an ounce.
NEWS SUMMARY: Precious metal prices rose to 7-week highs Friday on safe haven buying. U.S. stocks touched fresh records as year-end optimism continued to drive the rally.
Gold off to the races -Kitco
"Gold and silver are taking off to the upside. After struggling for months, the metals seem to have found their bullish footing. For the past three to four weeks, gold and silver were showing some bullish footing. This week, they finally broke out and look to be ready to test the highs. Markets trade in three basic phases - consolidation, trend and blow off. After sitting in a downtrend for months, the metals found the consolidation pattern and now have broken out, forming what appears to be a new uptrend. The power of the breakout should certainly take the metals to the recent highs we saw in late August. Based on algorithms and the chart formation, gold and silver could have a long way to run. The trend is now higher, and this rally could gather steam going into the New Year. We are long gold and silver and expect an extended run higher."
The Millennials-Versus-Boomers Fight Divides the Democratic Party -The Atlantic
"The United States is a fortress of gerontocracy besieged by a youth rebellion. America's leaders are old - very old. The average age in Congress has never been higher, and our national leaders are all approaching 80...Americans 55 and up account for less than one-third of the population, but they own two-thirds of the nation's wealth...Americans under the age of 40 are historically well educated, peaceful, and law-abiding. But this impressive resume of conscientiousness hasn't translated into much economic or political power....Young Americans demanding more power, control, and justice have veered sharply to the left. This lurch was first evident in the two elections of Barack Obama, when he won the youth vote by huge margins. But upon closer examination, the Democrats aren't really the party of the young - or, for that matter, of social-justice leftists. In the most sophisticated poll of the Iowa caucus, Joe Biden polled at 2 percent among voters under 30, within the margin of error of zero. Bernie Sanders, by contrast, leads all candidates among voters under 30 and polls just 5 percent among voters over 65....It might be most useful to think about young progressives as a third party trapped in a two-party system.....This group's support for Medicare for All, free college, and student-debt relief is sometimes likened to a 'give me free stuff' movement....'This is only the halfway point of an epochal change in Western politics following the Great Recession,' Keir Milburn says. The far right has responded with calls for xenophobic nationalism to preserve national identity, while the left has responded with calls for social democracy to restore socioeconomic justice. Assuming Milburn's analysis is correct, the young progressive movement will have to shed its first adjective in order to gain power. In 2016, voters older than 40 accounted for nearly three-fifths of all primary voters. It is impossible to win a national election by running a campaign of generational warfare that runs counter to, or directly indicts, a majority of the electorate. One way or another, America’s third party will have to grow up."
The Crisis of 2020 -Roach/Project Syndicate
"It doesn't take much to spark corrections in vulnerable economies and markets, and big shocks to highly vulnerable systems are a recipe for crisis...Predicting the next crisis - financial or economic - is a fool's game. Yes, every crisis has its hero who correctly warned of what was about to come...But the record of modern forecasting contains a note of caution: those who correctly predict a crisis rarely get it right again. The source of vulnerability that I worry about the most is the overextended state of central-bank balance sheets...which is essentially a failed policy experiment...Steeped in denial, central banks are once again upping the ante on balance-sheet expansion as a means to stimulate flagging economic recoveries....According to the widely cited metrics of Nobel laureate economist Robert Shiller, equity prices relative to cyclically adjusted long-term earnings currently are 53% above their post-1950 average and 21% above the post-crisis average since March 2009. Barring a major reacceleration of economic and earnings growth or a new round of Fed balance-sheet expansion, further sharp increases in US equity markets are unlikely....The problem also lies in weak real economies that are far too close to their stall speed. The International Monetary Fund recently lowered its estimate for world GDP growth in 2019 to 3%....In such a vulnerable world, it would not take much to spark the crisis of 2020...Three 'Ps' are at the top of my list of concerns: protectionism, populism, and political dysfunction....The diagnosis of vulnerability needs to be taken seriously, especially because it can be validated from three perspectives - real economies, financial asset prices, and misguided monetary policy. Throw a shock into that mix and the crisis of 2020 will quickly be at hand."
The Key to Solving the Climate Crisis Is Beneath Our Feet -Brown/TruthDig
"The Green New Deal resolution that was introduced into the U.S. House of Representatives in February hit a wall in the Senate, where it was called unrealistic and unaffordable....The problem may be that a transition to 100% renewables is the wrong target. Reversing climate change need not mean emptying our pockets and tightening our belts. It is possible to sequester carbon and restore our collapsing ecosystem using the financial resources we already have, and it can be done while at the same time improving the quality of our food, water, air and general health. Contrary to popular belief, the biggest environmental polluters are not big fossil fuel companies. They are big agribusiness and factory farming, with six powerful food industry giants - Archer Daniels Midland, Cargill, Dean Foods, Dow AgroSciences, Tyson and Monsanto (now merged with Bayer) - playing a major role. Oil-dependent farming, industrial livestock operations, the clearing of carbon-storing fields and forests, the use of chemical fertilizers and pesticides, and the combustion of fuel to process and distribute food are estimated to be responsible for as much as one-half of human-caused pollution....There is a much cheaper and faster way to sequester carbon from the atmosphere that doesn't rely on these corporate giants to transition us to 100% renewables. Additionally, it can be done while at the same time reducing the chronic diseases that impose an even heavier cost on citizens and governments. Our most powerful partner is nature itself, which over hundreds of millions of years has evolved the most efficient carbon sequestration system on the planet....David Perry writes on the World Economic Forum website: 'This solution leverages a natural process that every plant undergoes, powered by a source that is always available, costs little to nothing to run and does not cause further pollution. This power source is the sun, and the process is photosynthesis.'....Perry observes that before farmland was cultivated, it had soil carbon levels of from 3% to 7%. Today, those levels are roughly 1% carbon. If every acre of farmland globally were returned to a soil carbon level of just 3%, 1 trillion tons of carbon dioxide would be removed from the atmosphere and stored in the soil - equal to the amount of carbon that has been drawn into the atmosphere since the dawn of the Industrial Revolution 200 years ago. The size of the potential solution matches the size of the problem....One proposed solution is to transfer the $20 billion in subsidies that now go mainly to Big Ag into a fund to compensate small farmers who transition to regenerative practices. We also need to enforce the antitrust laws and break up the biggest agribusinesses, something for which legislation is now pending in Congress. At the grassroots level, we can vote with our pocketbooks by demanding truly nutritious foods....The bottom line is that saving the planet from environmental destruction is not only achievable, but that by focusing on regenerative agriculture and tapping up the central bank for funding, the climate crisis can be addressed without raising taxes and while restoring our collective health."
12.26.19 - George Bailey Saw The Miracle of Capitalism
Gold last traded at $1,514 an ounce. Silver at $18.00 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on momentum buying and a weaker dollar. U.S. stocks rose as record holiday spending boosted the 2019 market rally.
Gold Makes Headway Above $1,500 as 2020 Comes Into Closer Focus -Bloomberg/Yahoo Finance
"Gold firmed up a foothold above $1,500 an ounce as investors positioned for 2020, with post-Christmas gains coming even as global equities inched higher and U.S.-China trade concerns eased. Silver rose along with platinum in what's been a banner year for precious metals. Spot bullion advanced for a fourth day, the best run since October, and headed for the highest close in more than seven weeks. The metal is on pace for biggest annual gain since 2010. The break through $1,500 in the face of new highs in U.S. equities, a rebound in U.S. Treasury yields and a strong dollar 'leads to an assumption that bulls will buy in the New Year, so the market is trying to position ahead of time,' said Tai Wong, the head of metals derivatives trading at BMO Capital Markets. 'It has momentum that is a little mysterious and no one wants to stand in the way.'....Gold is up about 18% this year as investors weigh the benefit of havens amid the to-and-fro of the U.S.-China trade war and a run of central-bank easing. The latest tick higher came even as Donald Trump said Tuesday a deal with Beijing is 'done.'"
George Bailey Saw the Miracle of Capitalism -Wall Street Journal
"Frank Capra's 'It's a Wonderful Life' rose from commercial failure after its 1946 release to Christmas fixture starting in the 1970s. The film tells a story offering insight into how Americans perceive our economy and their role in it....The film's antagonist is the banker Henry Potter (Lionel Barrymore), who epitomizes the Democrats’ caricature of unredeemable capitalism. Peter Bailey (Samuel Hinds) defends capitalism in an often overlooked dialogue when he asks his son George (Jimmy Stewart) to join his building-and-loan business. George dreams of adventure and wealth and wants no part of 'this business of nickels and dimes and spending all your life trying to figure out how to save 3 cents on a length of pipe.' His father, being older and wiser, responds: 'I feel that in a small way we are doing something important. Satisfying a fundamental urge.'....What the Baileys' penny pinching accomplished in moving Bedford Falls families out of Mr. Potter's slums has been achieved by real-life Baileys throughout our nation's history. Those who were able to save pennies enriched all mankind. Henry Ford saved pennies and put America on wheels, Thomas Edison cheaply electrified the world and Sam Walton's cost savings brought quality goods to working-class families at prices they could afford....Peter Bailey's insight reflects a vision originating in the Enlightenment, which set people free to promote their interest, and in the process, through Adam Smith's invisible hand, promote the interests of mankind....Capitalism alone respects life's greatest gift: the freedom to choose how you live your life, where you discover meaning, and what you sacrifice for...The film's rebirth suggests that when the Baileys of America fully understand the choice they face, they will choose the hard work and fulfillment of economic freedom over the economic suicide of socialism."
How It's a Wonderful Life went from box office failure to Christmas classic -The Independent
"Before James Stewart was sent off to fight in the Second World War, he was one of Hollywood's biggest movie stars. He'd appeared in 28 films, had been nominated for an Oscar for Mr Smith Goes to Washington, and even won one for Best Actor a year later for The Philadelphia Story. He was riding high. But after spending three years fighting the Nazis in the US Air Force, the 37-year-old returned home in 1945 to find that everything had changed. His contract with MGM had run out, his agent had left the movie business, and he was suffering from what would later be recognized as post-traumatic stress disorder. Capra - who had directed Stewart twice before, including on Mr Smith Goes to Washington - wanted to pitch a film called It's a Wonderful Life....Stewart plays George Bailey, a young man with dreams of 'shaking off the dust of this crummy old town', becoming an architect, and traveling the world. But, gradually, he feels the walls of Bedford Falls closing in on him. Driven to the brink of suicide after a lifetime of sacrificing his own dreams for others, Bailey is visited by an angel called Clarence, who shows him what the world would have been like without him. 'Each man's life touches so many lives,' says Clarence. 'When he isn't around, he leaves an awful hole, doesn't he?'....'I'm not a praying man,' Stewart says, 'but if you're up there and you can hear me, show me the way. I'm at the end of my rope. Show me the way, God.' As he rubs a clenched, trembling hand against his mouth, he starts to cry. That moment, which actor Carol Burnett later described as 'one of the finest pieces of acting anyone has ever done on the screen', wasn’t in the script. 'As I said those words' Stewart said in 1977, 'I felt the loneliness, the hopelessness of people who had nowhere to turn, and my eyes filled with tears. I broke down sobbing. That was not planned at all.' By the time the film was complete, almost everyone involved was convinced of its inevitable success. 'I thought it was the greatest film I ever made,' said Capra. 'Better yet, I thought it was the greatest film anybody ever made.' The world didn’t agree. When it opened in 1947, It's a Wonderful Life fell well short of breaking even....The film placed 26th in box office revenues for the year. 'By the end of 1947,' said Stewart, 'the film was quietly put on the shelf.' For a few decades, that's where it stayed. But then, slowly and surely, the film was reassessed....Republic Pictures, who owned the film's copyright, had such little faith in it that they failed to renew the rights for a second term in 1974. American television channels, grateful for the free content, started showing it on repeat...It's a Wonderful Life has hardly been off TV and film screens since, and has come to be considered one of the greatest films Capra ever made...'The movie simply refused to stay on the shelf,' Stewart said. 'Those who loved it, loved it a lot, and they must have told others. They wouldn’t let it die any more than the angel Clarence would let George Bailey die.'"
The Future's So Bright, I Gotta Wear Shades -P.J. O'Rourke/American Consequences
"Predictions often tell you more about the predictor than the predicted. There's a fine line between making prognostications and drawing up a wish list… And I'm going to cross it. No, I can't tell you what's going to happen in the 2020s...The future always contains a large measure of 'unknown unknowns.' My predictions may not be useful, but at least they're cheerful instead of just right or wrong. Thus, my forecast for the next decade is… sunny weather! Starting with climate change… It's happening. But what if it turns out to be a good thing? I live in rural New Hampshire. We could use a month less of winter. In fact, we could use six months less. True, rising sea levels may put New York and Los Angeles under six feet of water… But let's accentuate the positive - New York and Los Angeles under six feet of water. And global warming may make Iraq, Iran, and Saudi Arabia too hot to be inhabited. Bonus. The cultural climate will change, too. The social media fad will pass. One day we'll all wake up thinking, 'Whose bright idea was it to put every idiot in the world in touch with every other idiot?' Facebook, WhatsApp, WeChat, and Instagram will be the mood rings, Nehru jackets, Cabbage Patch dolls, Pet Rocks, hula hoops, and attempts to stuff a record number of people into a Volkswagen Beetle of the 2020s...As a result, Big Tech will go the way of the Big Three automakers, and Michael Moore's 2029 feature film will be about lives of economic desperation in Cupertino, California. Speaking of automakers, the self-driving car will turn out to be a flash in the pan. By the time self-driving car software gets smart enough to know how to negotiate America's traffic jams, it will be smart enough to know that only an idiot wants to negotiate America's traffic jams. The self-driving car will refuse to leave your driveway. A great excuse to - always - work from home!....Mike Bloomberg was accused of attempting to buy the 2020 U.S. presidency. In 2024, he actually does…although he only has to pay $9.95 because that's all the office is worth after the Democrats get done trashing it - one way or another."
12.24.19 - How Congress & the Fed Stole Christmas
Gold last traded at $1,502 an ounce. Silver at $17.80 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Tuesday amid weak economic data and trade tensions. U.S. stocks backed off from recent highs in a shortened Christmas Eve session.
Gold set for best year since 2010 -Yahoo Finance
"Gold prices are set for their best year of gains since 2010, as global trade tensions have spooked markets and sparked a rush for the 'safe haven' asset...Analysts said weaker data on the US economy had sparked the rally. Data on Monday showed growth in new orders for key capital goods production almost grinding to a halt, according to Reuters. Uncertainty remains high over the US-China tariff war, despite recent announcements of progress towards an agreement by both sides. 'We are still not 100% clear if the 'phase one' deal will go through or not, it has not been signed yet,' Stephen Innes, a market strategist at AxiTrader, told Reuters. 'We then pivot to 'phase two' that suggests you need some gold, because we don't know what the next phase is all about, how contentious of a deal that is going to be.' He added that concerns remained about how big of a toll the current Chinese tariffs hitting US firms would continue to impose on the US economy in 2020. The tensions over the past year have rattled investors. Despite more recent stock market recoveries, gold remains on track for its best year in nine years, up 16%."
Christian and Jewish congregations share seasonal holiday customs -Pittsburgh Post Gazette
"The pews of Calvary Episcopal Church in Shadyside were filled on Sunday morning for one event that happens every year, to be followed by one it had never hosted before. The usual: Since it was the fourth Sunday of Advent, the one closest to Christmas, the church hosted its annual pageant in the historic Gothic sanctuary, where children who were dressed as Mary, Joseph, shepherds, angels and wise men re-enacted the story of the birth of Jesus...The new: Joining the Calvary congregants in the pews were numerous guests from Tree of Life / Or L'Simcha Congregation, who then returned the courtesy. Members of the synagogue afterward hosted a party celebrating Sunday's start of Hanukkah, serving up signature foods of the holiday such as potato pancakes and jelly doughnuts, along with songs about dreidels and more...It was an interfaith exchange that might happen between any two Jewish and Christian congregations....Alan Hausman, a vice president at Tree of Life, said the two congregations formed a fast bond. 'The reality is, everyone should share like this, so we all learn to get along and learn about each other...' he said....Rabbi Myers said there was much familiar in the church's liturgy, such as prayers and Scriptures rooted in Jewish tradition. 'So you see that there's so much more we have in common with each other,' he said. 'Let's work on those commonalities to guide future choices that we make.'"
The IRA Bait and Switch -Editorial Board/Wall Street Journal
"The trouble for retirement accounts begins on page 643 of Congress's behemoth spending bill, under the always ominous heading: 'Title IV - Revenue Provisions.' That’s where lawmakers upended the meticulous estate planning of who knows how many Americans. Soon many people who inherit an Individual Retirement Account will be required to empty it within 10 years. Under the old rules, an heir - say, a 5-year-old grandchild - could stretch the required distributions over his lifetime. That meant longer tax-free growth to build family wealth. Smaller distributions also could prevent the heir from vaulting into a higher tax bracket. No more. The new rule is 10 years, with exceptions for spouses, minor children and heirs who are disabled or chronically ill....The provisions at issue here are part of the Secure Act, which was a 124-page bill before being wrapped into the spending package. Some of its changes to retirement rules are modest updates. The age limit on contributing to a traditional IRA will be eliminated. Mandatory distributions will start at 72, not 70½. Given longer lifespans, these are prudent tweaks. The rub is that they reduce revenue. To help pay for the bill, Congress killed the 'stretch IRA' for heirs....Changes should be gradual, with grandfather clauses. In its hurried Christmas spending spree, Congress has shown how carelessly it is willing to break its end of the bargain. Today stretch IRA investors and heirs are being betrayed."
How Congress & The Fed Stole Christmas -Paul/Zero Hedge
"The bickering over impeachment did not stop the president and Congress from coming together last week to avert a government shutdown by passing a 1.4 trillion dollar spending package....Both bills were unveiled last Monday afternoon. The bills passed the House on Tuesday, so only the House leadership and the members of the Appropriations Committee (and their staffs) who helped write the over 2,000-page deal had any idea what was in the bills. The modern practice of funding the government via gigantic omnibus bills that are rushed into law puts the growth of government on autopilot. Meanwhile, the Federal Reserve continues pumping billions into the repurchasing market. When the Fed began injecting money into the market in September, it said intervention was a temporary measure to address a short-term liquidity shortage. Three months later, the Fed is not only continuing to bail out the repurchasing market, it is preparing for other bailouts. This is further evidence that we are on the verge of another Fed-created economic crisis....The Federal Reserve's manipulation of interest rates depreciates the dollar's value, enabling the growth of the welfare-warfare state while enriching the insiders who receive the new money before prices rise. The brunt of dollar depreciation is felt by middle- and working-class Americans whose paychecks do not keep up with the rising cost of living...Auditing and ending the Fed should thus be a top priority of those concerned about rising income inequality and poverty."
Swiss America will be closed Wednesday for Christmas. Happy Holidays from our family to yours!
12.23.19 - Inside China's Plan to Become No. 1
Gold last traded at $1,487 an ounce. Silver at $17.49 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying in thin, pre-holiday trading. U.S. stocks rose after China said it will cut import tariffs on a wide range of goods.
Money managers hike bullish gold positioning -Kitco
"Large speculators rebuilt bullish positioning in gold futures during the most recent reporting week for data compiled by the Commodity Futures Trading Commission (CFTC)....The commission issues two reports each Friday - a so-called 'legacy' report and a 'disaggregated' report, started in 2009 and meant to offer more detail. The disaggregated report shows that in the week to Dec. 17, money managers' net-long position rose to 201,721 futures contracts from 183,648 the week before....'With central banks keeping interest rates low, we are seeing gold buying on expectations we will get more demand in the New Year,' said Phil Flynn, senior market analyst with at Price Futures Group. '“Some people are also using it as a hedge against a rising stock market.' He explained that they also are looking at gold as a safety play in case stocks suddenly fall sharply from their recent record highs."
Keeping Stock Market Returns In Perspective -Global Macro Monitor
"We just want to pass on some data to keep this year's stock rally in perspective. We are seeing a lot super giddy behavior out there as the S&P500 makes a new all-time high but…wait for it…at record high valuations by almost any measure....We are back to the '“old school' of buying low and selling high, or selling high and buying low though we do put on an occasional trade. Buying high and trying to sell higher, aka the 'greater fool theory' is too risky in an algo driven market."
"The data show that the S&P500 index is up 28.50 percent this year, 29.44 percent annualized and up 37 percent from the 2018 Christmas Eve closing low. But… up only 7.85 percent on an annualized basis from the September 2018 local high and just 6.21 percent annualized from the January 2018 local high. The upshot here is all about the price points of your buys. We just can't see how buying the indices at today's levels is going to make you much money over the next, say ten years...The S&P500 is up an annualized 12.70 percent since President Trump took office versus an annualized 13.83 percent return for President Obama's entire two terms."
Inside China's Plan to Become the World's Leading Economy -CNBC
"China is on the cusp of keeping a big promise - a vow to double its GDP and income in a decade and take the country to the forefront of the global economic power structure....The country now seems on a inexorable path to No. 1. China has climbed to No. 2 in the world, with a GDP of $13.1 trillion that, while still trailing the U.S., keeps getting closer. Forecasters expect that growth just north of 6% in 2020 will get to the stated goal of doubling the economy from 2011-20....Growth peaked at 14.2% in 2007 but has declined to below 7% annually each year since 2015, according to World Bank figures....'Going forward, China is going to continue to be very competitive,' said Michael Yoshikami, founder of Destination Wealth Management. 'China is still going to be a global player. But it's a matter of managing expectations relative to what you think is going to happen.' 'The average person believes that the trade tariffs are hurting,' Yoshikami said. 'Inflation is up. The cost of basic foodstuffs has gone up 10% to 15%. The cost of pork has gone up 100%. So you literally have people changing their diet because they simply can't afford the product anymore.'....But for Yoshikami, the picture is still a bit cloudy as some of the more immediate issues remain largely unresolved. 'Investing in China is a dangerous game, because they are in between being an emerging market and a developed market,' he said. 'I'm not sure the valuation is worth it at this point.'"
President Trump Is Impeached. Or Is He? -Dershowitz/Wall Street Journal
"Suddenly, impeachment can wait. Speaker Nancy Pelosi said Thursday she'll delay transmitting the two House-approved articles to the Senate, in an obvious ploy for partisan advantage. For anti-Trump legal scholars Noah Feldman and Laurence Tribe, that has created a Schrodinger's Cat scenario. They disagree on whether President Trump has been impeached at all. Mr. Feldman says no: 'If the House does not communicate its impeachment to the Senate, it hasn't actually impeached the president.' Mr. Tribe says an affirmative vote on an article of impeachment is sufficient to impeach - but he also claims it's proper to leave it at that. By declining to transmit the articles of impeachment, he argued in an op-ed that Mrs. Pelosi evidently found persuasive, the Democrats would get a win-win. Mr. Trump would carry the stigma of impeachment and be denied the opportunity to erase it via acquittal. Messrs. Feldman and Tribe are both wrong. Mr. Tribe errs in asserting that the House can deny an impeached official a trial. Mr. Feldman errs in denying that the approval of articles of impeachment is sufficient to constitute an impeachment. The Senate need not wait for the articles to be 'transmitted.' The Constitution grants the House the 'sole power of impeachment,' and the Senate the 'sole power to try all impeachments.' Now that the House's job is done, it is up to the Senate to schedule a trial and make the rules for it. My view - which I suspect much of the public shares - is that Mr. Trump was impeached by a partisan vote and deserves to be acquitted by a partisan vote. The representatives who impeached him along party lines after devising partisan rules of inquiry have no principled argument against a party-line acquittal."
12.20.19 - Crazy Won't Beat Trump -Noonan/WSJ
Gold last traded at $1,479 an ounce. Silver at $17.16 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Friday on a firmer dollar. U.S. stocks reached fresh record highs as investors perceived the year ending with easing geopolitical risks.
The Worst Global Depression is Nigh -Gold Switzerland
"Here we are at the end of the second decade of this century. In the last twenty years we have seen the collapse of a tech bubble and we have experienced the implosion of fake debt aka (also known as) the sub prime debt collapse...But I doubt they will be third time lucky. This time, printing unlimited free money will be recognized for what it is, namely Modern Money Trickery that can't fool the world a third time in the 2000s. The effect of that will be that buying the dips will fail this time because stocks will soon start their journey to the bottom which is likely to be at least a 75% fall but more probably a 95% fall in real terms....Fundamentally and technically we are now at the end of the end of this incredible bull market. It is ending with a bang and does not have far to go. The market could top at any time between the second half of December and first half of January....The world will soon experience the start of the most dramatic bear market in history. It could start slowly but is more likely to quickly accelerate to ever lower lows with the normal fake-out rallies that will suck investors in before the next leg down. When stocks turn down, precious metals will surge. Gold is already up 15-20% in 2019 depending on the currency...Once the metals turn up, silver will be gold on steroids. The gold silver ratio will start crashing from 87 currently down to 30 initially where it was in 2011. This means that silver will go up three times as fast as gold....So 2020 seems to be the very early beginnings of the worst global depression that the world has ever experienced. It will be devastating for everybody. We can all prepare financially by holding some physical gold and silver which is the best insurance anyone can buy against what is coming."
The Strongest Seasonal-Advance In Precious Metals Begins Now -Zero Hedge
"The turn of the year will soon be here - an occasion to review the past year and make plans for the new one. Many people are doing just that - and their behavior is creating the strongest seasonal rally in the precious metals markets. First let us look at the seasonal chart of silver. The chart shows the average moves in silver prices in the course of a calendar year over the past 69 years. The horizontal axis shows the time of the year, the vertical axis depicts price information. With the help of this chart, seasonal trends can be identified at a glance. As the chart illustrates, on average silver tends to post the by far strongest price gains early in the year until peaking close to the end of February. This rapid advance actually begins in mid December (blue arrow). Thereafter the price typically retreats again. Thus silver makes a move in excess of its total annual seasonal gain over the coming two months! The strong seasonal advance is very likely driven by purchases from the manufacturing industry. Many industrial silver processors/users place the bulk of their purchase orders at the beginning of the new financial year once annual planning has been completed and new orders can be booked."
One Nation Tracked, Zero Privacy -New York Times
"Every minute of every day, everywhere on the planet, dozens of companies - largely unregulated, little scrutinized - are logging the movements of tens of millions of people with mobile phones and storing the information in gigantic data files. The Times Privacy Project obtained one such file, by far the largest and most sensitive ever to be reviewed by journalists. It holds more than 50 billion location pings from the phones of more than 12 million Americans as they moved through several major cities, including Washington, New York, San Francisco and Los Angeles....After spending months sifting through the data, tracking the movements of people across the country and speaking with dozens of data companies, technologists, lawyers and academics who study this field, we feel the same sense of alarm....It doesn't take much imagination to conjure the powers such always-on surveillance can provide an authoritarian regime like China's. Within America's own representative democracy, citizens would surely rise up in outrage if the government attempted to mandate that every person above the age of 12 carry a tracking device that revealed their location 24 hours a day. Yet, in the decade since Apple's App Store was created, Americans have, app by app, consented to just such a system run by private companies....Today, it's perfectly legal to collect and sell all this information. In the United States, as in most of the world, no federal law limits what has become a vast and lucrative trade in human tracking....The companies profiting from our every move can't be expected to voluntarily limit their practices. Congress has to step in to protect Americans' needs as consumers and rights as citizens. Until then, one thing is certain: We are living in the world's most advanced surveillance system. This system wasn't created deliberately...The greatest trick technology companies ever played was persuading society to surveil itself."
Crazy Won't Beat Trump -Noonan/Wall Street Journal
"The Democrats think they've just had a big triumph. The president's been impeached. But Republicans see themselves as gaining the upper hand. The House couldn't lift the event into an air of historical gravity. They dressed in dark clothes and never smiled, as at a wake, but the deceased was making kicking sounds from the casket and appeared to be tweeting, so it was incongruous. The revealing moment was when Speaker Nancy Pelosi announced the first article had passed and some Democrats apparently began to clap....What felt like news came the day after, when Senate Majority Leader Mitch McConnell, who throughout the crisis had been relatively quiet and oblique, and who is never interesting by accident, suddenly became fiery. 'The Senate exists for moments like this,' he said, rather menacingly. 'Transient passion and violent factionalism' have swept the House....A Quinnipiac poll this week shows support for President Trump's impeachment and removal from office has gone down since October, to 45%....Here is how the Democratic party's lurch left has improved the president's position. It makes the 2020 race not 'Trump vs. the Democrat,' a race he can lose, but 'Trump vs. Lefty Madness,' which he can win. The left is turning Donald Trump into a savior. He was not a savior before AOC. He was not a savior before Elizabeth and Bernie said they'd ban your health insurance. But the past year has allowed the president's supporters, and independents, to see him that way....After so disastrously branding their party throughout 2019, is it possible for Democrats to turn it around in 2020?"
12.19.19 - This Impeachment Folly -WSJ
Gold last traded at $1,484 an ounce. Silver at $17.14 an ounce.
NEWS SUMMARY: Precious metal prices inched up Thursday in quiet, pre-holiday week trading. U.S. stocks rose as investors looked past the news of President Trump's impeachment as well as mixed U.S. economic data.
Gold edges up after Trump’s impeachment, as traders await details on China-U.S. trade pact -Marketwatch
"Gold prices climb on Thursday in the wake of President Donald Trump's impeachment by the U.S. House of Representatives, but price moves are modest as benchmark bond yields push higher amid an easing of U.S.-China trade tensions. 'The gold market has lacked definitive direction this week as safe haven issues have been moderated at the same time that some signs of demand have surfaced, thereby limiting the market in both directions,' analysts at Zaner Metals wrote in daily note. 'Certainly, the potential for flight to quality buying from the U.S. impeachment remains in play'....Some gold bulls say that bullion's price has been kept afloat due to some lingering anxieties around a trade deal between Beijing and Washington which has been announced but hasn't been signed by the parties yet...'There’s a sense of nervousness and impatience among investors as until the agreement has been signed and sealed, the risk that the deal could still fall through will persist,' wrote Raffi Boyadjian, senior investment analyst at brokerage XM."
This Impeachment Folly -Wall Street Journal
"House Democrats voted Wednesday evening to impeach Donald Trump but, media high-fives aside, what have they accomplished? They have failed to persuade the country; they have set a new, low standard for impeaching a President; Mr. Trump will be acquitted in the Senate; and Democrats may have helped Mr. Trump win re-election. Congratulations to The Resistance. Democrats Nancy Pelosi and Jerrold Nadler have said in the past that impeachment must be bipartisan to be credible, and they have achieved their goal - against impeachment....On the substance, Democrats have taken an episode of Mr. Trump's reckless foreign-policy judgment and distorted it into broad claims of bribery and extortion. The evidence of weakness is that their own articles of impeachment include no allegations of specific crimes. Instead they watered them down to 'abuse of power' and obstruction of Congress....Democrats are impeaching Mr. Trump not for Ukraine, but because they believe he is simply unfit to be President...Where is that in the Constitution?....As for the politics, Mr. Trump is now likely to be the first impeached President to run for re-election. Democrats clearly hope the Scarlet 'I' will work against him, but Mr. Trump will tout the partisan vote as illegitimate and his Senate acquittal as vindication.... If Mr. Trump wins re-election, the folly of this impeachment will be a major reason."
Trump's China deal won't win many voters -Yahoo Finance
"President Trump called his new trade deal with China 'tremendous' and 'phenomenal.' It's not. The '“phase one' deal - still not finalized - may reduce the threat of new tariffs and other protectionist measures that hurt economic growth. But it leaves in place most of the new tariffs Trump has imposed on Chinese imports....China has been cagey about what it actually agreed to, and may never ramp up purchases of U.S. food, energy and other exports to the record levels Trump's negotiators promised. A key factor here is how much China wants to help Trump get reelected in 2020. If they'd prefer to roll the dice on a Democratic successor, they could string Trump along, do the bare minimum and then do something to embarrass Trump next fall, right before the election....Oxford Economics warned clients in mid-December that 'trade war re-escalation is a key market threat.' The forecasting firm pointed out there have been several other instances when apparent breakthroughs evaporated, and both sides retaliated with tougher trade impediments. 'Equity markets appear particularly vulnerable,' the forecasters wrote, arguing that investors have not priced in the substantial risk of another impasse. As a candidate in 2016, Trump said he'd go after China in order to bring back jobs that have left the United States. There's no sign that will ever happen."
All tulips must wilt -Techcrunch
"It's a bad day in the world of cryptocurrency. After recovering some during the summer, the value of bitcoin and other cryptocurrencies are sharply down over the last several weeks. Looking back a month, bitcoin was worth around $8,500 a coin. Today it's worth nearly $2,000 less. None of this will phase bitcoin advocates. Peruse any crypto-focused forum and the narrative you'll find is that bitcoin is merely on sale for a minute, and will rise again later. That may be true! Even if the impending 2020 halvening may not have a bullish impact. As 2019 comes to a close, however, things aren't super great for bitcoin and its friends. And thus in the immortal words of The Alan Parsons Project: What goes up must come down, What must rise must fall, And what goes on in your life, Is writing on the wall!"
12.18.19 - Gold Headed to Biggest Rise in 9 Years
Gold last traded at $1,479 an ounce. Silver at $17.00 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday amid political and economic uncertainty. U.S. stocks traded slightly higher despite disappointing FedEx earnings, ahead of Trump impeachment vote.
Gold prices look to post biggest annual rise in 9 years -Marketwatch
"Gold prices look to end the year more than 15% higher, on track to post their biggest annual climb in nine years. 'Gold has seen considerable safe haven buying from investors concerned [over] low and negative yields in the bond market and fearing a possible downturn in equities,' said George Milling-Stanley, chief gold strategist at State Street Global Advisors. Gold exchange-traded funds have also been 'feeling the benefit of strategic asset allocation type buying by institutions and individuals.' 'Ongoing uncertainties, both macroeconomic and geopolitical have provided support for both types of buying,' he said....Helped by Federal Reserve Chairman Jerome Powell saying in June that he would 'make a mid-cycle adjustment and give the markets the interest rate cut they had been clamoring for, gold rapidly rose to over $1,550 an ounce by September,' said Milling-Stanley....In the decade from early 2001 to late 2010, prices for the metal climbed from $250 an ounce to $1,250 an ounce, for an 'average gain of $100 per year,' said Milling-Stanley...'Speculative activity' drove prices up by $500 in just nine months in 2011, then as that speculative interest waned, gold prices fell back to the $1,250 level in the spring of 2013....Milling-Stanley said it's 'possible' for gold to see similar moves to the ones it's seen in the past decade."
'Say a PRAYER': Trump pleads innocence hours before impeachment -Politico
"Donald Trump began one of the most consequential days of his presidency with a national call to worship, again pleading absolute innocence and urging Americans to turn to their faith ahead of his imminent impeachment by the House of Representatives. 'Can you believe that I will be impeached today by the Radical Left, Do Nothing Democrats, AND I DID NOTHING WRONG!' Trump tweeted Tuesday. 'A terrible Thing. Read the Transcripts. This should never happen to another President again. Say a PRAYER!' The president's post came less than two hours before lawmakers were scheduled to convene and begin the day’s historic proceedings. A full House vote on articles accusing Trump of abusing his office and obstructing Congress is expected to take place in the evening hours and fall sharply along party lines, making Trump the third U.S. president ever to face the chamber's ultimate punishment. Trump will likely be addressing a 'Keep America Great Rally' in Battle Creek, Michigan, when the House approves the charges against him....'I think what we're seeing today is a culmination of what the Democrats' obsession with impeaching this president has come to,' Rep. Doug Collins said on 'Fox & Friends,' adding that his colleagues on the other side of the aisle are 'infatuated with impeding this president, and impeachment is the only way they feel they can do it.' 'It's a sad day. It's a tragic day,' Rep. Liz Cheney, the third-ranking House Republican lawmaker, also told Fox News. 'And I think the Democrats have got to understand the danger that they're creating here and the damage they're doing to the Constitution and to the republic.'
Euphoria sweeps across Wall Street. How long will it last? -CNN Business
"What a difference a year makes. Last year, recession fears set off Wall Street's worst December since the Great Depression. Now, US stocks are capping off a blockbuster year with yet another dose of extreme optimism....Recession fears have receded for three primary reasons: The US-China trade war is cooling off, the global economy is showing hints of bottoming and central banks are coming to the rescue with easy money....The CNN Business Fear & Greed Index is flashing 'extreme greed,' a reversal from the 'extreme fear' gripping markets a year ago. The gauge of market sentiment is nearing the highest levels of the past three years....Of course, there is no guarantee this newfound optimism will prove correct. Just as recent recession fears were overdone, this bullishness may be exaggerated...the tech sector is now sporting the highest price-to-earnings ratio since November 2007, according to Bespoke Investment Group....The Fed is injecting vast amounts of money into the financial system. The Fed's purchases of Treasury bills, aimed at easing stress in the overnight lending market, has ballooned the size of its balance sheet by more than $300 billion since early September...'Such liquidity is pumping up financial valuations,' Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, wrote in a note on Monday. But the Fed can't inject cash into the system forever. Shalett, who flagged the potentially 'dangerous dynamics' of the Fed moves, expects the balance sheet expansion to end in the first quarter. At which point, the market will be flying solo."
China won't rush into agriculture purchases under phase one deal -South China Morning News
"Chinese buying of American farm products will be determined by how competitive they are, and not just by estimates laid out in an initial trade accord, according to a US government trade adviser. While China has pledged to buy at least US$80 billion in US produce in the next two years, according to US Trade Representative Robert Lighthizer, purchases probably will be attuned to market conditions, said Tom Kehoe, an adviser to the US Department of Agriculture and Lighthizer. 'These are businesspeople,' Kehoe said. 'They are going to have to be in a competitive situation. Otherwise, they are not going to buy it.' Kehoe’s comments underline the ongoing challenges for US growers competing in crop markets with products from Brazil and Argentina, where currencies have weakened against the US dollar....'There are safeguards built in [for both countries] to live up to what they’ve promised,' and those details will be released in the 'next few days', he said. 'Pretty much all [agriculture] markets are involved: most of the grains, beans, pork, some seafood.'"
12.17.19 - $1,700 Gold by March -Forbes
Gold last traded at $1,481 an ounce. Silver at $17.08 an ounce.
NEWS SUMMARY: Precious metal prices consolidated Tuesday in preparation for the next leg upward. U.S. stocks traded mixed as investors digested trade issues and concerns about overbought stocks.
Gold Headed To $1,700 By March, Analysts Say -Forbes
"Get ready for a fast and sizable pop in gold prices. The cost of buying one troy ounce of the metal will likely rise by around 15% over the next couple of months, analysts say. The reason gets to the heart of how prices of financial assets move over time. They go up, and they go down in somewhat predictable patterns, at least for those who know. In the case of gold, the price fell from $1,546 a troy ounce in September down to $1,455 on November 12...Since then, the gold price has mostly moved broadly sideways, but is now beginning to turn upwards once again and should continue to rally over the next few weeks. 'Gold got very overbought into late August / early September, and since then it corrected its overbought reading,' states a recent report from Wolfe Research by John Roque and his colleague Rob Ginsburg. In this case, the two authors say the 'turn' is on, and the next short-term move will likely see a surge of around 15% over the next 75 days or so....If history is a guide, then expect gold prices to rally 14% to $1,679 an ounce by the end of February."
You call this a trade deal? -Tonelson/Marketwatch
"Phase One deal with China fails 'The Art of the Deal' test. OK, let's assume that something deserving the name 'U.S.-China trade deal' has been reached - even one dubbed 'Phase One' or 'preliminary.' Deep doubts would remain justified about whether it can possibly serve American interests....No useful accounts have been released of what China will actually buy from the United States (though it's interesting that President Donald Trump has included manufactures on the list - not simply agricultural products and other commodities), and by when the Chinese will buy these goods. Special bonus - shortly after noon, the President said he 'thinks' China will hit $50 billion in U.S. agriculture imports. Over what time period? Heaven only knows...There's absolutely nothing from the administration so far about 'structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.'....If the United States is not recognized as sole judge, jury, and court of appeals when dealing with Chinese compliance, history teaches that will be the case that the agreement literally will be worthless....In short, this is no time for Trump to reach any deal with China - whatever phase it's called. In fact, it's the time for the president to keep the pressure on."
The Global Economy's Luck May Run Out -El-Erian/Project Syndicate
"This year is ending on a relatively positive note, especially when compared to the same time last year. There is hope of a global growth pickup, trade tensions have lessened, and central banks have reaffirmed that that they will maintain ultra-low interest rates and continue to provide ample liquidity. Financial volatility is subdued, and there are reasonable expectations of solid investor returns across many asset classes. As tempting as it is to dwell on current financial and macroeconomic conditions, doing so risks obfuscating a key element in the outlook for the future. There is a curious contrast between the relative clarity of expectations for the near term and the murkiness and uncertainty that comes when one extends the horizon further - say, to the next five years. Many countries are facing structural uncertainties that could have far-reaching, systemic implications for markets and the global economy....The US is entering a tense and divisive election year. Germany, Italy, and Spain are in the midst of difficult political transitions. The EU is dealing with Brexit and other regional divisions. And China's government is trying to consolidate power in the face of slowing growth and continuing protests in Hong Kong. The main worry - one that too few market participants have spotted - is that over the next five years, global economic and market conditions may need to deteriorate nearer to crisis levels before national, regional, and multilateral political systems muster an adequate response. Fortunately, we are now in a period when action could be taken to prevent the worst-case scenario from becoming a binding reality."
Morgan Stanley: It's Fair To Say The Market Rally Is Due To The Fed's QE4 -Zero Hedge
"Morgan Stanley's Michael Wilson, who in 2018 was the most bearish and accurate of all sellside analysts, fought the Fed in 2019 and the Fed won. One week ago we quoted from Wilson's latest weekly report, in which the now quasi-bullish strategist explained why he had grudgingly turned bullish, saying 'we continue to see the 3 largest central banks in the world expand their balance sheets at the rate of $100B per month ($60B from the Fed, $25B from the ECB and $15B from the BOJ).'....'It's fair to say that [the rally] may be more due to the balance sheet reversal [i.e. 'NOT QE', also i.e., QE 4] than fundamentals since the real signs of bottoming have come from international PMIs rather than the US,' says Wilsom. Having identified the culprit behind the move, Wilson then echoes BofA's Hartnett who as a reminder expects the S&P to hit 3,333 by March 3, saying that the meltup is likely to continue 'with the Fed scheduled to keep expanding its balance sheet by $60B /month through the first quarter' which the MS strategist concludes is 'a powerful positive force that can take stocks well above fair value between now and then.' And 'then' what? Actually ignore that: the real question is just what is the 'fair value' of stocks when one strips away not just QE4, but also QE3, QE2, QE1, and trillions in QE from other central banks. Luckily, the market will be permanently halted long before we will ever find out."
12.16.19 - Negative Interest Rates: The New Normal?
Gold last traded at $1,481 an ounce. Silver at $17.04 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Monday. U.S. stocks rose after the so-called U.S.-China 'phase one' trade deal clears the path for higher stock prices.
Gold stable as investors assess U.S.-China trade deal -Marketwatch
"President Donald Trump and Chinese officials on Friday announced an agreement on a preliminary U.S.-China trade pact. Gold gained ground in Friday's session, however, boosted by a weaker U.S. dollar and a fall in Treasury yields...However, analysts said a lack of detail and other uncertainties could allow gold to find haven-related interest, driving prices higher. 'I do think the bulk of the negative news for gold might be finally out of the way, and the markets seem to be positioning for any disappointment on the U.S.-China trade developments if and when China responds; this could add 1-2% of the upside for gold from current levels,' said Stephen Innes, chief Asia market strategist at AxiTrader, in a note."
Negative Interest Rates Could Be the New Normal -Bonner/Bonner And Partners
"Every generation has its fads and follies… which it takes for Eternal Truth. Diversity… climate change… and a 2% inflation target top today's list. Early adopters believe they are 'progressive.'...They think of themselves as the cutting-edge, liberal-minded innovators that move society forward. And then the next generation laughs at them. TIME magazine has just named Greta Thunberg its Person of the Year. Ms. Thunberg thinks she knows what temperature the Earth should be...As to what the Earth's climate should be, we have no opinion....The financial world, too, has its own claptrap. Central bankers and economists think they know what the consumer price inflation rate should be: 2%. Why 2%? There's no evidence that 2% is better than 3% or that 3% is worse than zero....But let us move along and pause to gawk at another marvel: negative rates. In this Brave New World, many economists think they not only 'make sense,' but that the situation requires them. When savers have to pay for the privilege, they reason, they'll stop hoarding money and begin spending it. Then, the economy will grow faster, people will have jobs, incomes will rise, profits will go up… and we'll all be richer. Our jaw drops open… our breathing stops. Imagine all those generations of idiots that went before us...If they had only known. We shudder to think how much richer they could have been if they had spent all their money rather than saved it...And here's another big plus for negative interest rates: They turn debt into an asset...'The borrower is servant to the lender,' it says in the Bible. But now, with these new miracles of modern finance, it's the lender who must brew the debtor's tea and empty his chamber pot. Negative interest rates? Bring 'em on! Soaring debt? No problem! A debt crisis? Forgetaboutit."
The US-China trade deal leaves a large American deficit and a permanent collision course -CNBC
"Looking at the latest U.S.-China trade numbers, one wonders how the agreement announced last week could lead to an acceptable balance of bilateral trade accounts. China'’s surplus on its U.S. goods trade in the first ten months of this year was $294.5 billion, and amounted to 40% of America's total trade gap. During the same period, Beijing slashed U.S. exports to China 14.5% to $87.6 billion. By contrast, Chinese goods sales to the U.S. were more than four times larger at $382.1 billion. In spite of that, reports indicate that Beijing promised to increase - over the next two years - its purchases of U.S. goods and services by $200 billion....The sad truth is that the U.S. will continue to run huge wealth (and technology) transfers to China financed by America's increasing net foreign debt that will show as net foreign assets on China's books. Other big issues - such as intellectual property protection, forced technology transfers, illegal industry subsidies and exchange-rate management - are appearing as declaratory statements rather than clearly defined legal arguments. It is obvious that political expediency took precedence over an agreement to close the U.S. trade gap with China as a matter of American national security....Investors should watch trade numbers for reliable signs of the real value of last week's agreement."
5G 'can spy on you': Tech will watch you at home -Daily Star
"An inventor has sensationally claimed that 5G technology can be abused to spy on people in their own homes – listening in on conversations and even watching people in the bath. The state-of-the-art technology could revolutionize the speed of mobile phones when it is eventually rolled out. Mark Steele...believes local councils installing the masts are ignorant to the threat they put people under. In an interview with Daily Star Online, the patent writer said 5G waves are the same ones used by self-driving cars and therefore street lights fitted with 5G technology are 'scanners'....Explaining more how he believes microwaves can be abused with 5G, Mark added: 'If you've got Wi-Fi in your home what actually happens is that you have actually got microwave radiation in the environment and I can scan that environment and any disturbance in those microwaves, I can pick that up and I can actually turn that and a digitalization of that into voice recognition....Mark - who acts as a technical advisor to anti-5G group saveusnow.org.uk - has also claimed that he is afraid the waves are damaging to human health."
12.13.19 - Gold Headed to $2,500-$3,000/oz ?
Gold last traded at $1,481 an ounce. Silver at $17.01 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying despite a stronger dollar. U.S. stocks fell after China and the U.S. agreed to a phase-one trade deal but investors were skeptical of the outcome.
Gold is going to $2,500, $3,000 an ounce: investment expert -Yahoo Finance
"Wealthy people are stocking up on physical gold, as in bullion, coins and bars, according to a recent note from Goldman Sachs. As a result investors who are bullish on gold say it’s the precious metal’s moment to shine. 'I think gold's going to $2,500, $3,000 an ounce in the 2020s because the climate - the landscape for gold is so hugely supportive,' Paul Schatz, Heritage Capital president, told Yahoo Finance's On The Move....What's interesting this cycle is that it's not just gold ETFs and other abstract investments driving demand for gold but rather people buying actual gold bullion. 'Physical gold seems to really be in... and basically it sounds like rich people are hoarding physical gold, the bullion itself,' said Yahoo Finance's Myles Udland, co-anchor of The Final Round and co-author of Morning Brief...I just think end of the world trades are fun, and it seems like the global rich want the actual thing,' he added. According to Schatz, 'an individual investor should have 5% to 10% in some capacity in precious metals. People who don't trust the markets, don't trust paper will want to buy gold coins."
China Says Deal Agreed, U.S. to Roll Back Tariffs in Stages -Bloomberg
"China and the U.S. agreed on the text of a phase one trade deal that includes the removal of tariffs on Chinese goods in stages, Vice Commerce Minister Wang Shouwen said, as President Donald Trump confirmed that some levies will be reduced and said the next round of talks will start immediately. China will increase imports from the U.S. and other countries, Wang said at a briefing in Beijing Friday. Vice Chairman of the National Reform and Development Commission Ning Jizhe added that the specifics of agricultural purchases would be released later, as the text of the agreement is still under review. The comments were China's first response to a deal signed off by Trump on Thursday that would halt higher tariffs planned for Dec. 15 and represent the first phase in defusing the trade war that’s shaken the global economy....Unfolding along with the trade news on Friday was the House Judiciary Committee's recommendation to impeach Trump."
Stocks, Yuan, Bond Yields Are All Tumbling As Lack Of China Deal Details Worries Traders -Zero Hedge
"A total lack of detail (and growing confusion) at the contents of the phase one US-China trade deal has traders spooked. The Dow is at the lows of the day...Yuan has erased all of yesterday's gains...And Treasuries have erased all of yesterday's losses...Additionally, all ags are dumping as China refused to provide any detail on the size of purchases...It's hardly a surprise, but Axios's Jonathan Swan reports that President Trump specifically objects to the detail in the WSJ story claiming that the US would rollback existing tariffs by half. Allowing such generous rollbacks would sacrifice a lot of leverage for the next round of talks...and neither Trump nor President Xi want to look weak. President Trump just poured cold water on the brightest aspect of his shiny new (reported) trade deal by dismissing claims that prior tariffs will be rolled-back as reported by WSJ yesterday."
Who Can Beat Trump? -Noonan/Wall Street Journal
"Impeachment is a reality show going on in Washington, and everyone knows the outcome, so it's not even interesting. On my way to Waterloo I realized: We're about to have the third impeachment of a president in American history, and the day it happens it's not going to be Topic A in America. It will barely be mentioned at the dinner table. It is a coastal elite story, not a mainland story. The Democratic race is as fluid as it looks. No one, even bright party professionals speaking off the record, knows what to expect. Biden was inevitable, then maybe Elizabeth, maybe Pete's inevitable, but Bernie may be inevitable, and don't write off Joe. But 'Beat Trump' is back. When 2019 began Democrats were thinking that was priority No. 1. Then other things became more important - Medicare for All, climate change, policy. But it feels like Democrats here are circling back to their original desire. 'Who can beat Trump?' is again the most important question. They don't know the answer. They're trying to figure it out....How difficult will it be to beat Mr. Trump? While I was in Iowa the new jobs numbers came out. America has functional full employment. It is a marvelous thing. We're not in any new wars. With peace and prosperity, how can the incumbent lose? The counterargument is that his approval is stuck in the low 40s with peace and prosperity, which tells you everything - he is vulnerable, more than half the country rejects him in what are for him ideal circumstances."
12.12.19 - How to Get Americans to Love Capitalism
Gold last traded at $1,471 an ounce. Silver at $16.89 an ounce.
NEWS SUMMARY: Precious metal prices eased back Thursday on profit-taking amid China trade deal progress. U.S. stocks jumped to all-time highs after President Trump said China and the U.S. were near a trade deal.
How high will gold go? Just watch the central banks -Kitco
"The gold market will be watching closely in 2020 for signs on whether the U.S. Federal Reserve and other major central banks will cut interest rates. As 2019 winds down, gold is up 14% for the year so far, helped in large part by three 25-basis-point rate cuts by the Fed. Spot metal was at $1,484.50 an ounce around mid-morning. A number of banks look for the metal to climb to $1,550 or reach $1,600 in 2020....'When the Fed started cutting rates, gold took off,' said Colin Cieszynski, chief market strategist at SIA Wealth Management. 'It was acting as a hard currency and people were starting to devalue the paper currencies. If the central banks continue to put in stimulus and devalue their currencies, that could be beneficial to gold.'....Suki Cooper, precious-metals analyst with Standard Chartered, was upbeat about precious metals and gold in particular....A large amount of negative-yielding debt around the world creates a favorable backdrop for gold, she said. Standard Chartered looks for the Fed to remain on hold with rates in 2020. Several major banks look for gold to top $1,600. ABN AMRO forecast gold to pull back early in the year, then to bounce as the economy slows in the second half....Cooper expects central-bank buying of gold to remain robust...Chinese demand is expected to improve, she said."
Americans’ Credit Card Debt Poised to Reach 10-Year High -Yahoo Finance
"Americans are projected to fall seriously behind on their credit card bills at the highest rate in a decade as banks push a record number of people to get plastic. The share of credit card borrowers who are at least 90 days past due on their accounts will probably tick up to 2.01% next year, the highest level since 2010, according to a forecast by TransUnion....As lenders sign up more people for credit cards, the newest borrowers are increasingly falling behind on their bills. Accounts opened in recent years have been souring at faster clips than prior years, suggesting that more new borrowers are struggling to keep up with their minimum payments. For instance, 5.4% of credit cards originated in 2018 were delinquent within nine months, up from 4.5% the year before."
U.S. Offers to Slash Existing Tariffs on China Imports and Cancel New Levies -Wall Street Journal
"U.S. negotiators have offered to slash existing tariffs by as much as half on roughly $360 billion of Chinese-made goods as well as to cancel a new round of levies set to take effect on Sunday, according to people briefed on the matter...President Trump wrote in a Tweet on Thursday morning: 'Getting VERY close to a BIG DEAL with China. They want it and so do we!' The tariff-reduction offer was made in the past five days or so, the people said, and in exchange, the U.S. side has demanded that Beijing make firm commitments to purchase large quantities of U.S. agricultural and other products, to better protect U.S. intellectual-property rights and to allow greater access to China's financial-services sector. Should China not carry out its pledges as part of the potential deal, the tariff rates would return to their original levels, a clause known in trade negotiations as a 'snapback' provision....Details of the new U.S. plan emerged as the clock runs out for the two sides to reach an agreement before 12:01 a.m. on Sunday - the date that President Trump has set for tariffs to increase on an additional $156 billion of Chinese goods...The new tariffs set for Dec. 15 would hit roughly $156 billion of imports from China of mobile phones, laptops, toys, clothing and other consumer products. Wary of what they regard as Beijing's poor record on following through on its pledges, U.S. negotiators led by Trade Representative Robert Lighthizer have asked China to commit in writing to some agricultural purchases up front and to agree to a detailed timeline for future purchases....Chinese negotiators led by Vice Premier Liu He have asked their counterparts to not only cancel the planned December tariffs but also to roll back existing levies - a demand that the U.S. had resisted until recently. 'The ball is in China's court now,' said one of the people briefed on the U.S. offer."
How to Get Americans to Love Capitalism Again -Paulson/Bowles/New York Times
"American capitalism is at a serious inflection point. Many Americans, including the two of us, are alarmed by enormous levels of inequality and by declining economic mobility. We are concerned that in many cases American markets are no longer the most competitive in the world. And, we worry that our country's long-term economic strength will slowly deteriorate because of an unsustainable fiscal trajectory that leaves future generations worse off. The solution is not to upend the system. A market-based economy, for all its flaws, is still the best way to achieve broad economic prosperity and to ensure that living standards continue to rise over time. But the answer is not to maintain the status quo, either. Radical change or complete inaction seem to be the only types of solutions that are being debated in today's marketplace of ideas....We see many excellent ideas that are ripe for bipartisan collaboration and that can begin the process of adapting our economic policies so that they work for far more people. First, we must aggressively invest in our human capital. That starts with addressing the supply side of the education market, including investments in community colleges....Universal basic income is not a viable solution...Instead, we should look at more targeted and efficient approaches to encouraging work by supplementing the wages of low- and middle-income Americans, such as expanding the earned -income tax credit or enacting a wage -subsidy program. Finally, we have to confront the uncomfortable truth that our country is on an unsustainable fiscal trajectory. Spending priorities such as education, infrastructure, and high-value research and development are underfunded, while our commitments to entitlements continue to rise indefinitely....Inequality undermines our economic strength and more Americans become disillusioned with the capitalist system that has made upward mobility a pillar of the country's identity since its founding."
12.11.19 - 80% Say Politics Biggest Stressor in Life
Gold last traded at $1,471 an ounce. Silver at $16.72 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks traded mixed as investors awaited the Federal Reserve’s latest decision on monetary policy.
Sell the Nasdaq and Buy Gold -Gold Switzerland
"Stock markets are at the end of the end of a secular bull market. The Nasdaq index has gone up 112X since 1973. Once this market turns, the fall can be very rapid. In 2000-2002, the Nasdaq fell 80%. It would be surprising if the coming fall is smaller than the last one. Thus a 95% fall would not be surprising....I am absolutely convinced that the situation today is worse than in 2000 and the bubbles are of course much bigger. Anyone holding onto Nasdaq stocks or any other stocks will see a total destruction of values and wealth in the next few years....When stock markets fall, precious metals will continue their secular bull market which initially started in 1971 with the last leg starting in 2000....The 20-year bull market that started in 2000 has only seen one year with a major correction which was in 2013....We have hardly started the move at this point. When the events I discuss in this article come into play, gold will move at a pace that will surprise everyone. We will see multiples of the current price before the current bull market ends. But remember that physical gold should not primarily be owned for capital appreciation purposes. Above all, we hold gold as the best protection against a rotten financial system and insurance against unprecedented financial, economic and political/geopolitical risk."
"We're Living On Borrowed Time..." -Taggard/Zero Hedge
"Here at PeakProsperity.com, my co-founder Chris Martenson and I have spilled a lot of ink in the ensuing years, warning how QE (aka central bank money printing), stock buybacks, and record low interest rates have pushed the degree of systemic unsustainability to Bizzaro-world levels....The vertical lines (in John Hussman's chart) indicate 'dispersions' which are market conditions Hussman finds are highly-correlated with 'steep and rather abrupt market plunges, often representing the first leg of a more extended collapse'."
"Notice how rarely they have occurred over the past 25 years, and yet they've suddenly increased in frequency of late (the most recent took place on Nov 20th). This is what you would expect to see from a dangerously over-extended system, where prices have been propelled way beyond where they can be sustainably supported. Keep in mind, today's all-time high prices are occurring at a time when: The global economy is in a pronounced slowdown, US corporations are in an earnings recession, The year-long US-China trade war will not be resolved anytime soon, The repo market is signalling something is badly broken in the banking system, Articles of impeachment are being drawn up against the sitting US President.....What we are experiencing right now is a 'time lag' between the collapse of the argument underlying the 10-year bull market and investors' recognition of that. A full decade and some $14 Trillion in newly-printed money later, plus the cheapest interest rates in recorded history, and yet the central banks have not been able to restore growth to the global economy. The experiment has failed....Whatever time we have left, and it may very not be much, is a gift. Use it."
Trade war: US-China deal deadline 'likely to be missed' -South China Morning Post
"A former US government trade official has warned that China and the United States are likely to miss a looming deadline to reach an agreement meant to pave the way for an end to their trade war. 'Both sides have said that they are very close, but I can tell you as a trade negotiator that the last mile is always the most difficult,' former acting deputy US trade representative Wendy Cutler said, speaking at China Conference....'What China is telling the United States is that it is not enough just to not go ahead with the December tariffs, but they also want to see some existing tariffs lifted.' Officials from the two sides are trying to conclude negotiations before Sunday, when the Office of the United States Trade Representative is set to impose 15 percent tariffs on a further US$156 billion worth of Chinese imports if an interim deal is not reached beforehand. US Commerce Secretary Wilbur Ross repeated the warning last week."
8 In 10 Americans Say Politics Are Biggest Source Of Stress In Life -Study Finds
"U.S. politics have never felt quite as contemptuous, and unavoidable, as they do today. We're a nation of people who are constantly plugged in, whether that be via smartphone, desktop, or regular old cable news....Now, a new survey of 2,000 Americans finds that all of this vitriol filled political discourse is taking a serious mental toll. An astounding 78% of respondents say politics are the number one source of anxiety and stress in their life. The survey, commissioned by LIFEAID Beverage Co., also identified on-the-job worries (51%), and financial matters (51%) as other common factors stressing Americans out. Another major stressor for many is health and medical issues (37%), and 25% say their commute to work each day is a stressful nightmare. Surprisingly, 37% of respondents listed their own partner as a big source of personal anxiety and stress. Other frequently cited stressors included social media (29%) and climate change (32%). All of that stress is complicating other aspects of life, as well, with two-thirds (67%) of respondents admitting their constant anxiety is causing them to be less productive at work....For many Americans, their stress levels have never been higher. In all, 68% say they've never felt more stressed than they do today. More over, 67% say they can't realistically say their stress will go away any time soon."
12.10.19 - Super Rich Hoarding Physical Gold
Gold last traded at $1,468 an ounce. Silver at $16.72 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on upbeat 2020 forecasts and a weaker dollar. U.S. stocks traded mixed as investors were skeptical the U.S. could postpone the implementation of additional levies on Chinese goods.
The world's super-rich are hoarding physical gold -Yahoo Finance
"Gold has had a great run in 2019. Over the last year, gold prices are up nearly 20%. The yellow metal is on pace for its best year since 2010....In a note to clients published over the weekend, analysts at Goldman Sachs outlined why the strategic case for owning gold remains strong. The firm cites political uncertainty and recession fears that are unlikely to abate as primary catalysts, among other worries among the global elite like wealth taxes and increasing talk about MMT and central bank effectiveness. By 2020, the firm thinks the price of gold will reach $1,600 an ounce; on Monday, gold was trading near $1,460....'Political risks, in our view, help explain this because if an individual is trying to minimize the risks of sanctions or wealth taxes, then buying physical gold bars and storing them in a vault, where it is more difficult for governments to reach them, makes sense.' 'Finally, this build can also reflect hedges by global high net worth individuals against tail economic and political risk scenarios in which they do not want to have any financial entity intermediating their gold positions due to the counter-party credit risk involved.'"
"They've Effectively Lost Control Of The System" -Williams/Zero Hedge
"Economist John Williams says don't put too much faith in the good employment numbers that came out last week because 'It's not as happy of a picture as it looks.' Williams is the founder of ShadowStats.com. His calculations strip out government accounting gimmicks to give a more accurate picture of economic data. Williams explains, 'What the Fed has done with their easing is they created a circumstance of sustainable moderate economic growth. So, they don't need to cut rates anymore. That's nonsense. You don't have sustainable moderate growth. For example, look at this last month, industrial production is in a state of collapse... Manufacturing is negative... Oil production is collapsing year to year as oil and gas exploration has plunged. . . . Retail sales have been overstated in employment... That's going to be revised lower... We have been getting better numbers as of late, and the economy is still falling off a cliff.' Maybe that explains the Fed's panic moves with $60 billion a month QE, which it says is not QE, and extreme intervention in the repo market where the Fed routinely pumps out tens of billions of dollars in liquidity a night. Williams says, 'The system is not stable, and it probably is insolvent...' So, the Fed is pumping out billions of dollars every month, and yet, the economy keeps sinking. What does this tell Williams? 'The system is not operating properly. These are stopgap measures, stopgap liquidity that the Fed is putting into the system. If they understood what was going on, they would not be doing that. They wouldn't have to do it. They have lost control of the system effectively,' says Williams."
House Democrats Announce Two Articles of Impeachment Against Trump -Wall Street Journal
"The House Judiciary Committee will pursue two articles of impeachment against President Trump, focused on his effort to push Ukraine to announce an investigation of a political rival and lack of cooperation in the subsequent investigation...The first article is on abuse of power. Democrats allege that Mr. Trump took advantage of his position as president to pressure Kyiv to investigate a political rival. The second article is on obstruction of Congress, related to the president's moves to block aides from participating in the impeachment investigation....Should the committee vote to send the articles to the House floor, they are subject to immediate consideration and require a simple majority to pass. The House votes would be expected to fall largely along party lines and would move the case to the Senate for a trial, likely beginning in January. A two-thirds Senate majority would be necessary to convict Mr. Trump, and politicians from both parties believe that is unlikely....Republicans reacted with anger following Democrats' announcement on Tuesday, saying that Democrats hadn't made their case and were simply trying to overturn the 2016 election....The White House would like a trial to begin right away and has made that point clear on Capitol Hill, a person familiar with White House thinking said."
Paul Volcker, at 91, Sees 'a Hell of a Mess in Every Direction' -New York Times
"'There is no force on earth that can stand up effectively, year after year, against the thousands of individuals and hundreds of millions of dollars in the Washington swamp aimed at influencing the legislative and electoral process,' he wrote in his book, 'Keeping at It: The Quest for Sound Money and Good Government.'....The book is not limited to tales of the past, however. It addresses current policy, like the 2 percent inflation target that has become the goal of the Federal Reserve. 'I puzzle at the rationale,' he wrote. 'A 2 percent target, or limit, was not in my textbook years ago. I know of no theoretical justification.' With a laugh, he told me that he believed the policy was driven by fears of deflation. 'And we haven't had any deflation in this country for 90 years!' But there is something more worrisome affecting policy than fear, he told me. Money. 'The central issue is we're developing into a plutocracy,' he told me. 'We've got an enormous number of enormously rich people that have convinced themselves that they're rich because they're smart and constructive."
12.9.19 - 2020: Goldman Sachs Sees Gold Soaring 9%
Gold last traded at $1,466 an ounce. Silver at $16.66 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on a weaker dollar and an equity market pause. U.S. stocks traded mixed as investors awaited news on impending U.S.-China trade tariffs.
Goldman Sachs sees gold soaring 9% in 2020 -Business Insider
"The price of gold could jump 9% to $1,600 per ounce by the end of March, according to Goldman Sachs. The investment bank stood by its three-month, six-month, and 12-month forecasts in a research note last week. It highlighted as factors underpinning the price: political uncertainty, recession fears, high household savings, low interest rates, an equities selloff, growth of emerging markets, moderate growth in mine output, robust central-bank purchases, and greater discussion of Modern Monetary Theory, among others. Goldman's analysts said they 'remain optimistic' about gold going into 2020, given investors view it as a safe or 'haven' asset during turbulent times. 'We still see upside in gold as late cycle concerns and heightened political uncertainty will likely support investment demand for gold as a defensive asset.'"
Paul Volcker, Central Banker Who Defeated Inflation, Dead At 92 -Zero Hedge
"Paul A. Volcker, who helped shape American economic policy for more than six decades, and who will forever be etched in the history books for leading the Federal Reserve's brute-force campaign to subdue inflation in the late 1970s and early '80s, has died on Sunday in New York, the NYT reported. He was 92....Paul Volcker was the last of the great US central bankers. He was followed by such intellectual midgets as Alan Greenspan and Ben Bernanke who unleashed the now infamous cycle of Fed-inspired booms and busts, the outcome of which will have devastating consequences for the US economy and the world. In recent years, Volcker was instrument in crafting the 'Volcker Rule' which prohibited banks from engaging in prop trading, which however banks promptly circumvented by pretending that prop trading was, in fact, hedging. 'As a senior Federal Reserve official from 1975 to 1987, in addition to battling inflation, he sought to limit the easing of financial regulation and warned that the rapid growth of the federal debt threatened the nation’s economic health. In his last official post, as chairman of President Barack Obama's Economic Recovery Advisory Board, formed in response to the 2008 financial crisis, he persuaded lawmakers to impose new restrictions on big banks - a measure known as the 'Volcker Rule.'...His defining achievement, however, was his success in ending an extended period of high inflation after President Jimmy Carter chose him to be the Fed's chairman in 1979. He prevailed by delivering shock therapy, driving the economy into a deep recession to persuade Americans to abandon their entrenched expectation that prices would keep rising rapidly. The cost was steep. As consumers stopped buying homes and cars, millions of workers lost their jobs. Angry homebuilders mailed chunks of two-by-fours to the Fed's marble headquarters in Washington. But Mr. Volcker managed to wring most inflation from the economy,' reports New York Times."
As Tariff Deadline Looms, Investors' Other Worries Fade Away -Wall Street Journal
"Investors are anxiously waiting to see whether a new round of tariffs on Chinese consumer goods takes effect next week, one of the few remaining hurdles for the stock market in 2019....Many analysts had assumed that tariffs on more imports from China, ranging from smartphones to clothing, would be off the table after the U.S. and China reached a tentative truce in mid-October. But President Trump's comment early last week that he is willing to wait until after next year's presidential election to strike a limited trade deal raised the specter of a new challenge to the U.S. economy....Soothing comments from trade officials convinced some analysts that Mr. Trump's remarks were a negotiating tactic....'Just as easily as markets sell off on one headline and one tweet, they can turn around 10 minutes later,' said Shawn Cruz, manager of trader strategy at TD Ameritrade. 'It's going to drive what investors are going to be doing.'....If the new tariffs start hurting consumers, some investors are wary of another uptick in recession fears. 'The domino effect is scary,' said Keith Buchanan, a portfolio manager at GLOBALT Investments. Mr. Buchanan said the firm has recently increased its investment in gold because the precious metal tends to hold its value when appetite for riskier options wanes."
Jobs, Jobs Everywhere, But Most of Them Kind of Suck -New York Magazine
"Friday's jobs report must have been adapted from a comic book - because everyone's calling it a 'blockbuster'....A true 'full employment' economy can advance many goals that liberals have struggled to promote through legislation....For the median job-seeker in Trump's America, the odds may be good, but the good jobs are an oddity. Amid all the encouraging signs in Friday's jobs report, wage growth remained bizarrely tepid....What technology and trade have done, however, is displace millions of Americans from their middle-class jobs, and send them hurtling down the income ladder into less remunerative occupations....The plight of the downwardly mobile manufacturing worker is familiar to most Americans. But that of the displaced administrative assistant is less so. And yet, they are two sides of the same story: Since 2000, the U.S. economy has shed 2.9 million jobs in (disproportionately male) production occupations, and 2.1 million in (disproportionately female) administrative and office-support roles...What's more, the jobs that our 'blockbuster' economy is creating aren't just lackluster in monetary terms, but in other measures of job quality, as well. A recent Gallup survey illuminates this point...Gallup’s headline finding is that, as measured by its index, only 40 percent of Americans currently have 'good' jobs."
12.6.19 - What's Behind Today's Blockbuster Jobs Report?
Gold last traded at $1,460 an ounce. Silver at $16.58 an ounce.
NEWS SUMMARY: Precious metal prices dipped on profit-taking Friday after upbeat economic data boosted the buck. U.S. stocks rose on the back of U.S. jobs growth as Wall Street wrapped up a choppy week of trading.
Here Is The Main Reason For Today's Blockbuster Jobs Report -Zero Hedge
"Following a disastrous ADP print just two days ago, which showed that the US economy added just the second fewest number of private payrolls since March 2010, and a sellside 'whisper' number that was about half the consensus expectation of 183K, the BLS reported a blockbuster jobs report, according to which the US economy added 266K jobs (according to the establishment survey), the biggest monthly increase since January, and a near record divergence with what ADP indicated. To be sure, peaking behind the headline data revealed some questionable data, like only an 83K increase in employment (according to the Household survey), a 7K drop in mining jobs, a 4K decline in wholesale trade, a stagnant construction sector, lot of seasonal hiring, a catch up in census worker hires, and so on. Warts aside, many are confused what was behind the surprise upside print, and how the payrolls print came 29K jobs more than the highest forecast among 78 economists. The simple answer: a surge in manufacturing workers. As shown in the chart below, 54K manufacturing workers were added in November, the most in over two decades, or since 1998, as a result of about 41K GM striking workers returning to their jobs. That said, the November surge was an offset to the 43K slide in October, so on net, the print was largely a wash between the two months."
Gazing into the recession crystal ball -One America News
"The protracted trade war between China and the United States and a deteriorating global growth outlook have left investors nervous that the longest expansion in American history is at risk of ending. Recession fears were sparked earlier this year when the yield curve inverted – a key indicator of a pending downturn....While concerns have eased, an economic rebound is not expected any time soon, according to a recent Reuters poll of economists, and pockets of the economy and markets which are causing concern...A recent report from S&P Global Ratings pegs the chance of a U.S. recession over the next 12 months from 25%-30%....Consumer demand is a critical driver of the U.S. economy, and historically consumer confidence wanes during downturns. Currently consumer confidence is near cyclical highs....Credit spreads – the premium investors are paid above the yield on safer U.S. Treasuries to hold the riskier securities – typically widen when the perceived risk of default rises. Investors are now pulling out of the riskiest U.S. corporate debt amid concerns about leverage levels as the economy slows."
Markets In 'Goldilocks' Mode Amid Strong Job Gains -Forbes
"November turned into an employment bonanza, helped in part by the return of workers from a strike at General Motors (GM). The economy busted out with 266,000 new jobs, the highest total for any month since January. If you add the Labor Department’s upward revisions of a combined 41,000 jobs for September and October to this impressive November tally, new jobs growth has averaged a very healthy 205,000 the last three months and 180,000 for the year to date....If you're punching a clock, you earned on average of seven cents more for each hour on the job in November compared to October. That puts wage growth at 3.1% year-over-year, right in the heart of the 'Goldilocks' zone that gives workers a wallet boost but probably won’t be enough to have the Fed fretting about potential inflation....With the Fed meeting looming next week, it's not too early to start thinking about outcomes. At this point, chances for a rate cut look about as likely as a snowstorm in Miami, if the futures market is any indication."
'Don't fall asleep on gold' as it gears up for another run -Marketwatch
"'The noise around gold during its big run in the summer has certainly quieted down as the metal has been consolidating for over three months. ETF inflows for gold have finally moderated from extreme levels as investor exuberance fades,' said Jeff deGraaf, chairman of Renaissance Macro Research, in a Thursday note. 'We don't want you to fall asleep on gold, the charts are too good,' deGraaf said. 'A drop in extreme sentiment during a period of consolidation as the overbought condition works off after breaking out of a large basing pattern is exactly the type of action you want to see.'....Gold sits around 5.6% below the September high, holding a 15.8% year-to-date gain and posting a 19% rise over the last 12 months. The popular, bullion-tracking SPDR Gold Trust is up 14.8% year to date and 18.9% over the last 12 months....'Gold may be gearing up for another run and we think it's worth owning here,' he said."
12.5.19 - 10 Outrageous 2020 Predictions
Gold last traded at $1,479 an ounce. Silver at $16.98 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks decline despite upbeat employment data amid China trade deal worries.
Gold prices to rally to $1,600 by end of 2020 -ABN AMRO/Kitco
"Easy monetary policy and low interest rates are here to stay and that will support gold prices in the long term, but investors need to be a little patient, according to one market analyst. In her 2020 outlook forecast published Wednesday, Georgette Boele, senior FX and precious-metals strategist at ABN AMRO, said that she is bullish on the precious metals next year, but the yellow metal could see a modest correction in the first half of the year....Looking past the near-term risks, the Dutch bank is bullish on gold, looking for the price to push above $1,600 an ounce by December 2020...Monetary policy and lower real interest rates are the biggest reasons Boele expects to see higher prices in the second half of 2020. She added that ABN AMRO economists expect the Federal Reserve to cut interest rates in the first quarter of 2020. 'Central banks remain keen to support growth and/or to reach their inflation target. In the near term, we expect growth in the eurozone to remain weak and the economic situation in the U.S. to deteriorate,' she said. 'The outstanding amount of negative-yielding government bonds will probably grow; while gold has no yield, it is at least not paying negative rates.' Boele also said that weak economic growth should weigh on the U.S. dollar, providing another bullish factor for gold."
Could 2020 Rhyme with 1980? -Craig R. Smith/Swiss America
"Forty years ago gold prices spiked up over eight-fold – from $100/oz. in January 1977 to $850/oz. in January 1980. (A 1980 gold price of $850/oz. would equate to an inflation-adjusted gold price of $2,574/oz. today). What were the factors that pushed gold prices to rocket to historic highs four decades ago? Could we see a similar scenario play out again forty years later in 2020? History may not always repeat, but sometimes it rhymes. Several factors converged in 1980 which sent investors rushing for the protection of physical gold. One of which was geopolitical uncertainty, as Russia invaded Afghanistan and the Iran hostage crisis erupted. We faced a diplomatic standoff between the United States and Iran over fifty-two American diplomats and citizens held hostage for 444 days between November 4, 1979 and January 20, 1981. Fast-forward to 2019, and the Mid-East is just as combustible as ever. A conflict could break out in any number of places for any number of reasons. Consider the September 14, 2019 attack on Saudi oil facilities, Iran's U.S. threats against our trade sanctions, an Iranian-backed Shiite militia in Iraq, an attack by Hezbollah on Israel, or if Syria's repression morphs into an international confrontation. Any of these could erupt by early 2020." Full Story
10 Outrageous Predictions 2020 -Saxo Bank
"Continuing almost two decades of tradition, our experts have made 10 Outrageous Predictions for the year ahead. Their consensus-smashing forecasts would send shockwaves through the markets, if they come to pass. So will they prove pure fantasy or visions of reality? 1. Chips go cold in AI winter - Diminishing returns on chip applications sees the SOX Index of semiconductor stocks collapse 50%. 2. Stagflation rewards value over growth - The iShares MSCCI World Value Factor ETF outperforms the FANGs by 25%. 3. ECB folds and hikes rates - European banks make a comeback as the EuroStoxx bank index rises 30%. 4. In energy, green is not the new black - The green revolution gets a reality-check as dirty energy starts to pay once again. 5. South Africa gets electrocuted by ESKOM debt - USDZAR rises from 15 to 20 as world cuts credit lines to the rainbow nation. 6. Trump announces America First Tax - A 25% tax on all foreign-derived revenue scrambles supply lines and pushes inflation higher. 7. Sweden breaks bad - Sweden’s pragmatic attitude shift leads to a massive increase in fiscal spending that drives up the SEK. 8. Dems win clean sweep in 2020 election - Democrats take control of the presidency and both houses of congress. Big healthcare and pharma stocks collapse 50%. 9. Hungary leaves the EU - HUF collapses to EURHUF 375 as Hungary’s leadership and the EU fight over the country’s place in the Union. 10. Asia launches digital reserve currency - An Asian, AIIB-backed, digital reserve currency tanks the US dollar by 30% versus gold. Gold prices rise above $2,000/oz."
How jittery investors would respond if Trump doesn't reach a trade deal with China -The Hill
"President Trump's off-the-cuff remark yesterday that a trade deal with China could be delayed until after the U.S. elections in 2020 spawned a large stock market sell-off. While markets have since recouped some of the losses amid hopes that a deal will be reached, the reaction to Trump’s statement raises the specter of what might happen if there is an impasse. Previously, investors hoped an accord would be reached whereby China purchased more agricultural goods from the U.S. while the Trump administration rolled back some of the tariff hikes it had implemented. If not, the round of tariff hikes totaling $156 billion that were slated for December 15 would go into effect and virtually all imports from China, worth about $550 billion, would be subject to duties of 15 percent to 25 percent. Throughout the negotiating process, he has suggested that a deal is about to be consummated, only to pull the rug at the last moment. Investors have been caught off guard each time, because they believe it is rational for both sides to reach an agreement before economic damage is inflicted. But this is not how the president views the situation. He believes the U.S. has the upper hand in negotiations, because China depends on the U.S. as an export market and its domestic economy is slowing more than official statistics indicate....Thus far, the impact of tariff hikes has mainly been felt by U.S. manufacturers, farmers and businesses that have borne the brunt of the tariff hikes...But the latest round of hikes that were implemented this summer and which are scheduled for this month will mainly affect consumer goods....Should consumer confidence falter, it would likely be accompanied by stock market weakness."
12.4.19 - 2020: An Election Year Recession?
Gold last traded at $1,480 an ounce. Silver at $16.91 an ounce.
NEWS SUMMARY: Precious metal prices eased Wednesday on profit-taking despite a weaker dollar. U.S. stocks rebounded from a 3-day slide based on an upbeat report about the U.S. China trade agreement.
Gold Outlook 2020 -FX Empire
"Technical analysts seem to be painting a bullish picture with 2019's mid-year breakout laying the groundwork for even higher prices in 2020. The bears are watching the 10-year yield, the bulls, the chart pattern. The two will work together to produce a strong rally if signs of recession re-emerge next year....'According to our work, gold broke out of a critical 6-year base in June 2019 and established a new bull market. The correction that began in September is nearly complete, and gold should resume the uptrend in 2020. For 2020, we expect gold to continue to advance the larger pattern and challenge key resistance between $1750 – $1800. Our current forecast calls for a pattern breakout above $2000 by 2021 or 2022. However, that time frame could be expedited depending on the results of the 2020 election. Longer-term, we believe gold will continue to progress throughout the 2020s, potentially reaching $7500 - $10,000 or higher as the debt super cycle implodes globally." writes AG Thorson of Gold Predict."
An Election Year Recession? -Levisohn/Barrons
"President Donald Trump said that he'd be happy to wait on a trade deal until after the 2020 election. Did he just make a 2020 recession more likely, and in an election year at that?....My main argument...The economy isn't nearly as strong as it looks and a soft landing is not assured....Yesterday's November's ISM manufacturing index showed a decline in manufacturing activity, not a rebound. And then today, trade fears returned after having been calmly swept into the corner. The latter is particularly bad for the bullish narrative, and stocks have reacted accordingly. But how realistic is a 2020 recession, particularly since it is an election year?...In a note released last week, Societe General's Stephen Gallagher argued that there wasn't much room for monetary stimulus - the Fed already cut interest rates - or fiscal stimulus - tax cuts have already ballooned the deficit. And with a divided government, it's highly unlikely an agreement can be reached until after a recession has started, he continues. The good news is that a recession during an election year is very unlikely. Since 1950, only two have started during an election year: In 1960 - when John F. Kennedy beat Richard Nixon - and 1980 - when Ronald Reagan beat incumbent Jimmy Carter - according to Dow Jones Market Data Group. We'll give an honorable mention to the Financial Crisis, which earned its name in 2008, even though the recession actually started in 2007. That puts the odds of a recession during an election year at 17.6%."
Trillion-dollar deficits as far as the eye can see, and hardly a voice of caution to be heard -The Hill
"In the old days, a decade or so ago, Democrats would have assailed Donald Trump's failure on federal deficits; instead of eliminating it, as promised, the deficit has doubled to a trillion dollars as far as the eye can see....Yet deficits, as a political issue, are dead....For Democrats, the pressing urgency of unmet needs in health care, education, infrastructure and the social safety net far outweigh any rising debt. They favor tax hikes, mainly on the rich, to reverse the huge 2017 Republican tax cuts, but there's less premium on the green eyeshade test of paying for all spending initiatives. Most Republicans strongly want to keep those tax cuts - the only significant achievement of three years of party rule - and have little interest in tackling politically popular entitlements....Even Washington's most stalwart and consistent fiscal hawk, Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, acknowledges the budget deficit isn't a top policy concern right now 'as low interest rates buy us some time.' However, she cautions that the fiscal situation 'is the worst it has been since just after World War II,' adding, 'No one knows when the tipping point is or what it looks like, but those are questions we shouldn't want to find the answers to.'"
Citizen Bloomberg -Ponte/WorldNetDaily
"In 1941, filmmaker Orson Welles created what many regard as the best movie ever made. 'Citizen Kane' followed the career of a newspaper magnate who began as an idealist but gradually became ruthlessly obsessed only with power. In the film, Charles Foster Kane changes from a puppet master who elects and pulls the strings of tawdry politicians into a politician himself....Michael Bloomberg - who should be called 'Citizen Bloomberg' - is one of today's most powerful media magnates. He owns a major interest in a slightly left-of-center news service, a radio and a television network, and Bloomberg Business Week Magazine, a media complex that employs approximately 2,700 journalists and analysts...His media empire has earned Bloomberg $52.3 billion in net worth, which makes him at least the ninth-richest person in America....Earlier this year, writes AP, Bloomberg 'pledged to separate myself from his foundation and private businesses should he launch a campaign.' Now, however, he has as yet offered no firewall that would keep him from using his media outlets in the presidential campaign, nor has he agreed to sell his media companies if elected. Can he ethically be both an elected president and a media baron? This raises hundreds of legal and ethical questions. Can those reporting for Bloomberg's media empire be fair and objective if their boss is a candidate? He has said: 'I don't want the reporters I'm paying to write a bad story about me.' Can reporters elsewhere who might someday need to seek a job with Bloomberg's empire be truly impartial, or would they be afraid of being put on his 'enemies list' and censor themselves?....Bloomberg allegedly has a long record of stop-and-frisk close encounters with female employees, as the New York Police Department under his 12 years as a firearms-confiscating mayor did disproportionately with African American and Latino males. He has recently apologized for both behaviors, but this raises the question of who Citizen Bloomberg, 77, is becoming."
12.3.19 - Here's What Happens If Dec. 15 Tariffs Kick In
Gold last traded at $1,484 an ounce. Silver at $17.24 an ounce.
NEWS SUMMARY: Precious metal prices shot up to 1-month highs Tuesday amid rising China trade uncertainty. U.S. stocks sank after President Donald Trump suggested he may delay a trade deal with China until after the 2020 presidential election.
The price of gold is up sharply on flight to safety flows -Forex Live
"The price of gold is up sharply in reaction to flight to safety flows on the back of a deterioration of US China trade. Technically, looking at the daily chart, the price rise of $17.60 to $1480 has the precious metal moving closer to its 100 day moving average at $1486.17. The high price today has so far reached $1481.86. The last few days has seen the price consolidating at lower levels. However the run to the upside today has traders eyeing that key moving average. A move above would be more bullish from a technical perspective."
The New Cold War? It's With China, and It Has Already Begun -Ferguson/New York Times
"When did Cold War II begin? Future historians will say it was in 2019. Some will insist that a new Cold War had already begun - with Russia - in 2014, when Moscow sent its troops into Ukraine. But the deterioration of Russian-American relations pales in comparison to the rise in Sino-American antagonism that has unfolded over the past couple of years....Public opinion made a similar shift. A Pew Research Center survey showed that the percentage of Americans holding an unfavorable view of China jumped to 60 percent in 2019 from 47 percent the year before. Only 26 percent of Americans held a favorable view of the country. Something else changed in 2019. What had started out as a trade war - a tit for tat over tariffs while the two sides argued about the American trade deficit and Chinese intellectual property theft - rapidly metamorphosed into a cluster of other conflicts....The threat also loomed of a currency war over the exchange rate for the Chinese yuan, which the People's Bank of China has allowed to weaken against the dollar....Evidence of Chinese espionage and influence operations in American academia and Silicon Valley is already pushing the government to reprioritize national security in research and development. It would be nothing short of disastrous if China won the race for quantum supremacy, which could render all conventional computer encryption obsolete. The one big risk with Cold War II would be to assume confidently that the United States is bound to win it....In 2007, the economist Moritz Schularick and I used the term 'Chimerica' to describe the symbiotic economic relationship between China and the United States. Today, that partnership is dead. Cold War II has begun. And, if history is any guide, it will last a lot longer than the president on whose watch it started."
Trump Says Trade War Could Drag On, Stokes France Spat -Wall Street Journal
"President Trump suggested a trade war with China could drag out past the 2020 election and stoked a tariff spat with France during a visit to Europe for a NATO meeting. Mr. Trump said he had 'no deadline' to conclude a trade deal with China, adding that 'in some ways I like the idea of waiting until after the election,' during a sitdown with the North Atlantic Treaty Organization Secretary-General Jens Stoltenberg on Tuesday in London. The president’s comments injected fresh uncertainty over the future of a 'phase-one' trade deal between the U.S. and China. Looming closer are the administration's plans to impose tariffs on smartphones, toys and other products from China on Dec. 15. Mr. Trump also criticized French President Emmanuel Macron for comments he made about the 29-member military alliance, and expressed frustration with France’s new digital-services tax. 'I don't want France taxing American companies. If they're going to be taxed it's going to be the United States that will tax them,' Mr. Trump said...The French tax, which was signed into law July 24, applies a 3% tax on revenue that tech companies reap in France from such activities as undertaking targeted advertising or running a digital marketplace. In response, the Trump administration has proposed tariffs of up to 100% against $2.4 billion of French imports."
Here's What Happens to Markets If U.S. Tariffs on China Kick in Dec. 15 -Bloomberg
"The Dec. 15 flashpoint on tariffs was thrown into sharp relief Tuesday when Trump said he sees no urgency to complete a deal, right after he threatened an assortment of trading partners with levies. 'If tariffs scheduled for Dec. 15 are implemented it would be a huge shock to the market consensus,' said Sue Trinh, managing director for global macro strategy at Manulife Investment Management in Hong Kong. 'Trump would be the Grinch that stole Christmas,' she said....It will be 'definitely risk-off across the screen,' Tongli Han, chief investment officer at Deepblue Global Investment, said in an interview with Bloomberg TV. 'What happened recently makes this trade deal more costly for Chinese leaders - so I'm seeing a gloomy future for the short term, one-to-two months.'....The message to investors is 'maybe trim a little bit of equity exposure, or certainly not chase the market at this stage. But look to do so in the next few weeks if we see a 5-to-7% pullback.'....'Even if there is a trade deal, it doesn't solve most of the issues that we still have with China,' which is something that markets are going to have to reflect in time, said Christopher Smart, chief global strategist at Barings Investment Institute, on Bloomberg TV. 'In fact, it probably makes the relationship more difficult to manage, because we've taken tariffs off the table.'"
12.2.19 - Selling Your Home to Fund Retirement?
Gold last traded at $1,469 an ounce. Silver at $17.00 an ounce.
NEWS SUMMARY: Precious metal prices steadied Monday on bargain-hunting and a weaker dollar. U.S. stocks faltered as investors digested disappointing manufacturing data along with deteriorating trade news.
The Narrative About Gold is Changing Again -Yahoo Finance
"Let's face it, we live in a world of radical uncertainty. There are not only many known unknowns in the world, but the same can't be said of unknown unknowns...But the real issue is that we do not know the probabilities, because we even do not know how the world works. You see, the probability applies in a casino but not in a real world. So how do we cope with the unknown? Mervyn King, former governor of the Bank of England, provides an answer in his interesting book The End of Alchemy. According to him, a coping strategy comprises three elements â€“ a categorization of problems, a set of rules of thumb to cope with the latter class of problems; and a narrative. What is narrative? King defines it as 'a story that integrates the most important pieces of information in order to provide a basis for choosing the heuristic and the motive for a decision.'....The narratives are of great importance in the financial markets. As King points out, 'under radical uncertainty, market prices are determined not by objective fundamentals but by narratives about fundamentals.'....Now, it seems that the narrative about the economy, the central banking and gold is changing again. The economy is slowing down and people worry about recession. The global bond market is awash in negative yields. The Fed abandoned its tightening cycle. The price of gold jumped above $1,400 and it is flirting with $1,500. In such an environment, there are substantial odds that narratives will change in favor of gold."
The Hidden Link Between Fiat Money And The Increasing Appeal Of Socialism -Zero Hedge
"What causes the seemingly unfounded confidence in socialism we encounter more and more in the news media and among political activists? It is likely not a coincidence that most people living today have lived most of their lives in a world dominated by fiat money. It has now been nearly fifty years since the United States broke all ties between the dollar and gold. It's been even longer since other major currencies were tied to gold at all. Consequently we now live in a world where the creation of wealth is seen by many as requiring little more than the creation of more money. In this kind of world, why not have socialism? If we run out of money, we can always print more....Gold backing of a currency provided a solid intellectual foundation of reality that few even recognized existed within themselves; (i.e., that we live in a world of scarcity and uncertainty). This reinforced the idea that wealth has to be built. It cannot be conjured out of thin air, just as gold cannot be conjured out of thin air. But fiat currency can be conjured out of thin air and in enormous amounts. The longer a fiat currency is the coin of the land, the more one is led to believe that nothing should be in short supply, since everything is bought with money and money need not be in short supply....The psychological impact of a lifetime within a fiat money economy cannot be underestimated. One's world is turned upside down....If wealth is so easy to create, many conclude only greed and cruelty are what stand between us and far greater prosperity for all. But that is the very reason that fiat money is so subversive to the social order. In a sound money economy any new spending program can be funded only by an increase in taxes, an increase in debt, or by cutting existing funding....It would be hard to invent a more effective method for the destruction of modern society."
After the US-China Trade War -Roach/Project Syndicate
"Trade truce or not, a protracted Cold War-like conflict between the United States and China has already begun. That should worry the US, which, unlike China, is devoid of a long-term strategic framework. The so-called phase one 'skinny' trade deal announced with great fanfare on October 11 may be an important political signal. While the deal, if ever consummated, will have next to no material economic impact, it provides a strong hint that Trump has finally had enough of this trade war. Consumed by domestic political concerns - especially impeachment and the looming 2020 election - it is in Trump's interest to declare victory and attempt to capitalize on it to counter his problems at home....But the Chinese leadership is not about to capitulate on its core principles of sovereignty and its aspirational mid-century goals of rejuvenation, growth, and development....If a phase one accord is reached, it behooves us to ponder what the world will look like after the trade war. Several possibilities are at the top of my list: deglobalization, decoupling, and trade diversion. Deglobalization is unlikely....Global decoupling is also unlikely....Trade diversion is another matter altogether...Putting pressure on one of many trading partners - precisely what the US is doing when it squeezes China in an effort to reduce its merchandise trade deficits with 102 countries - is likely to backfire....Trade truce or not, a protracted economic struggle between the US and China has already begun....That should worry the US, which is devoid of a long-term strategic framework. China is not. That is certainly the message from Sun Tzu in The Art of War: 'When your strategy is deep and far-reaching â€¦ you can win before you even fight.'"
Planning to sell your house to fund your retirement? Think again -Marketwatch
"Meager personal savings, debt, looming health care costs and more are pushing millions of older Americans to the brink. At least you could always cash out of your house and move somewhere cheaper, right? Perhaps, but as a new study from Zillow, the real estate website warns, perhaps not. The problems are threefold: Demographics, geography and finances....Zillow says 34% of all owner-occupied homes in the U.S. are owned by people aged 60 or older. Millions of these homes will hit the market over the next two decades as senior boomers either die, move in with their children or to an assisted living facilities. The problem: There are too many homes to be absorbed by Gen Xers. This suggests that prices will have to fall. Geography matters, too, and will impact some areas more - perhaps much more - than others. It's no surprise that homes in Rust Belt cities will be under pressure as people, for one reason or another, try to sell....Then there is the undeniable problem of finances. While some baby boomers have the luxury of having some sort of pension, along with retirement savings, Gen Xers are highly unlikely to have the former and have done little about the latter."