6.13.18 - Food Stamps Hit 8-Year Low
Gold last traded at $1,303 an ounce. Silver at $17.11 an ounce.
NEWS SUMMARY: Precious metal prices were steady Wednesday on dollar weakness after the Fed lifted rates 0.25%. U.S. stocks traded lower following the Fed rate hike, despite upbeat tech news.
Gold steady as investors brace for expected Fed rate rise -Reuters
"Gold prices traded just below $1,300 an ounce on Wednesday ahead of a U.S. Federal Reserve policy announcement that could trigger a sharp move in prices. Investors expect the Fed to raise interest rates but want to know if it intends to tighten policy four times in 2018 or three times, as it indicated earlier this year....Gold prices have tended to fall before recent U.S. interest rate rises, as investors anticipate the change, but rally afterwards. 'It might be different this time,' said Robin Bhar, head of metals research at Societe Generale. 'Forward guidance will be crucial ... That will dictate direction in the short term.'....The dollar weakened slightly against a basket of major currencies, giving gold some support."
Fed Lifts Interest Rates: Good or Bad? -Fox Business
Is the Federal Reserve helping or hurting the economy by raising interest rates at least four times this year? Will the flattening interest rate yield curve signal a recession is coming; as it has in the past? Watch now to find out.
Trump's Creative Destruction of the International Order -Foreign Policy
"Apparently, according to multiple reports, U.S. President Donald Trump blew up the post-Cold War world order during brief, contentious meetings at the G-7 summit in Ottawa this weekend. His summit with North Korea, of course, promises more of the same, though at least in a manner that most support....Trump has indeed torpedoed decades of assiduous work to build a global economic and political alliance among the world’s largest economies. Even then, the result might not be as bad as one might think. First, there's nothing inherently objectionable about trying to alter a given international order. Such systems are fluid; they should not be fetishized or treated a permanent just because they have served purposes in the past....For the moment, we are in the realm of angry words, not structural changes. The minor tariffs on steel and aluminum, along with the retaliatory actions of Canada, Mexico, the EU, and China for the moment amount to a few billion dollars in a global trade system in the trillions....To be fair, something is changing. China is easing its way into its identity as an economic superpower, and another dozen or so of the world's most affluent nations, including the G-7 members, are less and less willing to take a back seat to the United States....Trump supporters cheer because so many are up in arms...Trump did what Trump does: he stirred the pot, poked the hornet's nest. As for the rest, the world is evolving in ways that have nothing to do with him, began before him, and will long outlast this particular tempest."
Food Stamp Enrollment Dips to Lowest Level in 8 Years -Breitbart
"Overall enrollment in the nation's food stamp program has dipped to its lowest level in eight years, according to the latest statistics released by the U.S. Department of Agriculture (USDA). The latest USDA data reveals that enrollment in the Supplemental Nutrition Assistance Program (SNAP) - the federal government program that administers food stamps - dropped to 40,083,954 in March 2018. The last time enrollment in the food stamp program reached that level was February 2010, when 39,588,993 people participated in the nation's food stamp program. Although overall enrollment has reached its lowest point in eight years, food stamp enrollment has been declining steadily since 2013 and has only continued throughout President Trump's first year in office. Under Trump, 2.2 million fewer people have discontinued their participation in SNAP, mainly due to the Trump administration's attempts to reform SNAP by controlling program costs at the federal and state levels."
6.12.18 - G7 Summit: Outlived Usefulness?
Gold last traded at $1,299 an ounce. Silver at $16.89 an ounce.
NEWS SUMMARY: Precious metal prices were steady Tuesday ahead of tomorrow's expected Fed rate hike. U.S. stocks traded flat as investors digested the potential outcome of the historic Trump-Kim summit.
Will the Fed Set Off a Recession Alarm? -Wall Street Journal
"The chairman of the Federal Reserve, just four months into his term, could be in the uncomfortable situation this week of signaling that a recession is coming. The Fed seems all but certain to raise its target range on overnight rates by a quarter point for the second time this year on Wednesday. There is a good chance it lifts its estimate for total rate increases for 2018 from three to four....The difference between three and four rate increases may not matter much to investors, who expect rates to keep rising next year. But it matters a lot for the yield curve, which is edging closer toward inverting, the situation in which short-term rates are higher than long-term rates. That is a longstanding signal that a recession is coming....The yield curve last was inverted in 2007, just before a recession. It also inverted in 2000. Federal Reserve Chairman Jerome Powell, when he holds his news conference on Wednesday, may be asked to explain why a recession won’t follow if the curve inverts again."
Trump's bluster may just pay off with North Korea -Marketwatch
"Let's not award any Nobel Peace Prize just yet, but as a longtime - and often harsh - Trump critic, I think he deserves credit for taking a new approach in dealing with one of the most dangerous problems on the planet: North Korea and its deadly arsenal of nuclear weapons. Since the Eisenhower administration, North Korea has been an enemy. Eleven presidents have worked to contain it, but that's not the same as actually eliminating the problem. And while there are no guarantees Trump will succeed where his many predecessors have failed, talking, in and of itself, isn't a bad thing. 'Let us never negotiate out of fear,' John F Kennedy said in 1961, 'but let us never fear to negotiate.'....Trump has played the buildup to the summit well, downplaying its prospects - 'We'll see what happens' - while focusing on the long-term potential of a more docile North Korean regime...So, what else can Trump do on the global stage with his unorthodox out-of-the-box bluster? Not much."
U.S. Inflation Accelerates to Six-Year High, Eroding Wages -Bloomberg
"U.S. inflation accelerated in May to the fastest pace in more than six years, reinforcing the Federal Reserve’s outlook for gradual interest-rate hikes while eroding wage gains that remain relatively tepid despite an 18-year low in unemployment. The consumer price index rose 0.2 percent from the previous month and 2.8 percent from a year earlier, matching estimates, a Labor Department report showed Tuesday. The annual gain was the biggest since February 2012 and follows a 2.5 percent increase in April. The pickup in headline inflation partly reflects gains in fuel prices, though the annual gain in the core measure - seen by officials as a better gauge of underlying inflation trends - was the most since February 2017....A separate Labor Department report on Tuesday illustrated how higher prices are pinching wallets: average hourly wages, adjusted for inflation, were unchanged in May from a year earlier."
President Trump Didn't Sign G7's Leftist Agenda - Smart Move -Investors
"President Trump created a quite a stir among the other Western leaders by refusing to sign the 'communique' that capped the G7 summit. But he was right to do so. This is once again being styled as the crude, unnuanced American president refusing to accommodate himself to the much wiser leaders of Europe. In fact, he wisely refrained from signing what was an empty, far-left political document, which is typical of the G7 'consensus' that American presidents have gone along with for decades....All told, the communique contains 27 points made in five major sections. All of them enlighten citizens around the world about how to think about everything, from gender and jobs to peace and climate change....The leadership of the nations allied with the U.S. come up short. They've ridden the anti-Trump wave of the so-called Progressives, rolling their eyes at his comments and acting as if he, not they, are the problem....Based on its recent performances, the G7 summit has outlived its usefulness. It has become an opportunity for troubled European leaders to preen and pose for cameras, speak progressive platitudes, engage in a little anti-Americanism, but do little if anything of substance."
6.11.18 - Social Security Crisis is Here
Gold last traded at $1,303 an ounce. Silver at $16.95 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on geopolitical uncertainty and a flat dollar. U.S. stocks inched higher following a turbulent G-7 meeting, ahead of key North Korea summit and Fed rate decision.
Gold Prices Edge Higher with Central Banks, U.S.-North Korea Summit in Focus -UK Investing
"Gold prices started the week higher in midmorning trade Monday while investors returned to their desks to digest the trade tension over the weekend at the G7 summit and looked ahead to the summit between the U.S. and North Korea as well as key policy decisions from the Federal Reserve and European Central Bank....In a session with no major U.S. economic reports, market participants were busy digesting the increased trade tensions that came out of the G7 summit over the weekend. U.S. President Donald Trump refused to endorse a G7 declaration calling for a reduction of tariffs, as he continued to lash out at traditionally close allies for allegedly treating the U.S. unfairly. Markets seemed unfazed by the outcome, with equities trading mostly higher on Monday, as attention turned to Singapore where Trump prepares for a historic summit with North Korean Leader Kim Jong Un to take place on Tuesday at 9:30AM local time....Meanwhile, markets were also prepping for a key week for central banks. The Fed’s two-day meeting will kick off on Tuesday with almost certain to raise interest rates by a quarter point for a second time this year at the conclusion of its two-day policy meeting at 2:00PM ET on Wednesday."
3 key foreign meetings, not just Singapore -Ponte/WND
"The June 12 meeting between President Donald Trump and North Korean Communist dictator Kim Jong-Un could be momentous, but so too could the seeds of two other June meetings. Days ago Kim fired several senior staffers, reducing his fear of a coup d'etat while he is away. If he does not move to eliminate his nuclear weapons, President Trump will likely respond by encouraging parity on the peninsula through South Korean nukes. Mr. Trump might also encourage Japan to flex its secret nukes and their accompanying space and weather rockets, which have long had the specs of ballistic missiles. Ever since the 'Three Arrows Affair' of the 1960s, it has been clear Japan would regard an attack on South Korea - whose city Busan/Pusan is only about 30 miles away from Nagasaki Prefecture's Tsushima Island, scarcely farther than the distance from Catalina Island to the California mainland - as an attack on the Japanese homeland....But while media's eyes turn to Asia, the Bilderberg gathering has been underway in Italy's Turin, shrouded in mystery....President Trump is fighting to defeat globalist Progressivism. In the G-7 and Bilderberg meetings, he faces private and public enemies of Great American nationalism. Keep your eye not only on Singapore, but on all three meetings." Full story
Sweden Tries to Halt Total Cashlessness -Bloomberg Quint
"A key committee of Swedish lawmakers wants to force the country's biggest banks to handle cash in an effort to halt the nation’s march toward complete cashlessness. Parliament's Riksbank committee, which is in the process of reviewing the central bank law, proposed making it mandatory for banks to offer cash withdrawals and handle daily receipts....The lawmakers said there needs to be 'reasonable access to those services in all of Sweden,' and that 99 percent of Swedes should have a maximum distance of 25 kilometers (16 miles) to the nearest cash withdrawal. The move is a response to Sweden’s rapid transformation as it becomes one of the most cashless societies in the world. That's led to concerns that some people are finding it increasingly difficult to cope without access to mobile phones or bank cards. There are also fears around what would happen if the digital payments systems suddenly crashed....'We also want to see a proposal that all players must accept cash as well. It's a legal means of payment and should be accepted by all. It's like that in most countries, but not in Sweden.'"
Don't Wait For Social Security's Crisis - It's Here -Investors
"Entitlements: Social Security is like the classic children's tale, 'The Boy Who Cried Wolf.' So many warnings have been made, no one listens anymore. Well guess what? The wolf's now at the door. Are you listening now? For the first time in 36 years, Social Security will take money out of its 'trust fund' - an accounting fiction that would get you jailed for fraud in the private sector - to pay retirees. The truth is, Social Security is for all intents and purposes bankrupt. Since 2010, Social Security has been spending more than it took in, making up the difference by tapping into the interest paid on a $2.9 trillion government bond fund....By 2034, the entire pile of IOUs will disappear. Everything. It will require slashing benefits by at least 21%, or raising payroll taxes by 31%....So our financial Armageddon is coming earlier than expected. Putting an end to this latter-day Ponzi scheme won't be easy. It's time for all of us, politicians and citizens alike, to consider real, workable alternatives to fix the problem."
6.8.18 - Inflationary Tariffs May Supercharge Gold
Gold last traded at $1,302 an ounce. Silver at $16.74 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying and a flat dollar. U.S. stocks trades slightly higher as tensions between the U.S. and key trade partners rises as the G-7 summit kicked off.
At G-7 Summit, Trade Tensions Expected to Take Center Stage -Wall Street Journal
"Leaders from the Group of Seven industrialized countries gather in Quebec's Charlevoix region starting Friday for two days of meetings that is sure to include some blunt talk on trade - given the dissension in the ranks after U.S. tariffs on steel and aluminum products. Here are five things to keep an eye on over the next two days: TRADE TRUMPS ALL: Canadian Prime Minister Justin Trudeau wanted the summit in Charlevoix to focus on themes he has championed, such as gender equality, artificial intelligence and the environment....COMMUNIQUE BREAKDOWN: G-7 finance officials issued a rebuke of the U.S. in a closing statement of their meeting last week - a departure from tradition that G-7 and Group of 20 gatherings conclude with a communique in which all participants sign on....G-6 DYNAMIC: While attendees have been at odds with the U.S. over trade, the so-called G-6 may not necessarily present a united front at the summit....SOME SECURITY CONSENSUS: The G-7 won't be entirely at loggerheads. Officials are likely to rally around Mr. Trump and his pending summit with North Korean leader Kim Jong Un....TRUDEAU ON THE SPOT: According to University of Toronto's John Kirton, head of the school's G-7 research program, 'Trudeau seems to have replaced Merkel as public enemy No. 1 in Trump's mind' among the group of industrialized countries."
GO GOLD! Inflationary Tariffs Could Supercharge the Yellow Metal -Holmes/US Funds
"Ready for inflation? Just days after Treasury Secretary Steven Mnuchin reassured markets that a trade war between the U.S. and China was 'on hold,' the Trump administration announced that it would be moving forward with plans to impose 25 percent tariffs on as much as $50 billion worth of Chinese exports to the U.S. Beijing has already suggested that it will retaliate in kind. The White House also reinstated tariffs on imports of steel and aluminum from Canada, Mexico and the European Union (EU) after allowing earlier exemptions to expire. Again, there's a big chance the U.S. will see some sort of tit-for-tat response. Steel prices are already up 45 percent from a year ago....Next up, the U.S. government could slap steep tariffs on imported automobiles - and possibly even ban German luxury vehicles outright. These decisions, if fully implemented, will have a multitude of implications on the U.S. and world economies. What I can say with full confidence, though, is that prices will rise - for producers and consumers alike - which is good for gold but a headwind for continued economic growth....In the years when inflation was 3 percent or higher, annual gold returns were 15 percent on average, according to the World Gold Council (WGC)."
Ben Bernanke: The US Economy Is Going To Go Off The Cliff In 2020 -Zero Hedge
"While Ray Dalio's co-Chief Investment Officer listed several specific reasons for his unprecedented bearishness, noting that 'markets are already vulnerable as the Fed is pulling back liquidity and raising rates, making cash scarcer and more attractive'....The result was the hedge fund's now infamous conclusion: 'We are bearish on financial assets as the US economy progresses toward the late cycle, liquidity has been removed, and the markets are pricing in a continuation of recent conditions despite the changing backdrop.' Today, none other than former Fed Chair Ben Bernanke repeated the same assessment almost verbatim in explaining his own suddenly quite dire outlook on the economy....Speaking at the American Enterprise Institute, Bernanke echoed Bridgewater's biggest concern about the sugar high facing the US economy for the next 18 months....Stealing further from the Bridgewater note, Bernanke said that while the stimulus 'is going to hit the economy in a big way this year and next year and then in 2020 Wile E. Coyote is going to go off the cliff, and it's going to look down' just when the US economy collides head on with what Bridgewater called 'an unsustainable set of conditions.'"
Home flipping activity reaches six-year high -Marketwatch
"Home flippers in today's market face a conundrum: Demand for homes has perhaps never been greater, but high prices are making it harder to see a strong return on investment. Homes flipped during the first quarter represented 6.9% of all sales, up from 5.9% in the previous quarter, according to a report released Thursday by real-estate data company Attom Data Solutions. As a share of overall purchases flipped homes are at a six-year high, same as this time a year ago. A marked increase in home flipping was one of the signs of an overheating property market in the lead up to the Great Recession a decade ago....'The 2018 housing market is a double-edged sword for home flippers,' Daren Blomquist, senior vice president at ATTOM Data Solutions, said in the report. They earn more when they sell the properties, but high prices mean that 'flippers to pay more to acquire homes to flip.'....FHA loans are especially popular among first-time buyers. And the first-quarter figure represented the lowest share of FHA buyers in a decade - suggesting that recent house-flipping activity has not benefited first-time buyers."
Thinking About Retirement? Consider Working a Little Longer -New York Times
"Saving and investing for retirement are important. But at a certain stage for most people, another strategy is far more powerful: working a little longer. That is the message of an academic study stuffed with provocative nuggets...The study, 'The Power of Working Longer,' is eye opening. It acknowledges the validity of trimming investment costs, investing through workplace retirement plans and saving as long and as much as you can....As pensions vanish and the stock market gyrates, Social Security remains the most stable pillar in most people's retirement. Increasing annual Social Security income by working longer - optimally, until at least age 70 - will improve financial security more than anything else most people can safely accomplish....Do everything that you can to prepare, the paper says, but don't forget the power of working longer."
6.7.18 - "A Cashless Society Is Very, Very Dangerous"
Gold last traded at $1,303 an ounce. Silver at $16.81 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on trade uncertainty and a weaker dollar. U.S. stocks traded mixed as Facebook and other major tech names pushed the sector lower.
Texas just opened the nation's first state-run gold depository -Texas Tribune
"Texans can now store their precious metals in a publicly backed secure vault close to home, as the United States' first state-run gold depository opens for business in Austin. A 23,000-square-foot building - operated by the private storage company Lone Star Tangible Assets - will serve as Texas' precious metals depository until 2019, when Lone Star is scheduled to open a facility double that size in Leander. Texas Comptroller Glenn Hegar became the first person to take advantage of the fully insured Texas Bullion Depository when he deposited his own gold and silver in the Austin vault earlier this week, according to his office. 'By having state oversight, if you deposit your precious metals, you know that we’re constantly over there, making sure the security is top-notch,' Hegar said....The University of Texas Investment Management Company, which oversees the assets of the University of Texas and Texas A&M systems, holds $1 billion worth of gold bullion at the HSBC Bank in New York City, according to Karen Adler, a spokeswoman for the organization. When Abbott signed the gold depository bill into law in June 2015, he declared that the opening of a state-run facility would allow Texas to 'repatriate' the nonprofit's gold supply."
U.S. Jobs Outnumber Unemployed! -Fox Business
Swiss America Chairman Craig R. Smith discusses the latest upbeat employment news and explains how and why president Trump is successfully restoring confidence back to American citizens. Mr. Smith also weighs in on a possible 'Tax Cut 2.0' and what needs to be done to save Social Security from its potential demise. Watch video
FAANG Bubble Statistics -Econ Matters
"Everyone has piled into the same trade for long enough that we have an acronym for this herd mentality in FANG, then expanded to FAANG, and other derivatives to include hot stocks like Microsoft and Nvidia. The lack of imagination on behalf of investors, that they think these are still fairly priced stocks that represent good value in the market after everyone and their uncle has crowded into the same stupid trade is beyond stupidity. So is your strategy: Be the last in, and the last out of this trade - the the ultimate bagholder!....At this rate, we should just scrap the indexes, since the entire market is basically 10 stocks, and just label them Apple, Facebook and Amazon....In short when we look at some of the recent gains in these stocks after already being pushed up to ridiculous bubble levels for years, it is quite staggering just how many bagholders there are who are going to lose a lot of money on the downside in the unwinding/crash of this trade....Amazon could fall $350 in a flash crash day, Apple could gap down $50 easily with a miss at these nosebleed levels as investors all run for the exits at the same time."
Ron Paul: "A Cashless Society Is Very, Very Dangerous" -Zero Hedge
"As the global war on cash continues to accelerate, outspoken libertarian Ron Paul summarizes the effort to eliminate cash perfectly - as an 'attack on individual freedom.' Restricting and discouraging the use of cash, suggests Paul, has always been a goal of statists as a means to reduce individuals’ independence. 'A cashless society is very, very dangerous,' continues Paul....Consider just who is gaining from this war on cash. 'The banks, of course, are charging as many fees as they can think of. More importantly, your cash card leaves a wide data trail detailing your buying preferences, used by merchants and advertisers to entice you into more buying. How convenient. These thoughtful companies even offer reward points every time you use the card. Cash offers the ultimate in privacy. Your cash card might as well be a walking billboard. The government, of course, is extremely interested in your spending habits. The taxing authorities use an electronic money trail to monitor your spending and ensure against tax evasion. In addition, cards save the government the cost and trouble of printing and storing additional currency.'"
For the latest developments in the ongoing 'war on cash' request a FREE copy of our 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction. Discover the secrets behind the larger worldwide scheme to stop the private use of cash so that every single transaction can be controlled, tracked and taxed.
6.6.18 - State Collects $4M in Illegal Taxes
Gold last traded at $1,306 an ounce. Silver at $16.69 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks rose as bank shares rallied on higher interest rates, while Boeing climbed up.
Gold steady, weaker dollar provides support -Reuters
"Gold steadied on Wednesday, supported by a weaker dollar and trade tensions as the market looked ahead to an expected U.S. rate hike next week when the Federal Reserve meets....'Investors are sitting on the fence, they only want to be involved when we break out of the range,' said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen....The case for hiking U.S. interest rates next week was bolstered on Tuesday when data showed U.S. services sector activity accelerated in May and job openings rose to a record high in April....Once the rate decision has been taken, gold is likely to move higher, Hansen said. 'There is potential for gold to follow the same pattern it's taken after recent rate hikes: defensive before, only to rally afterwards.'"
Social Security Expected to Dip Into Its Reserves This Year -Wall Street Journal
"The Social Security program's costs will exceed its income this year for the first time since 1982, forcing the program to dip into its nearly $3 trillion trust fund to cover benefits. This is three years sooner than expected a year ago, partly due to lower economic growth projections, according to the latest annual report the trustees of Social Security and Medicare released Tuesday....The trust fund will be depleted in 2034 and Social Security will no longer be able to pay its full scheduled benefits unless Congress takes action to shore up the program's finances. Without any changes, recipients then would receive only about three-quarters of their scheduled benefits from incoming tax revenues. The report also said that Medicare's hospital insurance fund would be depleted in 2026, three years earlier than anticipated in last year's report. Absent changes, the program then would be able to handle 91% of costs. The nation's aging population is boosting the costs of Social Security and Medicare, while revenue gains lag due to slower growth in the economy and the labor force. About 61.5 million people receive retirement or disability benefits from Social Security and 58.4 million receive Medicare....Congress has debated ways of bolstering the programs' finances, but hasn't agreed on what to do."
State collects $4 million in illegal taxes, won't give it back -WorldNetDaily
"Barack Obama's weaponization of the Internal Revenue Service, which admitted it targeted non-profits based on their conservative and Christian beliefs, only increased feelings of antipathy toward the federal agency. But there also are state tax agencies across the United States, and Pennsylvania's has given its citizens another reason to despise tax collectors. After all, they collected taxes that weren't due. Then they kept them. And even went to court to get an order saying they didn't have to be returned. The case now is before the U.S. Supreme Court, where Nextel Communications of the Mid-Atlantic is pointing out that 'the Supreme Court of Pennsylvania agreed with a taxpayer that a collection of state taxes violated a long-settled understanding of the state constitution.' Yet, it 'expressly refused to grant the taxpayer any relief,' in apparent violation of the U.S. Constitution's Due Process clause....The company says the state's failure to address due process alone merits review by the Supreme Court."
David Stockman: Stocks will plunge 50% in this 'daredevil market' -CNBC
"President Ronald Reagan's Office of Management and Budget director blames a bull market that's getting longer in the tooth - paired with headwinds ranging from President Donald Trump's leadership to fiscal policy decisions to questionable earnings. 'I call this a daredevil market. It's all risk and very little reward in the path ahead,' David Stockman said Tuesday on CNBC's 'Futures Now.' 'This market is just way, way over-priced for reality. The S&P 500 could easily drop to 1,600 because earnings could drop to $75 a share the next time we have a recession,' Stockman warned. 'We're about eight or nine years into this expansion. Everything is crazily priced. I mean the S&P 500 at 24 times at the end, tippy top of a business cycle.' One of his biggest gripes with the bulls is the notion that President Donald Trump's tax cuts are providing a fundamental lift to stocks. 'These tax cuts are going to add to the deficit in the 10th year of an expansion. It's just irresponsible crazy,' he said. 'It's all going to stock buybacks and M&A deals anyway. That doesn't cause the economy to grow. It's just a short-term boost to the stock market that doesn't last.'....'When the catalyst finally comes, it's hard to say,' Stockman said. 'No one can ever define what the black swan is because that is why it's called a black swan.'"
6.5.18 - Smart Money's Bailing Out of Markets
Gold last traded at $1,302 an ounce. Silver at $16.54 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying and a weaker dollar. U.S. stocks declined as worries about U.S. trade relations and tariffs on steel lingered.
Gold rebounds and approaches $1300 -FX Street
"Gold bounced to the upside, despite USD strength and climbed to $1,297/oz hitting a fresh daily high. The yellow metal rose from $1,290 supported by a decline in equity prices and yields. In Wall Street the DOW JONES failed to hold to gains and was down 0.31%. Despite upbeat data, US yields were modestly lower, favoring the upside in gold. After losing ground for three consecutive days, gold is up on Tuesday. It is approaching the $1,300 area where the 20-day moving average stands. A daily close above could signal more gains ahead for the metal."
Hallmark of an Economic Ponzi Scheme -Hussman/Hussman Funds
"Consider two economic systems. In one, consumers work for employers to produce products and services. The employees are paid wages and salaries, and business owners earn profits. They use much of that income to purchase the goods and services produced by the economy. They save the remainder. A certain portion of the output represents 'investment' goods, which are not consumed, and the portion of income not used for consumption - what we call 'saving' - is used to directly or indirectly purchase those investment goods....The second economic system is dysfunctional. Consumers work for employers to produce goods and services, but because of past labor market slack, weak bargaining power, and other factors, they are paid meaningfully less than they actually need to meet their consumption plans....Meanwhile, lopsided corporate profits generate a great deal of saving for individuals at high incomes, who use these savings to finance government and household deficits through loans....The first of these economic systems is self-sustaining: income from productive activity is used to purchase the output of that productive activity in a circular flow....The second of these economic systems is effectively a Ponzi scheme: the operation of the economy relies on the constant creation of low-grade debt in order to finance consumption and income shortfalls among some members of the economy, using the massive surpluses earned by other members of the economy....The hallmark of an economic Ponzi scheme is that the operation of the economy relies on the constant creation of low-grade debt in order to finance consumption and income shortfalls among some members of the economy, using the massive surpluses earned by other members of the economy. The debt burdens, speculation, and skewed valuations most responsible for today's lopsided prosperity are exactly the seeds from which the next crisis will spring."
The Smart Money's Bailing As Market Complacency Surges -Zero Hedge
"The turbulence throughout the markets last week - thanks to Italy - has given investors their first taste of a frothy summer. Especially the 'smart money'- they’re bolting for the exits...The Smart Money Flow Index (SMFI) is a leading-indicator in markets. That means when the SMFI drops sharply, usually the equity markets are right behind it. And we haven’t seen the SMFI drop this much since the Great Recession of 2008 and the 2001 Recession. Last week I wrote about the forgotten economist - Hyman Minsky - and his excellent work about the Financial Instability Hypothesis (FIH), which details how an economy shifts through three stages. From lowest risk to highest risk the stages are: hedged, speculative, and ponzi. But probably the most important takeaway from the FIH is this simple sentence...'The periods of low volatility and market calm are the seeds for high volatility and market chaos in the future; then back the other way around.'"
Will slow wage growth create another consumer debt crisis? -NBC News
"Although the labor market added a better-than-expected 223,000 jobs in May, robust wage growth again proved elusive with an increase of just 2.7 percent on an annualized rate. An accumulation of recent data indicates that some Americans are starting to struggle financially, suggesting that workers may have added debt to their household balance sheets because they expected to be earning more by now. Delinquencies have ticked up in retail credit cards, which typically have a lower bar for acceptance than general-purpose cards, and in car loans to people with subprime credit scores. The percentage of private-label retail credit card bills unpaid for 60 days or more is 4.65 percent, a seven-year high, according to credit bureau Equifax, and the amount of outstanding auto loan debt unpaid for 60 days or more has risen by more than 5 percent year on year. Consumers added $63 billion in debt in the first quarter of this year and owed a collective $13.21 trillion as of March 31, according to the Federal Reserve, and more of them appear to be having trouble servicing that debt: According to a separate Fed report, the number of people who have fallen behind on their credit card payments for 90 days or more has increased 'notably' from a year ago, and car loan payments overdue by 90 days or more have been on the rise for more than five years....The problem is that the recovery's economic gains haven’t been equally shared among Americans, said Mark Hamrick, senior economic analyst for Bankrate.com. Six months into a historic tax cut for businesses, workers aren't seeing the kinds of pay increases its political backers said would follow. A Morgan Stanley survey found that just 13 percent of this corporate windfall is going to worker pay, benefits or other compensation."
6.4.18 - Customs Seizes $58,000 Cash, Without Cause!
Gold last traded at $1,297 an ounce. Silver at $16.43 an ounce.
NEWS SUMMARY: Precious metal prices were steady Monday amid dollar weakness and lingering trade war concerns. U.S. stocks traded higher as Apple led the technology sector to a record high.
Gold May Hit $1,400 in '19 on 'Powerful Fuel' of Weak Dollar -Bloomberg
"Gold may have posted two straight months of declines, but is set to shrug off the blues and rise in 2019 as the dollar weakens. The precious metal will start to rebound in the final quarter of this year to average $1,375 an ounce in the last three months of next year and could touch a high of $1,400, said Bart Melek, global head of commodity strategy at TD Securities in Toronto. That's a level last seen in 2013....'As time moves on, there'll be less and less reasons to get into the U.S. dollar, which will likely reverse some of the flows,' said Melek, who's among speakers at a precious metals conference in Singapore this week. 'We do ultimately think that as we move into 2019, the U.S. dollar will weaken, which is a very powerful fuel for the gold complex.'....'Looking forward, the conditions for the gold market look more positive as the dollar rally becomes more stale and fiscal factors start to erode the dollar’s strength,' he said, also adding that the Fed's tightening cycle may be coming to an end next year."
A 64-year-old put his life savings in his carry-on. U.S. Customs took it without charging him with a crime. -Washington Post
"A 64-year-old Cleveland man is suing U.S. Customs and Border Protection after agents strip-searched him at an airport in October and took more than $58,000 in cash from him without charging him with any crime, according to a federal lawsuit filed this week in Ohio....Customs agents seized the money through a process known as civil asset forfeiture, a law enforcement technique that allows authorities to take cash and property from people who are never convicted or even charged with a crime. The practice is widespread at the federal level. In 2017, federal authorities seized more than $2 billion in assets from people, a net loss similar in size to annual losses from residential burglaries in the United States. Customs says it suspects that the petitioner in the case, Rustem Kazazi, was involved in smuggling, drug trafficking or money laundering. Kazazi denies those allegations and says that the agency is violating federal law by keeping his money without filing any formal complaint against him. Kazazi is a retired officer with the Albanian police who relocated with his family to the United States in 2005 after receiving visas through the State Department's lottery program. They became U.S. citizens in 2010. After several years away, Kazazi planned a trip to Albania last fall to visit relatives, make repairs on a family property and potentially purchase a vacation home."
News stories like this (both above and below) will come as no surprise to our regular readers. Starting in 2014 in our book, Don't Bank On It!, we have been exposing similar stories of civil asset forfeiture abuse. Our newest 2018 White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction, explains how they fit into a larger worldwide scheme to stop the private use of cash so every transaction can be controlled, tracked and taxed.
Australia Bans Cash For All Purchases Over $7,500 Starting July of 2019 -MSN
"Australia's Liberal Party government has announced that it will soon be illegal to purchase anything over $10,000 AU ($7,500 USD.) The government said it's, 'encouraging the transition to digital society,' and cracking down on tax evasion. The ban starts on July 1, 2019 and any payment over $10,000 will have to be made by check or credit/debit card. The goal is to drum up about $3 billion in new tax revenue over the next four years. One of the biggest targets will be the illicit tobacco trade."
Media Giants Are Becoming Leftist Tax Targets -Pontification Blog
"'The Revolution devours its children,' wrote journalist Jacques Mallet du Pan, who lived during the French Revolution. Its terror began by beheading the king and queen, then those accused of plotting against the Revolutionary leader Maximilien Robespierre, and near its end the mobilized mob hysteria guillotined Robespierre himself. In the fanatic hate of today’s 'Resistance' mobilized against President Donald Trump, which has included simulated beheadings, that same 'fearful symmetry' is now emerging. Veteran Democratic politicians know it is time to move to the political center and offer realistic compromise solutions, but their core voters were mobilized by hatred against Trump and will accept no compromises. The Democratic Party's own hate-filled demagoguery has made rational democracy impossible. The Democrats' comrades in the new media want leftist candidates to win, but, with delicious irony, starting on the local level such politicians now seem bent on devouring these rich media giants. Google and its company YouTube gave massive help to Barack Obama's reelection in 2012 and to Hillary Clinton's failed campaign in 2016. It has relentlessly biased its media information to the left, most recently this May by identifying the 'ideology' of the California Republican Party as 'Nazism.'....Such leftist media giants ignore our cries for fairness and balance as they push global socialist Revolution and try to behead elected conservatives. But now greedy leftist politicians are turning against them to feed the angry mob of welfare recipients who demand more free goodies."
6.1.18 - How Gold Has Outperformed Stocks
Gold last traded at $1,293 an ounce. Silver at $16.41 an ounce.
NEWS SUMMARY: Precious metal prices eased back Friday as upbeat job data boosted the dollar. U.S. stocks rose as a stronger-than-expected employment report showed an increase of 223,000 jobs in May.
Where The Jobs Were In May: Who's Hiring And Who Isn't -Zero Hedge
"After years of monthly payroll reports padded with excessive minimum wage waiter, bartender, educator or retail worker jobs, today's May jobs report was not only impressive in its top-line beat and which was the record 92nd straight month of US job growth, coupled with the strong wage growth, which at 2.7% came in higher than expectations, not to mention the record surge in full-time jobs, it also showed surprising strength in most components even if some negative surprises were also present....In May we saw a continuation of many of the trends observed last month: Continued strength in Goods Production: Mining (+5.5K), Construction (+25K) & Manufacturing (+18K). Trade & Transportation Rebounded: Wholesale (+4.2 after a big drop last month), Retail (+31.1K), and Truck Transportation (+6.6K). Here the surprise was that just 6.6K trucking jobs were added, following complaints from the major trucking employers, all of whom have noted they can't find enough people to hire, which suggests there may be an upward revision next month."
How Gold Has Outperformed Stocks In The Last Few Decades -WallStreet.com
"Gold has been considered a safe investment for years. For that reason people have been buying gold for decades; it's considered one of the best storehouses of value. When the 'investment craze' hit the market, stocks were most investors' first preferred option. This has more to do with the fact that the stock market back then was something new and investors were interested in knowing more about its capabilities. However, over the years they realized gold is a better and safer investment option with higher potential. Physical gold and stocks have been pitched against each other for decades, and there seems to be a connection between the two. However, the trend keeps on changing and largely depends on the time period we are considering. For example, if we look at the past 45 years, we'll see that the yellow metal has outperformed stocks and even bonds; however, the past 30 years show that stocks did better than gold. But, looking at the numbers from past 15 years it can be safely concluded that gold has outperformed both stocks and bonds....Gold has increased +669% in the last 40 years (gross), doing better than inflation (328%), cash (535%), and housing (598%). Gold has consistently ranked in the top 3 best assets since 2000."
NOTE: Most investors today are convinced by Madison Avenue ads that stocks are a better place to have their money than physical gold. However, over the long-term, this has not always been true. The Yahoo chart below compares the DJIA with Gold between 1/10/2005 and 6/1/2018. Gold prices are up 278% vs. DJIA at 225%. This means that over the last 13 1/2 years gold owners would have beat Dow stock holders by 23% - without the stress of market volatility.
Italy's Establishment Runs Out of Tricks -Weekly Standard
"A political establishment of long standing always suffers from a kind of mental illness. No matter how unambiguously it is repudiated or how joyously it is driven from office, its members will continue to remember the episode as accidental, temporary, and unjust. This week in Italy such arrogance nearly provoked a financial panic and an international crisis. In elections in March, two parties relatively new to the national scene had blown away all their establishment rivals and taken a majority of the seats in the national assembly. Because one of them, the League, was a nationalist party of the sort associated with France's Marine Le Pen, while the other, the Five Star Movement (M5S), was founded by a madcap comedian, observers snickered at how entertaining it would be to watch these two collections of losers try to cobble together a coalition. They wound up doing fine, though, because they have one big thing in common. They both hate the multinational European Union, which has hamstrung most of the continent's economies and stripped its member states of much of their sovereignty....On Monday, May 28, there was the beginning of a run on Italy's bonds. The market was more nervous about the 'responsible' Cottarelli than it had been about the 'irresponsible' Salvini and Di Maio. The reason is not far to seek. Once Salvini and Di Maio's majority had been denied the right to form a government on the grounds that one of its ministers was a europhobe, the impending election appeared to be a referendum on the common European currency. It would be like Brexit: Exitaly was the snappy portmanteau making the rounds....The problem is not that parties have been getting more obstreperous but that Europe is getting harder to govern."
How the Government Became a Deep State Puppet -Bonner/Bonner And Partners
"The difference between the next crash and the last two is that this time, the feds have less room to maneuver. At the end of an expansion cycle, like the one America has had for almost ten years, the federal government should be running a surplus....Meanwhile, over at the Fed, another knuckleheaded experiment is going on. It has left real rates (adjusted for inflation) below zero for nearly a decade, even though a recovery, such as it was, began in 2009. This, too, is unprecedented… and almost surely disastrous....In a small government, citizens can run the show. They know what is going on, and have a say in what happens next. In a global Deep State Empire, on the other hand, citizens play largely symbolic roles. They vote, but their votes don't really matter. They voice their opinions, but no one really cares what they think....The federal government is going broke. The welfare state can't be cut back (too many retiring voters). The warfare state won't be cut back (too many powerful cronies). Together, they will bankrupt the nation. But in Congress, the subject never even comes up....The elite insiders - in business, government, academia, religion, and media… left and right… whether it is the centralized government of Louis XVI or the post-World War I USA… Republican or Democrat - become parasites."
5.31.18 - Deutsche Bank Shares Crashing
Gold last traded at $1,304 an ounce. Silver at $16.45 an ounce.
NEWS SUMMARY: Precious metal prices steadied Thursday on month-end trade settling and a flat dollar. U.S. stocks fell after the U.S. announced tariffs on Mexico and Europe, increasing trading tensions.
Spinning Italy's Distressed Debt Into Gold -Holmes/Forbes
"In the past, the fifth month has provided an attractive buying opportunity....This particular May, the price of gold also had to contend with a stronger U.S. dollar, which appreciated against the euro as political strife in Italy spread throughout the entire continent. Priced in euros, then, gold is performing well, having closed at a nearly one-year high of 1,125 euros on May 29....Italy's appetite for change fits into what I see as a global trend right now. Based on what I've heard during my travels, middle class taxpayers, in the U.S. and elsewhere, are increasingly fed up with special interests and entrenched bureaucrats....Similarly, it's possible that Italy could end up being next to say addio to further European Union (EU) control and take back its own economic and political destiny....The country's public debt currently stands at 132 percent of GDP, and ratings agencies are reviewing a possible downgrade of its credit rating. Should it default on its billions of dollars in loans, a chain reaction could quickly spread to financial markets all over the world...for these reasons I think it’s prudent to have a 10 percent weighting in gold."
URGENT: Remember Lehman Brothers? -Carrillo/SATC
"Deutsche Bank is the world's 4th largest bank which just laid off 10,000 employees this past week. Their stock is now plummeting sharply this week, down 12% just in the past two days alone, along with its revenues. News sources report, "Deutsche Bank Has Credit Default Swap Exposure of 2x Global GDP." If marketeers run on the derivatives book, nothing will be able to save it. This would be a high impact event. Before the 2008 crisis, Deutsche Bank's price was a $120.00 a share. You may remember that the 2008 panic began when Lehman Brothers' stock price broke below $10.00 a share. Today at $11.27 per share, Deutsche Bank stock is $6.00 lower than it was after the 2008 credit crisis. We could see a full blown stockholder panic if and when the stock breaks below $10.00, which was the Lehman Brothers' stockholder panic trigger. Deutsche Bank carries enough derivatives to collapse the entire financial system. How big would the impact be to the U.S. and global financial system? Twice as big as Lehman Brothers....Do you own wealth insurance? Buy gold and buy silver, before it's too late! Gold prices increased by 110% after Lehman Brothers collapsed - and gold was the only asset class that did increase!"
Craig R. Smith Comment: Arthur Levitt, former chairman of the SEC, said Deutsche Bank should now be treated like a “penny stock” on Bloomberg today. Remember, Deutsche Bank passed the “stress tests” with flying colors because of the capital they hold. Yet that capital could disappear overnight if other banks call in their loans. Still think the banking system is "sound as a dollar"? Read Mr. Smith's Special Report, Don't Bank On It!
Deutsche Bank Crashes After Fed "Secretly" Put US Operations On "Troubled" Watchlist -Zero Hedge
"It was already a terrible week for Germany's largest bank, when the Italian turmoil sent its stock price below €10 for the first time since the bank's existential crisis in the fall of 2016, and it just got worse this morning, following reports that the Federal Reserve has designated Deutsche Bank U.S. operations to be 'troubled condition' which the WSJ said was a rare censure for a major financial institution and is being reflected in its price this morning, which is now down over 5%, at €9.35, and rapidly approaching the all time low of €8.834 hit in September 2016 when speculation was rife that Germany would bail out Europe's largest lender. As the WSJ reports, the Fed's downgrade took place 'secretly' about a year ago, and hasn't been previously made public until today. 'The troubled condition status - one of the lowest designations employed by the Fed - has influenced moves by the bank to reduce risk-taking in areas like trading and lending to customers'....The Fed downgrade also landed the bank's FDIC-insured subsidiary, Deutsche Bank Trust Company Americas, on the FDIC's 'Problem Banks' list of at-risk institutions....Judging by the market's reaction, which following the news has sent the stock crashing to new multi-year lows..."
Here Comes Another Global Financial Crisis -The Week
"Is another global financial crisis on the horizon? Investors are increasingly worried that an escalating political crisis in Italy could lead to a populist, euroskeptic government taking power. As a result, there's rising uncertainty about whether the country might eventually abandon the euro currency zone or default on its giant debt pile. To make things worse, the Trump administration continues to toy with the idea of a trade war with Europe and China. That would be the last thing the global economy would need if the Italian situation deteriorates further. Debt crises and trade wars are a toxic combination....Italy is the eurozone's third-largest economy, 10 times the size of Greece's. It also has the world's third-largest sovereign debt market, some $2.7 trillion. Only Greece has a higher public debt-to-GDP ratio in the eurozone. My AEI colleague Desmond Lachman, a former International Monetary Fund official and Wall Street emerging market strategist, argues that Italy's troubles have the potential to roil the global economy much like the 2008 Lehman bankruptcy. (The 10th anniversary is coming!) America wouldn't be spared. Italy is a mess. It's too big to fail, but also too big to bail out. To a large extent, it will need to save itself though economic reforms that boost its lagging productivity and reduce its debt load as a share of the economy."
5.30.18 - "Tax the Poor" -Mayor Bloomberg
Gold last traded at $1,306 an ounce. Silver at $16.54 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on safe-haven buying and a weaker dollar. U.S. stocks rose as financial stocks rebounded from steep losses in the prior session and Italian credit fears eased.
U.S. GDP Growth Revised Down to 2.2% Rate in First Quarter -Wall Street Journal
"Gross domestic product - the dollar value of all goods and services produced in the U.S., adjusted for inflation - rose at a 2.2% seasonally adjusted annual rate in the first quarter, the Commerce Department said Wednesday. That was down from last month’s initial estimate of 2.3% growth; economists surveyed by The Wall Street Journal had expected an unrevised 2.3% reading....Forecasting firm Macroeconomic Advisers last week projected GDP would expand at a 2.9% annual pace in the second quarter, and the Federal Reserve Bank of Atlanta’s GDPNow model predicted 4.0% growth....The fourth-quarter decline and first-quarter rebound may have been exaggerated by tax cuts and other factors....Consumer spending accounts for more than two-thirds of total U.S. economic output. Wednesday’s report showed personal-consumption expenditures climbed at a 1.0% annual pace in the first three months of the year, down slightly from an initially estimated 1.1%. It was the weakest quarter for consumer spending in nearly five years."
Three Long-Term Reasons to be Bullish on Gold -Moneyweek
"This year's 'gold standard' of gold-related research has just come out....Every year, Ronald-Peter Stoeferle and Mark Valek at Incrementum AG, a Liechtenstein-based investment and asset-management company, put together an exhaustive report into the state of gold and gold-related markets. It’s known as In Gold We Trust....The report argues that we are in the early stages of a new bull market for gold. First, Incrementum notes that central bank monetary policy is changing. What was quantitative easing (QE) is now quantitative tightening (QT)....Incrementum also observes that 'in the great tug-of-war between inflationary and deflationary forces, inflationary forces have gained the upper hand in the course of the past year'...If wages go up, and with high employment they might at last, inflation will self-reinforce. Inflation should be good for gold....Incrementum's second changing tide is in the global monetary order, what it calls 'de-dollarisation'. According to the report, 'the creeping loss of the hegemonic status of the US dollar as the senior global reserve currency could have far-reaching consequences for the US.'....Incrementum's third main theme – and this is what presents the biggest threat, in my view, to US dollar hegemony – is the 'technological turn of the tide'....Money is changing. From cryptocurrencies to national currencies to something as trivial as reward points, we are moving into a Hayekian era of multiple currencies. 'Gold and cryptocurrencies are friends, not foes' says Incrementum."
Let's "Tax the Poor" Says Mayor Bloomberg -Pontification Blog
"Former New York City Mayor Michael Bloomberg, one of America’s richest billionaires, now wants to heavily tax poor people. Such taxes, says Bloomberg, would be a 'good thing' for those already in poverty. Like most self-righteous leftist Progressives, Michael Bloomberg is paternalistically proposing what economists call 'Pigovian' taxes, designed not only to enrich government but also to impose social engineering. He wants to use taxes as back-door regulation to impose his desired social policies, as proposed by English economist Arthur Pigou, who died in 1959. If poor people are dying from the health effects of smoking or of drinking sugary soda pop, as Bloomberg believes, then they will be able to buy and consume far less of these harmful products if a heavy tax is added to soda's and tobacco's price....Pigovian subsidies are behind tax breaks in so-called 'enterprise zones' in economically-disadvantaged neighborhoods; trouble is, to sustain an enterprise zone, government needs to make the zones around it less-than-optimally-friendly to business and enterprise." Full Story
The Strange Failure of the Educated Elite -Brooks/New York Times
"Meritocracy is a system built on the maximization of individual talent, and that system unwittingly encourages several ruinous beliefs: Exaggerated faith in intelligence. Today's educated establishment is still basically selected on the basis of I.Q. High I.Q. correlates with career success but is not the crucial quality required for civic leadership. Many of the great failures of the last 50 years, from Vietnam to Watergate to the financial crisis, were caused by extremely intelligent people who didn't care about the civic consequences of their actions. Misplaced faith in autonomy.The meritocracy is based on the metaphor that life is a journey. On graduation days, members for the educated class give their young Dr. Seuss' 'Oh, the Places You’ll Go!' which shows a main character, 'you,' who goes on a solitary, unencumbered journey through life toward success. If you build a society upon this metaphor you will wind up with a society high in narcissism and low in social connection. Life is not really an individual journey. Life is more like settling a sequence of villages. You help build a community at home, at work, in your town and then you go off and settle more villages....Misplaced notion of the self. Instead of seeing the self as the seat of the soul, the meritocracy sees the self as a vessel of human capital, a series of talents to be cultivated and accomplishments to be celebrated....Inability to think institutionally...Some institutions, like Congress and the political parties, have decayed to the point of uselessness, while others, like corporations, lose their generational consciousness and become obsessed with the short term....Misplaced idolization of diversity. The great achievement of the meritocracy is that it has widened opportunities to those who were formerly oppressed. But diversity is a midpoint, not an endpoint...Diversity for its own sake, without a common telos, is infinitely centrifugal, and leads to social fragmentation."
5.29.18 - Calling All Gold Bulls -Barrons
Gold last traded at $1,306 an ounce. Silver at $16.39 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday - despite a stronger dollar - as Italy woes jolted the global financial markets. U.S. stocks fell sharply amid political turmoil in Italy and ongoing difficult trade talks with China.
Red Flags Are Suddenly Soaring in Markets -Wall Street Journal
"Italy's bond market is in meltdown, its politics in crisis after President Sergio Mattarella blocked the formation of an antiestablishment government and its credit rating under threat. That is all now making bigger waves: Europe's deepening troubles and disappointing global growth signals are sparking a sudden rally in haven bonds like U.S. Treasurys. Risk aversion is back. The moves are notable because haven bond yields have until now shown little reaction to the creeping tide of unsettling news that has emerged in 2018. The overwhelming focus has been on how far and fast yields might rise, particularly in the U.S. Instead they are falling rapidly. The 10-year German Bund yield now stands at just 0.19%, more than halving in the past two weeks and its lowest since early 2017....Italian bonds and stocks are just the latest in a string of risk-seeking trades that have run into trouble in 2018...The market ride is set to get bumpier."
Calling All Gold Bulls -Barrons
"Has gold lost its luster in an age of cryptocurrencies and high-powered tech giants? Joe Foster doesn't think so. He has been at the helm of the VanEck International Investors Gold fund since 1998, and has seen plenty of ups and downs for the precious metal during his tenure. Now, he says, is the right time for gold to break out of its current narrow trading range - and he cites numerous factors, from the severity of the recent bear market in gold to geopolitical uncertainty and the aging bull market in equities. He thinks gold will test the $1,400 level in the second half of the year....Barrons.com: Why should investors be bullish on gold right now?....Foster: We are seeing elevated levels of geopolitical risk, a lot of uncertainty around the Trump presidency, and more recently there are early worries of inflationary pressures. In the longer term, in my view, we are in a late-in-the-cycle economy, and these cycles don't last forever. In the next year or two, we are going to be faced with an economic downturn and probably a general stock market downturn that will bring out a lot of the warts in the financial system - and that could propel gold much higher."
Soros Sees New Global Financial Crisis Brewing -Bloomberg
"A surging dollar and a capital flight from emerging markets may lead to another 'major' financial crisis, investor George Soros said, warning the European Union that it's facing an imminent existential threat. The 'termination' of the nuclear deal with Iran and the 'destruction' of the transatlantic alliance between the EU and the U.S. are 'bound to have a negative effect on the European economy and cause other dislocations,' including a devaluing of emerging-market currencies, Soros said in a speech in Paris on Tuesday. 'We may be heading for another major financial crisis.'....'Everything that could go wrong has gone wrong,' he said, citing the refugee crisis and austerity policies that catapulted populists into power, as well as 'territorial disintegration' exemplified by Brexit. 'It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality,' he said. Soros's proposed remedy for some of the ills facing Europe is an EU-funded Marshall Plan for Africa, worth about 30 billion euros ($35 billion) a year, which would ease migratory pressures to the continent."
Study: Some public pensions funds could run dry in downturn -CBS News
"Many pension funds for public workers already owe far more in retirement benefits than they have in the bank, and the problem will only grow worse if the economy slows down, according to a report released last week. The study from The Pew Charitable Trusts found that the New Jersey and Kentucky public pension funds are in such perilous shape that they risk running dry. 'Even after eight years of economic recovery - eight straight years of stock market gains - the public pension plans are more vulnerable than they've ever been to the next recession,' researcher Greg Mennis said in an interview....Notably absent from the report was California, which has the two largest public pension funds in the nation....California Gov. Jerry Brown suggested earlier this year that when a recession hits, pensions 'will be on the chopping block.'"
5.25.18 - Gold is Back as Geopolitical Tensions Rise
Gold last traded at $1,302 an ounce. Silver at $16.53 an ounce.
NEWS SUMMARY: Precious metal prices consolidated recent gains despite a stronger dollar. U.S. stocks traded lower as geopolitical uncertainty weighed on sentiment ahead of the Memorial Day holiday weekend.
Gold is back: The rise in geopolitical tensions boosts precious metal prices -CNBC
"Gold prices just had their best day in more than a month as renewed tensions with North Korea pushed investors into less risky assets. Trying times call for the safety trade, says one market watcher. 'It makes sense to hold it as a pure play because of all the geopolitical risk that's out there. It's still a calamity hedge,' Mark Tepper, founder and president at Strategic Wealth Partners, told CNBC's 'Trading Nation' on Thursday....Tepper also favors gold as a guard against stagflation, an environment where inflation reaches highs, economic growth slows and unemployment spikes. Tepper's research points to a recession in mid-2020 followed by a period of stagflation. 'During periods of stagflation, on average, the average holding period return of the S&P 500 (and these periods are like one- to six-years long) is 14 percent. The average return of gold in those same periods 85 percent,' said Tepper. Gold prices surged in the 1970s during the period that inspired the term 'stagflation.' Gold prices moved around 15 times higher over that decade, according to World Gold Council data."
The "Axis of Gold" Just Got Stronger -Rickards/Daily Reckoning
"As you're about to see, you can now expect what I call the 'Axis of Gold' to get even stronger. And it has potential to accelerate the demise of the dollar-based international system. The Axis of Gold includes Russia, China, Iran and Turkey...These countries are forming a trading and financial network revolving around gold and are acquiring massive amounts of physical gold to support it. They are steadily moving toward a gold-based balance of payment system. Why is this happening? Well, if you're on the receiving end of American sanctions like Russia, Iran or North Korea, you want a way to work around these sanctions. And gold is a powerful alternative....If a rogue state wants to acquire ballistic missile components or equipment to enrich uranium, it can't buy them through SWIFT, the international payment system. But it can use gold. Gold can't be hacked or traced. Unlike digital money in bank accounts, it can't be frozen. You just put it on a plane or ship and send it to its destination....Now these trading partners have a working payment system to settle trade. They're not using the dollar payment system, or the SWIFT payment system or anything that the U.S. can interdict or even trace. They're in effect bypassing U.S. sanctions by using physical gold. This creates additional demand for gold as these nations acquire gold to preserve wealth and to mitigate their overdependence on the United States. But now they’re actually getting to the stage where a nondollar system is close to becoming a reality."
Petroyuan Is Only The Beginning, Pop Goes The Metals Market -Zero Hedge
"When Hong Kong Exchanges and Clearing bought the London Metals Exchange in 2012 all the speculation was about the effects on gold trading. The primary reason for buying the LME was to obtain its warehouses and ensure a free flow of metals to points east....Now we're seeing the next evolution of the power of owning the exchange. After successfully launching a yuan-denominated gold futures contract last year, the LME is now preparing to issue a range of yuan-denominated metals futures. In other words... Boom....The so-called ‘petroyuan’ oil futures contract, traded on the Shanghai Exchange, has captured more than 12% of the total oil futures market in just under two months. That's incredible. It tells us there was substantial demand for this product because many in the world were tired of being exposed to U.S. dollar currency risk to buy oil....The reason why the petroyuan contract was so immediately successful is because China provided traders with a direct path to convertibility into gold."
Turkey's economy at risk as currency hits record low -CNN Money
"Turkey is trying desperately to halt a collapse in its currency that could trigger an economic crisis just as the country prepares to vote in an election. The lira has plunged about 20% against the US dollar since the start of the year, hurt by a broader move by investors to switch money out of emerging markets and into the United States. But the currency crisis escalated rapidly earlier this month after Turkish President Recep Tayyip Erdogan indicated he wanted to take control of setting interest rates, which he described as 'the mother and father of all evil.' As investors stampeded out of the lira in response, driving it to a record low of about 20 US cents, the Turkish central bank on Wednesday announced an emergency hike in interest rates to 16.5% from 13.5%....Experts are worried that surging inflation could put a drag on economic growth. They're also concerned that money and investment could drain out of the country fast."
*Swiss America will be closed Monday, May 28th, in observance of Memorial Day*
5.24.18 - 40% of Americans Can't Cover $400 Emergency
Gold last traded at $1,304 an ounce. Silver at $16.68 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on dollar weakness and geopolitical worries. U.S stocks slumped following Trump announcement of canceled North Korea summit.
Gold jumps after Trump cancels North Korea summit -Reuters
"Gold prices surged on Thursday, propelled above $1,300 per ounce after U.S. President Donald Trump called off a summit with North Korea, stoking political tensions. Trump canceled the meeting with Kim Jong Un, planned for June 12, even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site....'It's a struggle to find any gold-negative news at the moment,' said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. Gold's safe haven appeal was also burnished after the U.S. launched a national security investigation into car and truck imports that could lead to new tariffs similar to those it imposed on steel and aluminum in March. 'Trade spats are recurring and there's a focus on troubled emerging markets,' Hansen said."
World Banks Are "Swimming Naked" -Bonner/Bonner And Partners
"A Fed report out yesterday tells us that 40% of households cannot raise $400 for an unexpected emergency. One out of five cannot pay its monthly bills. What will happen to these people when interest rates rise and easy credit disappears? Businesses close. Households go broke. The desperate rabble gets roused and the feds panic....Asset prices float on a sea of liquidity... credit pumped into the markets by central bankers. But now, all of the world's major central banks - with the exception, possibly, of the Bank of Japan - are taking their hands off the pump handle or actually draining out cash and credit. The Fed is tightening up… raising its key rates in quarterly 0.25% mini-steps....Patrick Artus, an analyst with Natixis, puts the world's total monetary base at about $24 trillion. It's been growing for the last 10 years at a double-digit rate. This is the money that has kept the Dow riding high and that sent it over 26,000 in January. But now, the 38-year-old tide has turned. Over the next 12 months, Artus estimates liquidity growth of only 3%, not nearly enough to sustain financial markets or the economy. So cover your eyes, Dear Reader. The water is receding. You are about to see some hideous sights."
Why gas prices are so high — and what Americans may have to risk to make them lower -Crudele/NY Post
"Five-buck-a-gallon gasoline in the city - and $3 gas in the burbs. And going higher. That's the news motorists are facing this Memorial Day weekend. And pretty soon, those rising prices will put Americans' appetite for offshore oil drilling to the test. The Trump administration has already proposed drilling off virtually the entire US coast....There's been a problem with oil production in two key parts of the world - Iran and Venezuela - and that's one of the things that's been driving oil prices higher. And one of the best ways to combat those rising prices is to increase oil output somewhere....Now, with Trump and his go-drill, instead of no-drill, policy in the White House, the politics of oil exploration have changed. Will the US buy into that policy?....There really isn't a shortage of oil in the world - not like when OPEC created problems in the 1970s....So what's the problem? With gasoline inventories up, prices should be going down. That’s where financial speculators come in. With Venezuela's economy collapsing and Iran under international pressure because of its nuclear policies, Wall Street is expecting all the production numbers to drop soon."
40% of Americans can't cover a $400 emergency expense -CNN Money
"Can you cover an unexpected $400 expense? Four in ten Americans can't, according to a new report from the Federal Reserve Board. Those who don't have the cash on hand say they'd have to cover it by borrowing or selling something....'This year's survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans,' Federal Reserve Board Governor Lael Brainard said in a press release...many are still struggling. Notable differences remain across race, ethnicity, education levels and geography. The report shows hardship continues for people working to repay college loans, cover emergency expenses and manage retirement savings....'The finding that four-in-ten adults couldn't cover an unexpected $400 expense without selling something or borrowing money is troubling,' said Greg McBride, chief financial analyst at Bankrate.com. 'Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs....The burden is on us as individuals to save for our retirement,' he says."
5.23.18 - Inflation Barreling Toward Consumers
Gold last traded at $1,293 an ounce. Silver at $16.47 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed despite dollar strength ahead of Fed minutes. U.S. stocks fell on renewed China trade worries while awaiting the Fed's latest inflation outlook.
Inflation is coming to the US economy on an 18-wheel flatbed -CNBC
"Multiple signs of inflation in freight-related industries are at or near historical highs, in what could be an early sign that price pressures are building and ready to reverberate around the economy....Recent readings show demand for vehicles skyrocketing, a sign that generally points to inflationary pressures building up in the supply chain. 'It's an indication that there's capacity pressure in the marketplace, that brokers are searching more and posting more in order to find a truck,' said Peggy Dorf, market analyst at DAT. 'This is an indicator that pressure is much higher than it was a year ago.' Every other broad market trend line that DAT posts was up double digits on a year-over-year basis - including the all-important fuel costs, which are up 20 percent....It all adds up to an environment that could prove tricky ahead. The Federal Reserve is continuing to raise interest rates, with at least two more quarter-point hikes expected this year."
The Case for a New International Monetary System -Sheldon/CATO
"Today there are compelling reasons - political, economic, and strategic - for President Trump to initiate the establishment of a new international monetary system....The vision of providing a solid monetary foundation for global free trade was shattered by Nixon's decision to suspend gold convertibility of the dollar....It's time to reassert the primary functions of money as (1) a medium of exchange, (2) a unit of account, and (3) a store of value....In proposing a new international monetary system linked in some way to gold, America has an opportunity to secure continued prominence in global monetary affairs while also promoting genuine free trade based on a solid monetary foundation. Gold has historically provided a common denominator for measuring value; widely accepted at all income levels of society, it is universally acknowledged as a monetary surrogate with intrinsic value. Speaking in February 2017, former Federal Reserve Chairman Alan Greenspan defined gold as the 'primary global currency' and further added, 'We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line'....We make America great again by making America’s money great again."
Will the Trump administration take steps to propose a new international monetary system linked with gold? We hope. Meanwhile, you can take steps to put your family on a PERSONAL Gold Standard starting today, by calling Swiss America at 800-289-2646 or requesting our FREE 2018 Real Money Perspectives newsletter, The Future of Money.
Who sanctions America? -Bonner/Bonner And Partners
"The Dow jumped over 25,000 yesterday. But unless (and until) it can beat the January top of 26,616, we will presume that the primary trend is down. And since primary trends tend to last a long time, we further presume that stocks may be set to slide for the rest of our lives. Big moves take time. Stocks peaked out in August 1929. Inflation adjusted, it was not until 30 years later that they fully recovered. They peaked out again in 1966. And again, it took 30 years for an investor to get his money back in real terms (not including dividends). If this pattern holds, the peak in January won't be seen again until 2048. Good luck with that!....Nature needs balance and harmony. Civilization thrives on limits, restraints, and corrections. 'Too much' upsets it. When there is 'too much,' something has to give. Otherwise, it tips over into chaos and calamity. After the Cold War ended, the U.S. was master of the field… unopposed… on the top of the heap. It could have brought its troops home and cut its military spending in half… or more… restoring some measure of balance with the rest of the world....The 'enemy' was defeated. But military spending still went up, and now sits at $580 billion, up from $355 billion in 1991....Americans are perfectly happy with this situation. Neither Democrats nor Republicans resist."
A Central Banker's Plan for Your Money -Daily Reckoning
"Jim Rickards calls them 'silent dog whistles.' Through these signals, in the frequencies beyond normal human hearing… elites communicate with each other. Their communications are public. But their language can be so thick, so technical - so innocuous - not one in a hundred can crack it open....Hold this information close when you consider the recent speech by a certain Benoit Coeure...This Coeure fellow is a grandee of the European Central Bank (ECB)....Let us...translate: 'Cash limits our options as central bankers. Private citizens should not be allowed so large a voice in monetary affairs. Besides, no one wants it anyway. The time has come to discard cash altogether, as we previously discarded the 'barbarous relic,' gold....Cryptocurrencies are a threat to our control of the monetary system. Unacceptable. We cannot stop the technology, so we must co-opt it. We must ensure that the masses can only use authorized cryptocurrency - ours, that is. We must ban all rival cryptocurrencies.'....The problem comes back to cash. No one will pay the bank to hold their cash, so the masses would withdraw their money from the banking system. Cash therefore prevents us from employing truly negative interest rates. In consequence, cash must go. Once all money is digital, we'll completely capture the monetary system and can make negative interest rates a reality....The elites must ban cash so they can herd us all into the 'digital pens.'...Then when the next crisis strikes, it's off to the digital pen… to be sheared."
In our new White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction, we reveal more of the worldwide scheme to stop the private use of cash and force people into banks and credit cards so that every transaction can be controlled, tracked and taxed.
5.22.18 - Will Cryptos Evolve Into Useful Money?
Gold last traded at $1,292 an ounce. Silver at $16.57 an ounce.
NEWS SUMMARY: Precious metal prices steadied Tuesday on bargain hunting and a flat dollar. U.S. stocks were level as investors paused following a statement by President Trump expressing doubts about the proposed June North Korea summit.
Gold inches higher as dollar rally runs out of steam -Business Day
"Gold edged up on Tuesday from a 2018 low, adding traction as the dollar fell off its five-month high, although risk appetite in the broader financial markets kept the precious metal’s gains in check. The dollar lost momentum following a broad rally prompted by rising US bond yields and the prospect of a resolution to US-China trade tensions. A weaker dollar makes dollar-priced gold cheaper for non-US investors. Washington and Beijing both claimed victory on Monday as the world’s two largest economies stepped back from the brink of a global trade war and agreed to hold further talks to boost US exports to China....'The positive views on the US economy are overdone,' said Philip Newman, director at Metals Focus. 'There are concerns over sizeable US debt, there’s the [US] mid-term elections in November, there's enough out there that could see the dollar eventually weaken and gold prices start to improve through the back end of this year.'"
Cryptocurrencies Likely To Evolve Into Useful Money -Rahn/Washington Times
"Money is most often defined as something that serves as a unit of account, a store of value and medium of exchange. Traditionally, a medium of exchange was such things as coins, paper notes and checks....Most transactions now are electronic - bank transfers, cards, cell phone apps, etc. Physical cash has held on because of perverse government anti-money laundering regulations, which make it almost impossible for many to obtain bank and other financial accounts, and for people to maintain some degree of financial privacy. Cryptocurrencies, such as bitcoin, can serve as a unit of account and a medium of exchange, but not as a store of value - as long as there is nothing more than an algorithm to anchor them....Cryptocurrencies are likely to evolve into more useful money substitutes as issuers began to back them with real assets....What is likely to happen is that a number of entrepreneurs will start issuing cryptocurrencies with real backing (experiments are under way) - precious metals, like gold and silver; industrial commodities, like aluminum; and various baskets of commodities, which may even include services. Eventually, one or several will become global standards...Governments will, of course, fight to maintain their money monopolies, but they are likely to lose because they will be offering an inferior product. A world without government monopoly money will be more free and less costly, with more prosperity."
We agree with Mr. Rahn; the primary problem with cyrptos is the missing 'store of value' component of true money - which in the future could be solved by backing them with physical precious metals. Meanwhile, we think owning physical gold is the best protection from both asset and monetary inflation. Get the facts so you can come up with your own conclusions in our FREE 2018 Real Money Perspectives newsletter, The Future of Money.
"Eight More Years!" -Pontification Blog
"Democracy is supposed to be a peaceful form of change that transfers power from one leader or lawmaker to another not by war, revolution, or assassination, but by society's mutual agreement....But since Mr. Trump's overwhelming victory - 304 Electoral Votes to only 227 for Clinton - she and her media comrades and other unelected members of the Deep State have claimed that Ms. Clinton won, or should have been declared the true winner of, the 2016 election. This has turned into more than a rant against President Trump. It has become a relentless attempt to delegitimize his presidency and remove him from office. It has, as many have observed, become on ongoing coup d'etat, a 'taking down' of our democracy. Media create a social contagion of violence, showing children they can gain fame by shooting others, and glorifying celebrities who advocate ways to assassinate President Trump. If the Left cannot get power with ballots, it will use bullets....Special Counsel Robert Mueller is not investigating a crime, as our legal system requires, but pursuing President Trump in hopes of finding a crime, any crime. The techniques of Mueller's team of mostly-Democratic partisan donors and operatives are those of England's Star Chamber and of Tower of London threats of torture to elicit political confessions against the President. This, too, is not how democracy, or justice, are supposed to work. If and when these anti-democratic leftist furies fail in their effort to undo the 2016 election, voters will rightly ask for justice. How can they reclaim their chosen President’s two stolen years of governing?" Full story
The death of the summer job -US News/CNBC
"Teen employment and summer jobs aren't as popular as they used to be. 'Even though some teens still have summer jobs, the proportion of teens who participate in the labor force during the summer has dropped dramatically,' Teresa Morisi, a branch chief at the Office of Occupational Statistics and Employment Projections at the Bureau of Labor Statistics, wrote in a report published last year looking specifically at teen employment declines. 'In July 2016, the teen labor force participation rate was 43.2 percent, down almost 30 percentage points from the high point of 71.8 percent in July 1978.' That participation rate dropped even further last summer. The BLS estimates the labor force participation rate for 16- to 19-year-olds - a measure that tracks the share of teens either employed or actively looking for a job - stood at 42.5 percent in July 2017....But it's not just summer jobs - teen employment throughout the year is down significantly from where it stood in generations past....40.6 percent of teens from households that bring in between $100,000 and $149,999 annually were employed during 2015 and 2016. But just 23 percent of teens from households that earn fewer than $20,000 each year had jobs during that window....'It is counter-intuitive. You think the teens whose households need the money would work more to get the money. But I think what's playing out here are the effects of social networks and norms within the family and belief about the value of work,' Ross says."
5.21.18 - Mocking the Fed's Definition of Inflation
Gold last traded at $1,290 an ounce. Silver at $16.52 an ounce.
NEWS SUMMARY: Precious metal prices steadied Monday despite a firmer dollar. U.S. stocks rose as trade tensions between the U.S. and China dissipated for the moment.
U.S.-China Trade Truce May Not Last as Differences Remain -Bloomberg
"The U.S. and China declared a truce in their trade dispute over the weekend, but that will prove temporary if the world's two largest economies fail to deliver on their vague commitments to re-balance trade. 'We're putting the trade war on hold,' Treasury Secretary Steven Mnuchin said Sunday after the two sides released a joint statement a day earlier. 'Right now, we have agreed to put the tariffs on hold while we execute the framework.' For now, Mnuchin's cease-fire declaration will soothe the nerves of investors worried that the world's two biggest economies were on the verge of an all-out trade conflict. President Donald Trump had threatened to slap tariffs on up to $150 billion in Chinese imports, and Beijing vowed to respond in kind. Trump on Monday tried to put a positive spin on the negotiations. 'China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products - would be one of the best things to happen to our farmers in many years!' he said in a series of postings on Twitter. 'On China, Barriers and Tariffs to come down for first time.'....Still, there's no guarantee that China’s trade frictions with the U.S. won't re-emerge in the future, a foreign ministry spokesman told reporters Monday at a regular briefing in Beijing."
Mixed Signals on China Trade -Fox Business
Author and Swiss America Chairman Craig R. Smith, VP of Vision 4 Fund Distributors Heather Zumarrago, and Layfield Report CEO John Layfield discuss the recent perceived improvements in the U.S.-China trade negotiations prior to the June 12th U.S.-North Korean summit.
A Warning Signal for Global Stock Markets Is Flashing in Japan -Bloomberg
"Morgan Stanley calls it 'the end of easy,' that witching hour in global stock markets when economic growth is slowing, the Federal Reserve is tightening, and inflation is ticking up. After a long bull run, strategists the world over are getting nervous -- and watching for the top. And over in Tokyo, a warning is starting to flash. A feared rotation is taking hold, as investors dump the shares that propelled the good times, such as industrials and technology companies, in favor of an entirely different class of firms: those needed no matter how bad the economy gets. When investors become less optimistic about the future, the theory goes, that’s where they turn. 'No one can really tell whether global stocks will go into a bear market,' said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management Japan Ltd., 'But when Japanese defensives outperform, it can be a leading indicator.' Utilities, health-care, consumer staples and real estate stocks - all so-called defensive shares - are the top performers of the 11 industry groups in the MSCI Japan Index this year, beating information technology and industrial companies, so-called cyclical shares."
Turkey Repatriates All Gold From The US In Attempt To Ditch The Dollar -Zero Hedge
"After Venezuela, Germany, Austria and the Netherlands prudently repatriated a substantial portion (if not all) of their physical gold held at the NY Fed or other western central banks in recent years, one month ago Turkey announced that it too has decided to repatriate its gold stored in the US Federal Reserve and deliver it to the Istanbul Stock Exchange, according to reports in Turkey's Yeni Safak. And now, according to a report by the Swiss Schweiz am Wochenende, the repatriation is complete with the Turkish central bank withdrawing all of its gold reserves from the U.S. due to the 'tense political situation.'....Turkey's gold repatriation come at a sensitive time for Turkey's currency, the lira, which has been pounded for the past month, and plunged to all time lows against both the dollar last week amid double-digit inflation in Turkey....The NY Fed still holds the world hostage thanks to its custodial holdings of 5,750 thousand tons of foreign-owned gold."
Collapsing Iran and Venezuela Mock the Fed's Definition of Inflation -Tamny/Forbes
"It changes by the day, but Iran’s currency - the rial - is falling. This is inflation. The value of money declines such that holders of it can exchange it for fewer and fewer goods and services. Something similar, but exponentially worse, is happening in Venezuela. A recent article in the Wall Street Journal indicated inflation of 13,000% due to a plummeting Bolivar. If Iran's economy is down, Venezuela's is collapsing. The suffering taking place in both countries rates prominent mention in consideration of the modern view of inflation promoted by the biggest employer of economists in the world: the Federal Reserve. According to the credentialed in its employ, economic growth causes inflation. Yes, more people working and prospering supposedly has a downside. According to the Fed, the downside is inflation. Except that the Fed's view of inflation is 100% backwards. Crucial here is that it's backwards in countless ways. Inflation is always and everywhere a function of a declining currency. It's not a growth phenomenon as the Fed suggests. Fed economists would be wise to visit Iran and Venezuela to understand that inflation has nothing to do with prosperity....The Fed's incorrect inflation definition is rooted in a triple falsehood born of the easily disprovable view inside the bank that consumption drives economic growth....Sad is that economists at the Fed are still hung up on a modern definition of inflation that could have only been divined by economists, and that has nothing to do with reality."
5.18.18 - Mortgage Rates Hit 7-Year High
Gold last traded at $1,292 an ounce. Silver at $16.45 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting despite a firmer dollar. U.S. stocks drifted lower as tensions between the U.S. and China weighed on investor sentiment.
When This Happens, Buy-Bonner/Bonner And Partners
"The Dow was below 8,000 when it hit bottom in the last credit crash in 2009. Now, it's over 24,000....While the Dow has more than tripled, the economy that supports it has not. GDP was nearly $15 trillion in 2008. It's only $20 trillion 10 years later. That is not a triple… not a double… not even a 50% increase. It’s just a 33% boost....Super investor Warren Buffett's favorite indicator is the stocks/GDP ratio....And Buffett says that as long as the value of stocks is 80% (or less) of GDP, investors can safely buy. Today, U.S. GDP is the aforementioned $20 trillion. And the value of all equities is about $28 trillion...That gives us a ratio of 1.42...This is the second highest the indicator has ever been… higher than in 2007. The previous record - set in the first quarter of 2000 - was 1.51, which was nearly twice the long-term average. So here's the big picture: Interest rates are going up. As for assets, our guess is that when the stock market gets a load of what 4% rates will do, it will panic… and drop more than expected, faster than expected. When prices get back in Warren Buffett’s buy zone of 80% (or less) of GDP - which they must sooner or later - stocks will have lost about 45% of today’s value. Dow 13,000, in other words. When they get to that level, buy!"
Pope Calls Derivatives Market a 'Ticking Time Bomb' -Bloomberg
"Warren Buffett once called them 'financial weapons of mass destruction.' Now Pope Francis, of all people, is taking aim at derivatives. In a sweeping critique of global finance released by the Vatican on Thursday, the Holy See singled out derivatives including credit-default swaps for particular scorn. 'A ticking time bomb,' the Vatican called them. The unusual rebuke - derivatives rarely reach the level of religious doctrine - is in keeping with Francis's skeptical view of unbridled global capitalism. 'The market of CDS, in the wake of the economic crisis of 2007, was imposing enough to represent almost the equivalent of the GDP of the entire world. The spread of such a kind of contract without proper limits has encouraged the growth of a finance of chance, and of gambling on the failure of others, which is unacceptable from the ethical point of view,' the Vatican said in the document....Income inequality is a priority concern for Francis, who has made humility a distinguishing feature of his papacy. He refused to live in the opulent Apostolic Palace, choosing a guest house for Church officials near St. Peter’s Basilica instead. He uses an old Ford Focus to get around the Vatican and Rome."
Mortgage Rates Hit Seven-Year High as Ultracheap Era Ends -Wall Street Journal
"Mortgage rates this week jumped to their highest level since 2011, signaling a shift from a period of ultracheap loans to a higher-rate environment that could slow home price appreciation and squeeze first-time buyers. The average rate for a 30-year fixed-rate mortgage rose to 4.61% this week from 4.55% last week, according to data released Thursday by mortgage-finance giant Freddie Mac. The jump this year reflects an abrupt departure from a long period of declining rates that began during the financial crisis. Rates bottomed out in late 2012 at 3.31% and clocked in at 3.99% as recently as January. The spike this year has been faster than many economists predicted as a surging economy, the prospect of wage gains and a steep rise in prices for commodities such as lumber and gasoline stoke inflation worries."
The Fed's Been Lying to Us About Inflation - It's Frighteningly High -Money Morning
"Even by the deeply flawed and misleading Consumer Price Index (CPI), inflation is at the U.S. Federal Reserve's target. By other measures that more accurately portray inflation, it is well above target....Furthermore, we know beyond a shadow of a doubt that, as the Fed raises the federal funds rate target, it will only stimulate more inflation. The Fed will always be behind the curve, because the Fed is always back there pushing the curve ahead....And the fact is that we really have more - much more - inflation than they're telling us. This isn't a mistake, it's not a miscalculation. Rather, it's a deliberate obfuscation....In the past few years, house prices have been inflating – consistently – in the 6% to 7% range, but, you guessed it, that is not included in CPI! It's not even counted in the official measures of 'inflation.'....The housing component of CPI is weighted at roughly 40% of core CPI (excluding food and energy). Simple math tells us if housing was included in CPI, then total core CPI would be 40% of the difference between the OER measure, at 3.4%, and the actual housing inflation rate of between 5.8% and 7%....Had housing prices been included in core CPI, it would never have read below 2%. It would have been in a range of 2.5% to 4.5% over the past five years."
US Birth Rate Hits All-Time Low: What's Behind the Decline? -Live Science
"The number of babies being born in the United States continues to fall, with the birth rate reaching a new record low in 2017, according to a new report from the Centers for Disease Control and Prevention. Last year, about 3.8 million babies were born in the U.S., which is 2 percent lower than the number born in 2016, and the lowest recorded number of births in 30 years, according to the report. Part of the reason for the decline in U.S. birth rates may be that people are in a general state of economic uncertainty, said Karen Benjamin Guzzo, associate director of the Center for Family & Demographic Research at Bowling Green State University in Ohio. Even though the Great Recession technically ended in 2009, people may still feel uneasy about their economic situation; they may be employed but working part time, or going to school and working, or trying to pay off student loans, Guzzo said....In addition, young adults may feel like they haven't met all the milestones they feel they need to reach before having a kid, such as getting a college degree, having a stable income and getting married. 'It takes longer to feel like you're a grown-up,' Guzzo said."
5.17.18 - China's Gold Demand Keeps Rising
Gold last traded at $1,289 an ounce. Silver at $16.48 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Thursday on bargain hunting despite a firmer dollar. U.S. stocks rose as energy stocks were boosted by $80 a barrel oil prices amid Iranian export worries.
Gold Preparing to Launch -Sprott Money
"The positioning of the Money Managers, or 'Funds', in the Gold futures market is at extremes that have typically led to massive rallies in Gold. They are usually net long...when their net long position is sufficiently low, it tends to lead to significant rallies in the price of Gold....We could see a rally of anywhere from 7% to 13% based on prior rallies. At the close of $1288 on Tues, this would mean a rally to somewhere between $1378 to $1455. Sounds good right? But we don't have to rely on positioning alone for such a forecast. Sentiment is a great tool to gauge the direction of all markets, but it works especially well in Gold and Silver markets...It is showing extreme bearishness in Gold right now....In summary, based on positioning, sentiment, technicals, inter-market analysis, Elliott Wave Theory and similar readings prior to previous rallies, Gold is at or close to a low here that is likely to set off a rally to $1360 or higher in the coming weeks."
Europe to ditch US dollar in payments for Iranian oil -RT
"The European Union is planning to switch payments to the euro for its oil purchases from Iran, eliminating US dollar transactions, a diplomatic source told RIA Novosti. Brussels has been at odds with Washington over the US withdrawal from the Iran nuclear deal, which was reached during the administration of Barack Obama. President Donald Trump has pledged to re-impose sanctions against the Islamic Republic. 'I'm privy to the information that the EU is going to shift from dollar to euro to pay for crude from Iran,' the source told the agency. Earlier this week, EU foreign policy chief Federica Mogherini said that the foreign ministers of the UK, France, Germany, and Iran had agreed to work out practical solutions in response to Washington's move in the next few weeks. The bloc is reportedly planning to maintain and deepen economic ties with Iran, including in the area of oil and gas supplies....The Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), was sealed three years ago in Vienna between Tehran and the P5+1 powers (China, France, Russia, UK, US, plus Germany)....Switching to alternative settlement currencies allows both sides to continue trading despite US sanctions."
China Gold Demand Off To Hot Start -Zero Hedge
"It looks to be another boom year for gold. Investors are anticipating a continued demand for the precious metal for the fifth year in a row, driven by geopolitical uncertainties and less-than-strong predictions for the U.S. economy and the U.S. dollar in 2019. In times of economic turmoil, gold has always served as a hedge against the decreased value of stocks or currency. Faced with unusual market volatility, people around the globe are turning to the yellow metal as a haven and safe investment diversifier. The price of gold rose by 14 percent in 2017 and is likely to go higher. While the U.S. dollar is expected to lose some value in 2018, the Euro and other currencies are showing a modest gain....During the first quarter of 2018, India saw a 12 percent decrease in demand for gold jewelry from the same period in 2017....China, the world's major importer of gold, has been actively accumulating gold and is expected to continue doing so in the near future....Gold has always been in demand for its intrinsic value. If current trends continue and the demand for gold accelerates at its current rate, the price of gold will skyrocket."
5 steps to ease your worries about money, health in retirement -USA Today
"We asked financial planners what their clients who are planning for or living in retirement worry about and what can be done to alleviate those worries. 1) Catch up if you haven't saved enough - Do this by estimating how many years your money would last if you withdrew 4% a year for 30 years. 2) Rethink spending - If there are shortfalls...Reduce expenses, retire later and save more. 3) Discuss long-term care - Talk also to a trusted health care broker about the Medicare options and drug plans, based on preferences and needs. 4) Have an investment plan - More than a few pre-retirees worry what will happen to their income if the stock market plunges...set aside 15 to 18 months of cash to cover expected portfolio withdrawals during the length of a typical recession. 5) Plan for cognitive decline - To alleviate this worry, put in place documents and plans in case you experience dementia, Alzheimer’s disease or cognitive decline."
To this wise list, we would add #6: Diversify a portion of your retirement funds into a Precious Metals IRA for safety and growth. A Precious Metals IRA also offers increased peace of mind during times of rising market volatility. Call a Swiss America representative to discuss it further at 800-289-2646. Request our free Precious Metals IRA Guide.
5.16.18 - Billionaires Keep Faith in Gold
Gold last traded at $1,291 an ounce. Silver at $16.40 an ounce.
NEWS SUMMARY: Precious metal prices steadied Wednesday on bargain hunting despite a firmer dollar. U.S. stocks rose as retail shares jumped following strong quarterly earnings from retailer Macy's.
John Paulson and Ray Dalio Stay Loyal to Gold -Bloomberg
"Billionaire hedge-fund managers John Paulson and Ray Dalio kept their faith in gold even as rising interest rates trim the metal's gains. As of March 31, New York-based Paulson & Co. had 4.32 million shares in SPDR Gold Shares, the biggest exchange-traded product backed by bullion, according to a regulatory filing. That compares with 4.36 million shares at the end of December. Billionaire Ray Dalio’s hedge fund Bridgewater Associates also maintained its stake in SPDR and iShares Gold Trust, the second largest bullion-backed ETF....Gold advanced 1.7 percent in the first three months of 2018 as the dollar weakened a fifth straight quarter, helping the precious metal withstand the headwind from rising U.S. borrowing costs."
Gold at a New Low for the Year, but ETF Investors Still Love It -Wall Street Journal
"Gold prices slumped, falling below the $1,300 level for the first time since December as a rising dollar and higher Treasury yields led traders to dump the precious metal. But while the bullion price in the futures market on Tuesday reached a new low for the year, exchange-traded-fund investors recently have been bullish on gold. Investors poured about $3.1 billion into gold-backed ETFs during April, the highest total since February 2017, data from the World Gold Council, an industry trade group, showed....ETF buyers and other bulls have turned to gold as a traditional haven play during turbulent political times, with the prospect of a trade war still looming, uncertainty swirling around North Korea and tensions in Syria and Iran flaring up. Some money managers are also using gold to hedge against a pickup in inflation signaled by recent consumer-price data....'There are major economic, financial and political issues on the horizon that suggest stronger investment demand and higher prices at some point - but they're not here now,' said Jeffrey Christian, managing partner at commodities research and asset-management firm CPM Group."
Gold's Recent 2% Decline Is a Buying Opportunity - Natixis -Kitco
"While gold prices may have further room to fall in the near term, one French bank says current prices represent an exciting entry point for investors. In a report published Wednesday, Bernard Dahdah, precious-metals analyst at Natixis, warned that gold prices could fall as low as $1,275 an ounce as the market deals with a stronger U.S. dollar as a result of rising bond yields....However, despite the potential for near-term weakness, the bank's base-case scenario is for gold prices to average the year around $1,345 an ounce."
The Injustices Of Keynesianism -Forbes
"What are Keynesianism's big negatives, particularly in the moral direction?....The central idea of Keynesianism, the namesake doctrine of British economist John Maynard Keynes, as set out in his magnum opus The General Theory (1936) is that the market, left alone, leads to sub-optimal outcomes. This happens because of a mechanism Keynes called the 'liquidity trap.' If you let the market run, wealth will be unevenly held, and many people with money will sit on it. Capital becomes 'trapped.' The result is idle productive resources. Those who would really benefit from more production via higher wages or jobs or consumption, i.e. the poor and the struggling, are deprived. Keynes's solution was to introduce a non-market agency, the government, to call into use the productive resources left idle given the liquidity trap....Which brings us to Keynesian injustice #1. The classical test cases of Keynesianism were the big government tax, spending, and regulatory initiatives of the 1930s and the 1940s, first the New Deal and then World War II. As the Franklin D. Roosevelt administration conceded after the brutal 1937-38 recession, six years into the New Deal, the big domestic programs of the 1930s did not put an end to the Great Depression....As for Keynesian injustice #2, it inheres in the scourges of our own day, the opioid crisis and mass incarceration...Government can throw everything else at the wall - housing assistance, green-economy mandates, SNAP and CHIP for the kids, prescription drug benefits, etc. of recent experience - and it will all fail, as we learned in the 1930s/1940s....Say’s Law (after Jean-Baptiste Say of 200 years ago), defines entrepreneurs as those who see what people need, even before they themselves do, and get to work providing it. Their standard is other people's success. Not so for Keynesianism."
Are Electric Cars Worse for the Environment? -Manhattan Institute
"Crunch the numbers, and it looks like all those subsidies might be counterproductive. If you believe the headlines, traditional automobiles are speeding toward a dead end. All those V8s, V6s and turbocharged vehicles we've grown to love will soon be replaced by squadrons of clean, whisper-quiet, all-electric vehicles. And if you believe the headlines, the environment will be much better off. Policymakers at every level have done their part to push electric vehicles by creating a tankful of subsidies. Thanks to laws signed by both George W. Bush and Barack Obama, electric-vehicle buyers can feast on federal tax credits of up to $7,500 that reduce the initial purchase cost of their vehicles....All of this might make sense if electric vehicles, as their supporters claim, were truly likely to reduce air pollution and tackle climate change. But are they? To answer that question, I used the U.S. Energy Information Administration's most recent long-term forecasts for the number of new electric vehicles through 2050, estimated how much electricity they'd use...What I found is that widespread adoption of electric vehicles nationwide will likely increase air pollution compared with new internal combustion vehicles. You read that right: more electric cars and trucks will mean more pollution....Cars are charged from the nation's electrical grid, which means that they're only as 'clean' as America's mix of power sources. Those are getting cleaner, but we still generate power mainly by burning fossil fuels: natural gas is our biggest source of electricity, and is projected to increase. And coal, while still declining, will remain the second largest source of electricity for some time....To be sure, electric cars are impressive. But there is no economic or environmental justification for the many billions of dollars in subsidies that America is already paying to speed their adoption. So what to do? First, Congress should immediately terminate those electric-vehicle tax credits, which just benefit the wealthy."
5.15.18 - Five Mexican Banks Hacked
Gold last traded at $1,290 an ounce. Silver at $16.26 an ounce.
NEWS SUMMARY: Precious metal prices fell sharply Tuesday amid an alleged and sudden short-term futures contract sell-off. U.S. stocks dropped after Home Depot reported disappointing quarterly sales and interest rates breached new highs.
Gold Loses $1300 As Cartel Dumps $1.75 Billion Worth Of Paper Gold In One Minute -Silver Doctors
"The April, 2018 Retail Sales Report hit the tape at 8:30 a.m. EST, and the cartel hit the sell button on gold. Retail sales were unimpressive, with what we already know: Stagflation. For example, sales at gasoline stations rose a whopping 11% in April....Nobody in their right mind would just all of the sudden have to sell 13,500+ contracts of gold, all at once, in one single minute, one hour before the market officially opens. That's more than $1.75 Billion worth of gold and $200 Million worth of silver. Paper mind you. Fake. Metal that doesn't exist and only serves the purpose to smash the price. The same shenanigans that have been going on for years....It will go on until it can't. If I learned one thing in the Army, it is that nothing can last forever. And that goes for this price suppression."
Today gold prices fell to their lowest in 2018. This means that those who have waited to add additional 'wealth insurance' to their portfolio are able to buy now at bargain prices. Because all of the fundamentals behind gold ownership are still firmly in place, we encourage our readers to "buy the dip" right now by calling 800-289-2646. Learn more in our free report, The Timeless Truth About Gold and Silver.
Thieves suck millions out of Mexican banks in transfer heist -Reuters
"Thieves siphoned hundreds of millions of pesos out of Mexican banks, including No. 2 Banorte, by creating phantom orders that wired funds to bogus accounts and promptly withdrew the money, two sources close to the government's investigation said. Hackers sent hundreds of false orders to move amounts ranging from tens of thousands to hundreds of thousands of pesos from banks including Banorte, to fake accounts in other banks, the sources said, and accomplices then emptied the accounts in cash withdrawals in dozens of branch offices. One source said the thieves transferred more than 300 million pesos ($15.4 million)....It was not clear how much of the money transferred was later withdrawn in cash....Mexico's central bank Governor Alejandro Diaz de Leon told journalists late Monday that the attack on the payment system was unprecedented and that he hoped that measures being taken would stop future incidents. 'There's no evidence that would allow us to say with certainty that this is over,' he said. 'We’re taking corrective and mitigating action.'....Inter-bank transfers slowed in later April, feeding worries that Latin America's second biggest economy could be the latest victim in a global wave of cyber attacks. Hackers may have had help inside bank branches, since such big cash withdrawals are uncommon, one source said."
When tangible money is reduced to mere computer blips, it can also be hacked and hijacked; as five Mexican banks just painfully learned. In our new White Paper, THE SECRET WAR, PART II: Weapons of Cash Destruction, we reveal more of the worldwide scheme to stop the private use of cash and force people into banks and credit cards so that every transaction can be controlled, tracked and taxed.
The Cost of Cash in Mexico -The Fletcher School, Tufts University
"Mexicans are accustomed to paying with cash. Despite the availability of non-cash alternatives such as credit, debit, and prepaid cards, online banking, and most recently mobile banking, an estimated 90% of consumer transactions in Mexico are still performed in cash. These transactions account for more than 75% of the value of consumer payments. Our survey data confirms that even in payment categories that are relatively easy to make electronically, such as utility bills and tax payments, Mexicans are reluctant to adopt new payment methods. For everyday purchases and for important bills, Mexicans trust cash....Less than one-third of Mexican adults (27%) have a bank account in a regulated financial institution. Even less have a debit or credit card. Unsurprisingly, account ownership is lowest among rural, less educated, and low-income Mexicans."
Trump Didn't Destroy the Working Class -Bonner/Bonner And Partners
"Both [political] parties represent, first and foremost, the interests of the Deep State, the loose collection of insiders, chiselers, and hustlers who use the government to get wealth and status for themselves. And what is the common enemy of both the right and left wings of the Deep State? Corruption? Incompetence? The Devil himself? No… it's capitalism. Economist David Ricardo, in his 1817 work On the Principles of Political Economy and Taxation, introduced the term 'capitalist' to describe a person who owned wealth-producing assets. But people had learned, centuries before, that they were better off if they respected private property, honored the commitments they made to one another, and used honest money to keep track of who owed what to whom. 'Capitalism,' in other words, is what happens when people are left alone and free to make win-win deals among themselves...Capitalism is not a 'system.' It can't be improved, reformed, or redesigned. Like freedom itself, all you can do is take it away - by breaking contracts, stealing property, and counterfeiting money....Since then, the Deep State has grown, with its taxes, regulations, the Fed, its Great Society, and its wars - all of them meant to hobble capitalism and keep the money flowing to the insiders. As we have seen in these pages, the new, gold-free dollar of 1971 probably did the most damage. It perverted the capitalist system. 'Capitalists' no longer needed real capital; they could get it from the Fed - free money that no one ever earned. The Deep State no longer needed tax revenues, either; it could borrow trillions without voting for a tax increase. The rich got richer on all this unearned cash. The working classes got poorer, as their major asset - their time - declined in value. Why did the masses vote for Trump? The answer is easy: They felt the knife in their backs. They didn't know who had put it there… but they knew it wasn't Donald J. Trump."
5.14.18 - The Argentine Peso's Death Spiral
Gold last traded at $1,318 an ounce. Silver at $16.64 an ounce.
NEWS SUMMARY: Precious metal prices remained firm Monday on dollar weakness and bargain hunting. U.S. stocks traded higher amid hopes of a breakthrough in trade tensions between the U.S. and China.
Gold's Beauty Contest Still Has Legs -Bloomberg
"Gold prices have been slipping, but futures positions suggest a rally may not be far away....The June-August period tends historically to be mildly bullish for this highly cyclical metal, second only to its traditional surge in the first two months. ETF purchases have been picking up since the start of this quarter: The 1.9 million-troy-ounce increase during April was the strongest in 14 months. In addition, a whiff of chaotic geopolitics is afoot, another favorite explanation for gold’s mysterious movements. Most of all, watch out for the lure of contrarianism. Investment funds' long positions in U.S. gold futures have slumped to a nine-month low of 51,985 contracts as of May 1. That superficially looks like a bet on falling prices, but more often than not such moves are a sign that investors have got themselves too short. Since gold markets bottomed at the end of 2015, on each of the five occasions when net long positions fell below 100,000 contracts, a rally soon emerged. On average, prices were up 4.8 percent 50 trading days later....While gold's charms may have dimmed, they haven't been extinguished. It's too soon to assume this particular beauty contest is over."
Why Obama's Iran Deal Got Trumped -Pontification Blog
"President Donald Trump's decision to terminate President Barack Obama's Iran deal, said Mr. Obama - a self-described globalist 'citizen of the world' - 'is a serious mistake.' Two former directors of Obama's National Security Council committed an even larger ethical breach. Steven Simon and Jonathan Stevenson in a New York Times Op-Ed called on European nations to withdraw their diplomats from Washington, expel U.S. diplomats from their capitals, and respond to any U.S. sanctions for continuing to trade with Iran by imposing sanctions of their own against the United States. The German weekly Der Spiegel - whose politics echo the Social [i.e., Socialist] Democratic Party (SPD), much as Britain's Guardian and our New York Times act as propaganda auxiliaries of their nation's main leftist parties - declared a day later in an editorial that it was 'time for Europe to join the Resistance' to President Trump’s America. The immediate reason for such high dudgeon is, of course, money. Germany was doing $6.0 Billion a year with Iran in the late 1970s, saw trade shrivel with the embargo, then watched business rebound to $3.5 Billion in 2017 under Obama’s Joint Comprehensive Plan of Action....Europe has been raking in money from Iran hand over fist, with a French oil company deal worth $4.8 Billion, an Airbus deal for 100 airplanes to Iran worth $18 Billion that otherwise might have gone to Boeing, and so forth....Even the left-of-center magazine The Atlantic titled a May 4 article: 'The Iran Deal Is Strategically and Morally Absurd,' noting that this non-ratified non-treaty is merely the compromising whim of 'America's first 'post-Western' president,' and that Obama's 'paralyzing fear of war' led him to 'wishful thinking' about the Middle East." Full story
U.S. Retreat From Trade Deals Poses a New Threat to Dollar -Wall Street Journal
"Trade friction is emerging as the latest threat to the U.S. dollar’s position at the heart of the global financial system. For decades, central banks have held the bulk of their foreign-exchange reserves in the dollar, reflecting the dominant role the U.S. and its currency have played in global trade. As the U.S. pulls back from partnerships while countries like Mexico and Japan strike their own trade deals, the dollar's dominance could be undermined, investors and analysts said. That dominance has been referred to as an 'exorbitant privilege,' allowing the U.S. to borrow cheaply and run persistent deficits. Though a less U.S.-centric trade system would take years to fully evolve, it would have significant implications for global central bankers charged with allocating some $11 trillion in reserves. Many are now ramping up investment in such currencies as the euro and Chinese yuan, reflecting the effects of such moves as the U.S. retreat from the North American Free Trade Agreement and Trans-Pacific Partnership....The risks of the dollar's dominance have come into focus in recent weeks as a modest dollar rally raised concerns about the ability of some emerging-market nations to service their dollar debt and pay for imports."
The Argentine Peso's Death Spiral -Wall Street Journal
"A sharp selloff of the Argentine peso is sparking new inflation fears in South America's second-largest economy. For a country that is heavily dependent on foreign capital and has a history of repeatedly destroying its currency, this is no passing storm. The return of the International Monetary Fund to Argentina last week with a $30 billion emergency aid package is proof that the government is in panic mode....Any rescue has to start with President Mauricio Macri explicitly backing the central bank's independence so that the monetary authority can restore its credibility....The idea that easy money can substitute as a fix for underlying structural problems wasn't born in Argentina. Barack Obama and Federal Reserve Chairs Ben Bernanke and Janet Yellen tried it for eight years after the 2008 financial crisis. Yet U.S. growth didn't pick up until the Trump administration began to cut taxes and reverse an anti-business bias....Mr. Macri is blaming the peso rout on rising dollar interest rates, higher oil prices and 'other variables that we don't manage.' But as I noted in a February column on this topic, Argentina's deeply rooted culture of populism is the original sin, and Mr. Macr's reluctance to confront it threatens his success....Mr. Macri wants Argentina to return to normalcy. But asking the central bank to bear the cost of runaway populism is no way to get there."
5.11.18 - Gold Building Positive Momentum
Gold last traded at $1,320 an ounce. Silver at $16.75 an ounce.
NEWS SUMMARY: Precious metal prices ended the week higher Friday on dollar weakness and geopolitical tensions. U.S. stocks traded higher this week as oil prices boosted the energy sector and telecommunications outperformed.
Soft U.S. inflation pushes gold prices higher -Reuters
"Gold was set for its first weekly gain in four weeks on Friday after soft U.S. inflation data suggested that the Federal Reserve might show caution on the pace of interest rate rises. The weaker-than-expected April consumer price data onThursday helped to knock the dollar from 2018 highs and push U.S. bond yields down. The dollar fell further on Friday. That benefits gold because a weaker dollar makes bullion cheaper for users of other currencies, while lower bond yields make non-yielding gold more attractive to investors....St. Louis Federal Reserve Bank President James Bullard on Friday spelled out the case against any further interest rate increases. Rates may already have reached a 'neutral' level that is no longer stimulating the economy, he said, and going further risks nipping off business investment that may follow the recent corporate tax cut....Prices appeared to be building positive momentum, ScotiaMocatta technical analysts said. Consolidation above resistance at the 100-day moving average might be a catalyst for more gains, MKS PAMP trader Tim Brown said."
Initial Coin Scams -Roubini/Project Syndicate
"There are now nearly 1,600 cryptocurrencies, and the number continues to rise. Initial coin offerings have become the most common way to finance cryptocurrency ventures...In exchange for your dollars, pounds, euros, or other currency, an ICO issues digital 'tokens,' or 'coins,' that may or may not be used to purchase some specified good or service in the future. Thus it is little wonder that, according to the ICO advisory firm Satis Group, 81% of ICOs are scams created by con artists, charlatans, and swindlers looking to take your money and run. It is also little wonder that only 8% of cryptocurrencies end up being traded on an exchange, meaning that 92% of them fail....In the Wild West of ICOs, most cryptocurrencies are issued in breach of SEC laws and regulations, under the pretense that they are not securities at all. Hence, most ICOs deny investors any legal rights whatsoever....So, hundreds of ICOs that have raised billions of dollars from investors in recent years have been technically illegal....It is time to recognize their utopian rhetoric for what it is: self-serving nonsense meant to separate credulous investors from their hard-earned savings."
Mr. Roubini goes on to write that he believes both bitcoin and blockchain technology represent a massive bubble. The debate over bitcoin and other cryptocurrency prices continues daily. Get the facts so you're better equipped to come to your own conclusions about the cryptocurrency craze in our free 2018 Real Money Perspectives newsletter, The Future of Money.
In a Dollarized World, a Rising Dollar Spells Pain -Wall Street Journal
"The latest emerging market tumult exposes a critical though dimly understood fault line in the global economy. Though the U.S. share of global output and trade has declined over the decades, the dollar has become even more dominant in global trade and finance. Dollarization, new research shows, means an appreciating dollar may hurt rather than help other economies by raising their import and debt costs. In fact, a rallying dollar may help explain why global growth has already faltered this year. The dollar's dominance is also why the U.S. can isolate Iran simply by cutting off its access to the U.S. banking system....With the dollar rising, emerging-market currencies, stock markets and bonds are all selling off....The saving grace is that the dollar so far hasn't risen much relative to last year's drop. How much further it goes depends a lot on the Fed....The dollar's 'exorbitant privilege' imposes an 'exorbitant responsibility' on the central bank says Mr. Stein, a former Fed governor."
"Ice Nine" Comes to China -Rickards/Daily Reckoning
"The war on cash has been going on for decades. The U.S. abolished the $500 bill in late 1969. Today's $100 bill is only worth 10 cents on the dollar compared with the $100 bill of 1969. Europe will abolish the 500 euro this year. We all recall what happened in India in late 2016 when India abolished the 500 and 1,000 rupee notes; there was mass chaos as peasants lined up to turn in the old notes for digital credit. ATMs were shut down because the replacement notes were too big for the ATMs!....Now the war on cash is being taken to a new level. China, the world's most populous country and the world's second-largest economy, has said that physical cash may soon become obsolete....China may be getting close to that tipping point, and will get there sooner if the government pushes cash off the ledge by regulation. This brings me to what I've warned about for years...It's what I call 'ice-nine.' This refers to government's ability to lock down the financial system in the next global crisis. And it won't be just China....Instead of money printing, central banks and governments plan to lock down the system and not let investors get their money out. This will begin with money market funds and then spread quickly to bank accounts, ATMs and stock exchanges until the entire system is frozen....You should prepare also by buying physical gold and silver to be kept outside the banking system."
THE SECRET WAR, PART II: Weapons of Cash Destruction - Today a "cashless" banking system has become key in creating an all-pervasive, all-controlling global government surveillance and power over each of us. Get up to speed fast by reading our brand new FREE report now, Call 800-289-2646 or register HERE.
5.10.18 - Cash: The Last Vestige of Freedom
Gold last traded at $1,322 an ounce. Silver at $16.75 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on geopolitical tension and weaker-than-expected inflation data. U.S. stocks traded higher, gaining a boost from tech stocks and the energy sector.
Gold firms as dollar rally pauses, geopolitical tensions simmer -Reuters
"Gold rose on Thursday as the dollar edged away from 2018 highs after weaker than forecast U.S. inflation data and as simmering tensions between the United States and Iran lent the precious metal further support. The dollar slipped from a 4-1/2 month peak after U.S. data showed the consumer price index rose 0.2 percent in April versus forecasts for a 0.3 percent increase. Also helping gold, viewed as a safe-haven investment, was U.S. President Donald Trump's move on Tuesday to withdraw from a nuclear accord with Iran, raising the risk of conflict in the Middle East. Israel said on Thursday that it had attacked nearly all of Iran's military infrastructure in Syria after Tehran fired rockets at Israeli-held territory for the first time. 'We've seen a (dollar rally) in the last few weeks, but actually gold hasn't gone down as far as you might think, so political tensions are helping,' said Macquarie commodities strategist Matthew Turner....North American gold-backed exchange-traded funds registered inflows in April at their highest level since September 2017, with safe-haven purchases ushered in by a trade stand-off between the United States and China, Syria tensions and worries about possible U.S. sanctions on Russia."
A Cashless Society – It is Coming -Gold Telegraph
"You love your credit cards, right? Handy and easy, you just whip it out and purchase whatever you want. No cash; no hassle. And everyone makes it so easy for you Before you bask in all this convenience, consider just who is gaining from this war on cash. The banks, of course, are charging as many fees as they can think of. More importantly, your cash card leaves a wide data trail detailing your buying preferences, used by merchants and advertisers to entice you into more buying...Cash offers the ultimate in privacy....No one, however, discusses the insidious dangers inherent in the move toward a cashless society. One of the largest perils is that it all but eliminates financial prudence. You’re not handing over cash, but a mere card. The psychological difference is enormous....Cash transactions are declining globally, and the poorest members of society are feeling the backlash. Approximately 7 percent of Americans do not have bank accounts, and the number of homeless has increased for the first time since 2010. The lack of cash has marginalized those who are most vulnerable....Cash in hand has always represented freedom, and that is now being eroded at an alarming rate. Private, legal transactions will become illegal or impossible in a cashless society when every financial transaction is being monitored and scrutinized. Without cash, people become purely dependent on big banks. What happens when the banks fail? During times of crisis, banks could shut their doors and prevent depositors from accessing their money....Banks and governments are amassing the ultimate power by gradually removing the last vestige of freedom – cash. Those who are ready to give up their cash will surely pay the price."
Learn what your must do now to protect your freedom and privacy in our FREE Special Report: THE SECRET WAR, PART II: Weapons of Cash Destruction.
Australia Bans Payments Over $10k, Unleashes "Mobile Strike Teams" In War On Cash -Zero Hedge
"As Australia struggles to maintain its unprecedented 104-quarter-long streak of uninterrupted economic growth, lawmakers are intensifying the country's 'war on cash' - ostensibly part of a crackdown on 'criminal gangs' that are smuggling drugs and/or people into the island nation and companies that are trying to cheat their taxes. Australia's government has introduced an economy-wide payment limit of $10,000 for transactions conducted in cash, which, according to News.au, will help (in the aussie slang) 'keep dishonest tradies and businesses from rorting the system by taking cash in hand.' From July 1, 2019, cash payments of more than $10,000 made to businesses for goods and services will be banned as the Turnbull Government seeks to crack down on the $50 billion 'black economy.' The law was purportedly inspired by instances of large purchases - yachts, sports cars and other luxury items - being made in cash and the tax not being reported....Meanwhile, Australia's federal law enforcement are setting up a hotline for people to call in and 'dob on their neighbors' who are violating the cash payments rule....Of course, while the government says its new system is targeted at criminals, we suspect there might be an ulterior motive: Given the rash of foreign investment that has propped up Australia's housing and asset markets, the government is merely trying to stop a flood of capital from leaving the country - particularly now that rising interest rates in the developed world are making its bonds and currency less attractive by comparison."
Gold is beating the stocks so far this year -Holmes/Business Insider
"Gold was up half a percent year-to-date through last Friday. This doesn't sound very exciting, but over the same period, the S&P 500 Index was in the red - the first time in nearly a decade that stocks have been negative for the year through the beginning of May. The yellow metal is doing the one thing for which many investors have it in their portfolio - namely, it's trading inversely to the market. This highlights its longstanding role as an attractive diversifier and store of value. Gold has been under pressure from a strengthening U.S. dollar, and May has historically delivered lower prices. As I've pointed out before, this makes it an ideal entry point in anticipation of a late summer rally before Diwali and the Indian wedding season, during which gifts of gold jewelry are considered auspicious. Demand in China for the remainder of the year also looks promising....Looking ahead, it's estimated that India will have a 'normal' monsoon season this summer. This is good news for gold's Love Trade. A third of India's gold demand comes from rural farmers, whose crop revenues depend on the rains from a healthy monsoon....In China, the world's largest importer of gold, jewelry demand rose 7 percent in the first quarter to 187.7 metric tons, a three-year high...fears of a potential trade war with the U.S. could be driving Chinese investors into safe haven assets, including gold bars and coins."
5.9.18 - Banker Warns: Get Out of Banks
Gold last traded at $1,313 an ounce. Silver at $16.53 an ounce.
NEWS SUMMARY: Precious metal prices were steady Wednesday amid a stronger dollar and rising oil prices. U.S. stocks rose as the energy sector was boosted by rising oil prices after the U.S. pulled out of the Iran nuclear deal.
Oil soars as Trump dumps Iran nuclear deal, dollar dips -Reuters
"Crude oil prices hit 3-1/2-year highs on Wednesday after President Donald Trump pulled the United States out of an international nuclear deal with Iran, while the dollar touched a new high for the year and world stocks held steady. Trump's move sparked fears of increased tension in the Middle East and uncertainty over global oil supplies. Demand for safe-haven assets remained muted as the immediate market impact was seen as specific to oil supply, but investors remained mindful of the knock-on effects on inflation. 'In an environment where the Fed, particularly, is already at its inflation target and people are closely watching the pace of the monetary tightening, something like this which could possibly nudge inflation a little bit higher is going to be quite interesting for the market,' UBS Wealth Management's UK chief investment office deputy head, Caroline Simmons, said."
A Recession Soon? -Library of Economics and Liberty
"I will not repeat the cliche according to which predicting the future is more difficult than predicting the past, but I see at least three reasons to expect a recession soon. First, the last recession ended nine years ago (in June 2009), which means that the current expansion will have lasted 10 years next month. That long an expansion only happened once before, from March 1991 to March 2001, across the 33 recessions identified by the National Bureau of Economic Research since 1857....Second, interest rates have been increasing for some time, and the Fed wants to push them up further...if the Fed goes against the market, the result could be a crash of stock prices, a rise of bankruptcies, and a general increase of economic uncertainty....Third, investors are worried about the smoldering trade war. This fear was already visible in late January, after the Trump administration announced tariffs on solar panels from China and washing machines from South Korea. The Dow quickly dropped by 10% after its all-time peak of January 26....Other sorts of shock are possible. A constitutional crisis would be one. A geopolitical event would be another one - especially if it pushed up oil prices....The main question, I would argue, is not whether a recession is coming, but whether public policy will change it into a depression."
Former Goldman Banker: Get Out Of The Banking System And Into Real Assets Such As Gold & Silver -Silver Doctors
"Nomi Prins says when the next financial crisis hits, it will not only be worse than 2008, but the banks will shut their doors to depositors. Here's the details…Nomi Prins interviewed by Greg Hunter on USA Watchdog. Hunter: Will the next crash be worse than the last one? Prins: 'Yes, it will because we will be falling from a higher height. The idea here is you are sinking on the Titanic as opposed to sinking on a canoe somewhere. All of this artificial conjured money is puffing up the system, along with money that is borrowed cheaply is also puffing up the system and creating asset bubbles everywhere. So, when things pop, there is more leakage to happen. The air in all these bubbles has created larger bubbles than we have had before.' Hunter: How does the common man protect himself? Prins: 'They have to own things, and by that I mean real assets, hard assets like silver and gold. That's not as liquid, so taking cash out of banks and sort of keeping it in real things and keeping it on site . . . keeping cash physically. You need to extract it from the system because the reality is when a financial crisis happens, banks close their doors to depositors. . . Also, basically try to decrease your debt.'"
Gold Demand Trends Q1 2018 -Gold.org
"Net central bank purchases totaled 116.5 tons in Q1, 42% higher y-o-y and the highest Q1 total since 2014. Since becoming net buyers in 2010, central banks have bought - on average - 114.9 tons per quarter. Net purchases have become more concentrated since the 2013 peak: Russia, Turkey and Kazakhstan collectively account for nearly 50% of net purchases over the last five years. Russia continues to be the most prolific purchaser of gold, adding 41.7 tons in Q1. Russian gold reserves have grown to 1,890.8 tons since the start of the year, now accounting for 18% of total reserves. The Central Bank of Russia has purchased gold for 38 consecutive months, accumulating 683.1 tons in that time. This commitment to growing gold reserves - a directive by authorities - shows no signs of abating and reinforces the view of gold as a strategic asset....Over recent quarters, some central banks have used gold holdings to enhance overall portfolio returns. Central banks may choose to do this via active trading of their gold holdings (e.g. Jordan) or through swaps (as in Argentina). These examples highlight the role that gold can - and does - play, beyond diversification."
How America Broke Its Economy - New Republic
"Unemployment is at a 15-year low, so why aren't wages surging? Because the old rules no longer apply. The April jobs report, released on Friday, brought more incrementally good news for the economy: The unemployment rate fell to 3.9 percent, the lowest it's been since late 2000....But the report also contained a now-familiar disappointment: wages remain stagnant. Average hourly earnings rose by 4 cents over March, bringing the total increase over the past year to just 67 cents, or 2.6 percent....This is not how the economy is supposed to work. Pay is supposed to increase during periods of low unemployment, because workers have more power to demand raises from their current employer, or else leave for a better-paying job...But that hasn't happened to a meaningful degree today, defying expectations and confounding economists....America, through explicit policies bolstering corporate power and degrading worker power, has gradually altered how the economy behaves, such that even the good times aren't that good for a majority of people."
5.8.18 - Economy's Good Days "Numbered"
Gold last traded at $1,313 an ounce. Silver at $16.51 an ounce.
NEWS SUMMARY: Precious metal prices steadied Tuesday ahead of Iran decision; despite a firmer dollar. U.S. stocks traded flat as Wall Street braced for President Trump's decision on whether he will pull the U.S. out of the Iran nuclear deal signed three years ago.
Gold seen at highest annual price for five years in 2018: GFMS -Reuters
"Gold in 2018 will deliver its strongest annual price performance in five years, GFMS analysts forecast on Tuesday, as political uncertainty drives investment in bars and bullion-backed investment funds. The GFMS metals research team, a unit of Thomson Reuters, predicted gold would average $1,360 an ounce this year, up 8 percent from 2017, with some short-term moves towards $1,500. Gold has not risen above that level since early 2013. 'Uncertainty revolving around President Trump's politics, along with ongoing tensions in the Middle East and Brexit negotiations will remain gold’s key drivers,' the team said as it released its Gold Survey 2018....'Retail investment is forecast to rise in 2018 following four consecutive years of declines, thanks to a pick-up in bar demand, supported by improving sentiment towards gold and rising price expectations,' GFMS said. Adding to the bullish picture, the Chinese central bank was expected to resume purchases, GFMS said, leading to a rise in net official sector demand this year to more than 400 tons for the first time since 2015."
Slowing growth, stalling stocks raise fear that economy's good days are numbered -Marketwatch
"Are the good times coming to an end, after all these years? Increasingly, one of the biggest concerns that U.S. stock-market investors are grappling with is the idea that the U.S. economy has entered the late stage of the expansion cycle, suggesting there may not be much time before the next downturn, and with it, the likely end to a bull market that is already one of the oldest in history. Phases of economic cycles are often difficult to define, and there's hardly an unanimous consensus on where things currently stand. However, there's a growing list of ominous signs, even apart from separate potential headwinds like a growing trade war or other geopolitical issues, that things are slowing....'Investors are wary about the surge in volatility to start the year, concerned about global trade negotiations, and debating whether we may have just witnessed the best of investing times in the cycle,' said Matt Miskin, market strategist at John Hancock Financial Services. Stocks have been struggling lately, with major indexes stuck in a tight trading range."
Why Stocks Can't Wait for the Midterms to Be Over -Wall Street Journal
"The stock market is likely to struggle between now and the Nov. 6 midterm elections. And it isn’t because stocks favor one party or the other. It’s because investors hate uncertainty, and these elections create a healthy dose of just that....There currently is a 67% probability that the Democrats will win back control of the House in this fall's elections, for example, according to PredictIt, an online betting website....ever since the Dow Jones Industrial Average was created in the late 1890s, it has produced an annualized gain of just 1.4% in the six months before midterm elections....Fortunately for investors who were looking forward to selling in May and going away, history says the next six months are likely to be a rough period for stocks."
The "Fundamental Transformation" of Both Parties -Pontification Blog
"Hillary Clinton's latest excuse for losing the 2016 election is that she is a 'capitalist' but that '41 percent of Democrats are socialists…' Sadly, after her closest approach yet to truth, no journalist asked the obvious question: 'Ms. Clinton, if you are a capitalist but your party is rapidly becoming socialist, why don't you resign from the Democratic Party and urge your capitalist supporters to do likewise?' The larger point is that the Democratic Party has now moved so far to the left that even Communists eagerly support its ideology and candidates. Both parties come from the same godless collectivist movement of pseudo-scientific social engineering called Progressivism that advocates not progress towards freedom but a reactionary return to feudalism, elite rulers, and serfdom. The hijacked Democratic Party has become a radical socialist party unworthy of support by anyone who loves individual liberty. Most of the Republican Party, meanwhile, thanks to President Trump, is moving away from the globalist, collectivist agenda of Progressivism that has ruled both parties since World War II. Mr. Trump is restoring both nationalism and America's borders. He is returning America to its historic role as an experiment in liberty that unites enterprising, liberty-seeking citizens from around the world in the first 'new nation,' a great model of free enterprise for Planet Earth to follow. Progressives in both parties eager to enslave us under global government are furious at Mr. Trump's success."
Pelosi has a chilling message for America -The Horn News
"Nancy Pelosi said Sunday that House Democrats have enjoyed a huge funding wave from Wall Street bankers and liberals groups - and they're trying to take back the majority in November by any means necessary....This isn't just any election, conservative leaders warn. If Democrats retake power, they'll forever rig the system to make sure they hold power forever. They'll undo all the work President Donald Trump has done. They'll stuff the courts with liberal judges and impeach anyone they don't like - which makes the 2018 midterm elections the most important of our lifetime....'We're going to spend millions this summer and this fall reminding people what Nancy Pelosi would do to this country if she were speaker again,' Congressional Leadership Fund executive director Corry Bliss said."
5.7.18 - Housing Optimism: 12-Year High
Gold last traded at $1,314 an ounce. Silver at $16.49 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Monday on mixed economic signals and a firmer dollar. U.S. stocks rose on higher energy prices as oil topped $70 a barrel, a 4-year high.
Is The Supply Of Gold Depleting? -Zero Hedge
"The demand for gold is increasing, yet new discoveries of the precious metal have not kept pace with the demand. Funds for exploration are historically high, $54.3 billion, up 60 percent over the past 18 years. The increased spending, however, has not produced the equivalent in new gold discoveries. During the past decade, 41 discoveries have resulted in a mere 215.5 million ounces of the precious metal....Part of the problem is that the time span between discovery and production is around 20 years. Unless significant new discoveries are made, the amount of available gold could decrease in the near future, raising the demand for the metal even further. Scarcity invariably results in higher prices, and the decline in global gold makes a price increase almost certain."
You Must Own Gold or You Will Lose a Third of Your Retirement Savings -Garret/Newsmax
"The first rule of successful investing is to buy assets on the cheap, not when they are peaking....The reality is that stocks and bonds have been in a major uptrend for 9 years and 20+ years respectively, and so are overdue for a correction. Gold, on the other hand, peaked in 2011 at $1,900 and has only recovered part of its loss so far. It's ironic that people were bullish on gold when it hit $1,900 and turned bearish when it dropped to $1,100....I believe a recession is due within the next year. As soon as the markets tumble, the Fed will resume quantitative easing. In turn, precious metals will continue the rally that was halted after the end of QE3 in 2010. A more important question you should ask yourself, especially if you are close to retirement, is this: Can I afford to lose 30% or more of my retirement savings if the stock market crashes? Do I have a hedge or Plan B in such a scenario? That's where gold comes in handy....Most investors, including myself, buy physical gold not to make a profit, but to hedge against inflation, stock market crashes, currency devaluation, and all sorts of financial crises. The reason is that gold has retained its value for 5,000 years. It has been a unit of exchange and a store of value since the dawn of humanity. Another advantage is that gold is not correlated to the stock market. Put simply, when stocks zig, gold zags. And don't take my word for it, just look at the data:" [see chart below]
Iran nuclear worries pushes crude oil to 4-year high -Financial Times
"Brent crude on Monday touched its highest level since 2014 as oil prices increased on rising tension between the US and Iran. The move came after Iran's president Hassan Rouhani warned on Sunday that US president Donald Trump would be making a 'historic' mistake if the US were to withdraw from its 2015 nuclear deal with Tehran. Mr. Trump has threatened to abandon the deal, under which Iran shut down its nuclear activities. US sanction waivers expire on May 12. 'US oil prices pushed through the $70-per-barrel mark for the first time since November 2014 amid expectations for a re-imposition of sanctions on Iran,' said Action Economics analysts....'Market participants realize that the recent increase in the commodity’s price - and possibly more gains in light of the US versus Iran dispute on the nuclear deal - will have to take their toll on US inflation,' said Konstantinos Anthis, head of research at ADS Securities."
Americans haven’t been this optimistic about house prices since just before the crash -Marketwatch
"A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That's up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s. The level of optimism is edging closer to the 70% of adults in 2005 who said prices would continue rising. That, of course, was less than one year before the peak of the housing market bubble in early 2006, which was largely fueled by a wave of subprime lending....The national median list price now rests at $273,663, roughly 20% higher than in both March 2015 and March 2005....And yet some housing analysts are less optimistic than many people surveyed by Gallup. There are signs that the U.S. housing market could be overheating. The number of U.S. homes being flipped reached an 11-year high last year with more than 200,000 homes being flipped for second consecutive year...Home prices are rising far faster than incomes....if mortgage rates continue to rise, fewer millennials will be able to afford homeownership, and will keep renting or living with family."
5.4.18 - 2nd Richest Man Seeks Cash Ban
Gold last traded at $1,314 an ounce. Silver at $16.51 an ounce.
NEWS SUMMARY: Precious metal prices steadied Friday amid lackluster jobs data and a firmer dollar. U.S. stocks rallied as shares of Apple hit an all-time high, leading the technology sector higher.
My Case For Gold Hitting A Record High Above $2,000 -Wycliff/Kitco
"While the headline of this special report may sound like I'm really going out on a limb, just read on and let me explain. I am going to show you three charts that lay out my case for gold pushing to new highs above $2,000 an ounce. These charts will corroborate my notion that it's not a stretch to suggest gold will hit a new all-time high in the coming years, or possibly sooner....The monthly chart for the Goldman Sachs Commodity Index show that prices are at a more-than-four-year high and have been trending higher for two years, suggesting more upside for the raw commodity sector in the coming months, and likely much longer....Lumber is likely the leader in a resurgent construction sector that will, in the not-too-distant future, see other construction materials prices hit new highs...If the pace of price inflation heats up a bit more, the pace of raw commodity price increases will also increase accordingly....Comex gold futures prices are in a fledgling uptrend...if the present trend trajectory continues, gold will hit a new record high sometime in 2027, and will hit $2,000 in the year 2028. However, it's my bias that gold's present price uptrend trajectory will accelerate in the next couple years...If such is indeed the case, gold will hit a new high significantly sooner than nine years out."
Is A New Bear Market Lurking For The US Stock Market? -Capital Spectator
"A wobbly equity market, expectations for higher interest rates and weaker economic growth in the first quarter have inspired some pundits to claim that bear-market risk for stocks has spiked higher in recent weeks....Let's start with the economy. Last week's preliminary GDP report for Q1 revealed a slowdown in growth. Output increased 2.3% during the January-through-March period, the government reported on Friday - the softest gain in a year....Analysts point out that the S&P 500 Index's upside trend is showing signs of breaking down this year. Notably, the high points in recent rallies reflect a downward bias and the lows for the S&P have more or less bounced off the widely followed 200-day moving average....Bill Gross, an influential bond fund manager, tells Bloomberg that he expects rates to tread water for the near term. 'I would expect the 10-year to basically meander around 2.80% to perhaps 3.10% or 3.15% for the balance of the year. It's a hibernating bear market [for bonds], which means the bear is awake but not really growling.'....Granted, the prospects for a resumption of a roaring bull market don't look compelling at this juncture...As of last night's close, the S&P 500 index is down a mild 1.4% year to date. By that measure, the year so far is mostly a yawn for stocks."
World's 2nd Richest Man Wants to Ban Cash -Casey Research
"Visa is paying businesses as much as $10,000 to stop accepting cash. JP Morgan Chase refuses to accept cash for any credit card, car loan, or mortgage payment. (You also can't store cash or coins - including gold - in their safety deposit boxes.) And even Bill Gates and the Clinton Foundation are fighting cash through their 'Better than Cash' alliance! But any way you slice it, the message is clear…We're being 'attacked' from all sides. And the walls are closing in. If these elites get their way, cash and cryptos will soon be a thing of the past. And that can only mean one thing: More oversight. More taxes. And more control. Just think about it…We'll have no more cash….That means essentially ALL our transactions will be 'on the grid.' Worse than today! And once your money is trapped, there's no end to the damages central planners can do. You want 'real' money that won't get devalued by some Washington pencil-pusher and that can't get hacked or tracked. I'm talking, of course, about gold and silver. Gold - along with silver - will soon be the only 'private' forms of money left in America."
The government of the United States and many of its global allies are fighting a secret war – a war to destroy your right to own and use cash. “Cash is unique among payment instruments in that anyone can transact any time, any place, with no third parties. With this freedom comes strong privacy protection….” concluded a study by the Fletcher School at Tufts University. “This freedom creates a parallel economy outside the banking system.” Learn what your must do now to protect your freedom and privacy in our FREE Special Report: THE SECRET WAR, PART II: Weapons of Cash Destruction.
Retirees are losing their faith in Social Security -CNN Money
"Only 45% of retired workers think Social Security will continue to provide the same benefits it does today going forward, according to the Employee Benefit Research Institute. That's a drop from the 51% of retirees who felt the same way last year. The question is: Are today's seniors being overly pessimistic? Or are they really on to something?....According to the latest trustee report, Social Security's trust funds are set to run dry in 2034. Once that happens, the program might need to cut benefits by as much as 23%, which would no doubt constitute a major blow for current and future recipients....But even if benefits don't wind up getting slashed in the future, recipients still face a very real problem: Social Security isn't keeping up with senior spending. The program's meager cost-of-living increases have not done a good enough job of helping beneficiaries maintain their buying power in the face of inflation....Social Security was never designed to sustain seniors on its own...benefits will replace about 40% of the average worker's pre-retirement income. Most seniors, however, need close to double that amount to live comfortably."
5.3.18 - 100% Chance of Recession by 2020
Gold last traded at $1,312 an ounce. Silver at $16.44 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks traded lower as investors looked past quarterly earnings results as China trade and geopolitical worries mounted.
100% Chance of Recession -Bonner/Bonner And Partners
"Here's an old proverb for you: What goes up must come down. We've just passed an important landmark. The U.S. economy has been going up for 106 months, edging into second place among the longest-lasting expansions of all time. Since 1879, there have been 28 recessions and (obviously) 29 recoveries. The average recovery lasted 41 months. So we're driving way over the legal limit. What are the odds of an accident? We're not a mathematician, but we put them at approximately 100% sometime during the next three years. The economy will go into recession. Jobs will be lost. Cars and houses will be repossessed. Some people will be desperate. Like the economy, the stock and bond markets are also cyclical... and driving severely impaired. We are now in the tenth year of a bull market that has taken prices higher than we've ever seen them. At these levels, according to market folk wisdom, logic, and the studies of Nobel Laureate economist Robert Shiller, the next 10 years will be a bad time to be in stocks."
The War on Cash Is Still Good for Gold -Holmes/US Funds
"In 'The Curse of Cash,' Harvard economics professor Kenneth Rogoff makes the case that nixing paper money - at the very least, larger-denominated bills - 'could help more than you might think' in combating criminal activities such as drug trafficking, corruption, extortion and money laundering. It could even prevent the spread of terrorism and discourage illegal immigration, Rogoff argues. It gets even worse. Central banks, he adds, should have the latitude to drop interest rates below zero during recessions to spur spending....While we all agree that corruption and terrorism are things that should be stopped, killing cash is the absolute wrong way to go about it. Instead, perhaps Rogoff should consider 'The Curse of No Cash.' Does he not recall what happened in Cyprus? The government ransacked citizens' bank accounts to 'fix' its own mistakes and mismanagement. In example after example, people's rights to save and freely hold cash have been disrupted, with tragic results....There's one area where Rogoff and I both agree, though. 'As paper currency is phased out,' he writes, 'gold prices will rise.' Were cash eliminated and interest rates plunged underwater, gold's role as a store of value would become even more apparent and demand for the yellow metal would turn red hot, despite its price appreciation.'"
JUST RELEASED: THE SECRET WAR, PART II: Weapons of Cash Destruction - Today a "cashless" banking system has become key in creating an all-pervasive, all-controlling global government surveillance and power over each of us. For this brief moment in history, you still have the power to save at least your own family, and perhaps America, if you act decisively! To receive your FREE report now, Call 800-289-2646 or register HERE.
US economy ‘out of whack,’ headed for downturn: Alan Greenspan -Fox Business
"Former Federal Reserve Chairman Alan Greenspan told FOX Business on Thursday the U.S. economy is poised to slow down in the coming years. 'We are moving towards stagflation and in the process of moving in that direction, it feels good, but it's a false dawn,' Greenspan told Maria Bartiromo on 'Mornings with Maria.' While signs of a slowdown are already evident, he said the 'longer-term does not exhibit a particularly powerful growth rate.'....'The fiscal system is out of whack,' the former Fed chair said. 'And while I approve wholeheartedly of the corporate tax cut and deregulation, the corporate tax cut unquestionably causes the deficit to rise and we are not funding it by other means.' He added, 'as long as the funding is not there, productivity cannot grow and accelerate.'"
Nearly Half Of Americans Embrace 'Guaranteed Jobs' - An Idea Straight Out Of The Soviet Union -Investors
"Big Government: 'Guaranteed jobs' is fast becoming the latest rallying cry for Democrats. And a new poll finds that 46% of Americans approve of it. Don't read too much into that poll result. Last week, we noted that a liberal policy group urged Democrats at a leadership meeting to adopt 'guaranteed jobs' as a pillar of their economic plan. In short order, Bernie Sanders said he would soon unveil his plan to achieve that. Under it, anyone who 'wants or needs' a job but couldn't find one on their own would be guaranteed a government job paying $15 an hour and generous benefits....The liberal Center on Budget and Policy Priorities figures the annual price tag at $543 billion - roughly equal to the entire defense budget....That's almost certainly a lowball estimate. In addition to the 9.7 million the CBPP counts as unemployed, there are nearly 10 times as many people who aren't officially in the labor force because they aren't looking for work....Yet the pollsters don't ask about cost, or the massive tax hike required to finance it....But there's another bit of context that Bernie Sanders and Co. would probably rather you don't know about. And that is the fact that the idea has already been tried - in the Soviet Union....We all know how well that experiment in guaranteed employment turned out....It's also an unfortunate indicator of how many people in the U.S. are ignorant of basic economics."
5.2.18 - A Billionaire's Big Gold Bet
Gold last traded at $1,312 an ounce. Silver at $16.37 an ounce.
NEWS SUMMARY: Precious metal prices rose after the Fed's inflation statements sent the dollar lower. U.S. stocks rose as the Fed kept interest rates unchanged and hinted at stronger economic growth.
FED Leaves Rate Unchanged: Hawkish On Inflation, Dovish On Growth -Zero Hedge
"With little expectation for a rate-hike today (66% chance of no change), market participants are scouring every word and nuance for signals that The Fed is more (or less) worried about inflation (PCE hit 2% on Monday) and may hike faster (or slower); and whether recent economic weakness is merely 'transitory' or reflexively driven by The Fed's tightening actually impacting financial conditions. Key Takeaways from FOMC lockup: Change in inflation language: 'On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent'. FOMC statement now twice uses the word 'symmetric' to describe its inflation objective, emphasizing they view a persistent overshoot the same way that they view a persistent undershoot. 'Risks to the economic outlook appear roughly balanced'. No rate change, as expected, vote unanimous. Interestingly, the sentence from the March statement about a strengthening economic outlook isn't included in today's statement. So it seems The Fed is hawkishly monitoring rising inflation and dovishly aware of a slowdown in the economy's growth."
Gold: This billionaire has put half his net worth into gold -The Economic Times
"Some big investors see warning signs ahead for markets but are holding their positions. Egyptian billionaire Naguib Sawiris is taking action: He's put half of his $5.7 billion net worth into gold. He said in an interview Monday that he believes gold prices will rally further, reaching $1,800 per ounce from just above $1,300 now, while 'overvalued' stock markets crash. 'In the end you have China and they will not stop consuming. And people also tend to go to gold during crises a....He's from a family of investors. Nassef Sawiris, Naguib's youngest brother and the richest man in Egypt, is the biggest shareholder and chief executive officer of fertilizer producer OCI NV. He's also the biggest shareholder in contracting and engineering company Orascom Construction Ltd. He re-based his companies outside Egypt after a tax dispute with the Muslim Brotherhood government in 2013....'In my family we are investing a lot right now because we see the opportunities,' he said."
Ron Paul: Buy Gold To Protect Against 50% Equity Correction -Kitco
"Former Congressman and Presidential candidate Ron Paul is recommending investors look to gold to protect themselves from a correction in equity market. Tuesday, in an interview with CNBC, Paul said that he could see lower equity markets as the U.S. struggles with burgeoning debt. 'The deficit is skyrocketing like never before,' Paul said in the interview. 'The market is destined to go down.' He explained that the Federal Reserve's quantitative easing program, which pumped massive liquidity into markets had created significant bubbles throughout the financial sector. He added that he could see equities fall 50% from current levels. 'Ultimately, when these corrections have to occur, they always go down a lot more than people expect. Just like they go up higher than people expect,' Paul said. 'A 50 percent correction with all the distortion that has existed for all these years - I think it's very possible.'....Along with growing deficits, Paul also said that the U.S. economy isn't as strong as it might appear. He described the economy as a 'real mess.' In this environment, Paul said that he likes gold as a safe-haven asset and see the potential to expand his exposure to the yellow metal."
Market correction of 30-40% could be coming soon, investment guru Mark Mobius warns -CNBC
"The long bull run for stock markets could be due a correction, according to one prominent emerging markets investor. 'There could be a substantial correction in the markets,' Mark Mobius, founding partner at Mobius Capital Partners, told CNBC's Joumanna Bercetche Wednesday. A 30 to 40 percent adjustment is 'not unreasonable,' he said, speaking on developed as well as emerging markets. 'I'm not predicting that, I'm just saying we've got to be ready for that,' he added. Mobius cited the long U.S. bull market, since 2009, as the reason for the correction. 'The catalyst I believe will come from continuing increases in interest rates. The (Federal Reserve) is definitely moving in that direction,' he said. 'When the Fed moves, everybody else has got to move in that direction.' 'Any event could also be a trigger,' he explained. 'But most importantly we've seen this long bull market that needs a correction,' he said."
5.1.18 - War on Cash Gets Worse
Gold last traded at $1,306 an ounce. Silver at $16.12 an ounce.
NEWS SUMMARY: Precious metal prices drifted lower on profit-taking and dollar strength as the Fed meeting begins. U.S. stocks fell on investor skittishness, earnings angst and the start of a historically rough period for the market.
Why 'sell in May and go away' remains true for Wall Street -Crudele/New York Post
"Sell in May and go away. That's an old Wall Street saying concerning the stock market that - basically - has no basis in logic except for the fact that if enough investors know it, hear it and believe it, the advice tends to come true...You might have noticed that a lot of people have been selling stocks for weeks, despite the fact that corporate profits have been excellent thanks to the tax law changes. I guess they believe in the ditty so much they wanted to get a jump on everyone else....In fact, if you sold stocks in January - when the Dow Jones industrial average was at a record 26,616 and up 5.6 percent for that month - and took off, you would have made out great so far....Professional money managers often make most of their money early in the year. And when they do, they can relax during the summer - before returning to work after Labor Day. Unless something big happens in the world economy or in Washington - and that could happen this year with all that's going on politically - then not making major investment decisions during the summer is often the smartest non-move."
The Seven Pillars of Gold -King/Daily Reckoning
"You need to own gold...I lay out seven reasons below, in what I'm calling the 'Seven Pillars of Gold.' Each 'pillar' reinforces the argument for holding gold. Pillar One: Oil prices are rising...From a price in the $40 range a mere six months ago, we're now into the $70s per barrel and higher prices are forecast. Pillar Two: Interest rates are rising...by 2028 the federal budget will spend more on interest payments ($1 trillion/year) than on defense (currently $800 billion). Pillar Three: The petro-yuan...China's ultimate goal is to convince Saudi Arabia to take yuan in exchange for oil, and abandon the 45-year link to the petro-dollar. Pillar Four: Currency Wars...Russia and China could team up to combine their respective gold resources, and create a rival currency to the dollar. Pillar Five: Tariffs, sanctions and potential trade wars...Trump may or may not succeed in his quest to 'Make America Great Again'...if our nation gets into a trade war, you better have some gold in the vault. Pillar Six: War...We're living in a time of risky geopolitics, right at the edge of true war...from the Baltics to the Black Sea, to the Persian Gulf to the South China Sea, Korea and more. Pillar Seven: Peak Gold...gold output globally has plateaued just now; it's likely declining in years to come. Gold is in a breakout pattern, awaiting its moment. The price has been dammed-up for a while, via all manner of manipulations. But that golden dam is ready to break."
The War on Cash Is Even Worse than It Seems -Dowd/Mises
"I believe that those who advocate or who are even willing to entertain the abolition of cash are onto a seriously bad idea....The core issue in the War on Cash is whether people should be compelled not to use cash, and this issue is of profound importance....We should also consider the impact that banning cash would have on vulnerable groups. To work as intended, everybody would have to have the digital technology and be able to work it. Well, many people don’t have that technology, and there are many more who would struggle to work with it and/or would be made very vulnerable if they were forced to depend on it....The World Bank estimates that there are two billion adults without bank accounts, and even those who do have them still often rely upon the informal flexibility of cash for everyday transactions....I shudder to think of the unintended consequences of such a voyage into the monetary unknown..."
The U.S. Just Borrowed $488 Billion, a Record High for the First Quarter -Bloomberg
"U.S. Treasury Secretary Steven Mnuchin said he's unconcerned about the bond market's ability to absorb rising government debt after his department said it borrowed a record amount for the first quarter....Earlier on Monday the Treasury said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated, according to a statement released in Washington....The U.S.'s need to issue more Treasuries is expected to grow as the fiscal picture deteriorates. The budget deficit widened to $600 billion halfway through the fiscal year, as spending increased at three times the pace of revenue growth in the October-to-March period, according to Treasury figures released earlier this month. Tax and spending measures approved by Congress and President Donald Trump are expected to push the budget gap to $804 billion in the current fiscal year, from $665 billion in fiscal 2017, and then surpass $1 trillion by 2020, according to the Congressional Budget Office."