10.14.19 - Did China Win the U.S. Trade Truce?
Gold last traded at $1,497 an ounce. Silver at $17.71 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on trade worries amid the Fed's new stimulus program. U.S. stocks drifted as new worries around a U.S.-China trade agreement emerged despite Friday’s announcements.
China Emerges With Wins From U.S. Trade Truce -Wall Street Journal
"China is emerging with wins in this week's trade talks, with the U.S. shelving new tariffs against Beijing while leaving many demands to be worked out later in return for an assurance of increased agriculture purchases. The two countries took an initial step Friday to cement a trade agreement that had been derailed for months. President Trump said the U.S. would call off planned tariff increases on Chinese goods next week while Beijing would buy $40 billion to $50 billion worth of American agricultural products - which China hasn't publicly confirmed....For now the truce opens an opportunity for Beijing to kick down the road concessions that it doesn't want to make. Whether those hard issues ever get resolved is a question. The Chinese leadership feels that time is on its side, believing President Trump is under pressure to make compromises as part of his re-election bid next year. 'If you're China, you're pretty happy with the outcome,' Arthur R. Kroeber, founder of Beijing-based consultancy Gavekal Dragonomics, said of the latest trade talks. 'China's negotiation position has always been, the longer you can extend the talks the better.'....'China's position of safeguarding the nation’s core interests and the fundamental interests of its people cannot be shaken,' said Communist Party mouthpiece People's Daily on Friday. 'On issues of principle, it is impossible to engage and impossible to solve the problem by exerting pressure on the Chinese side.'"
"If The Entire System Collapses, Gold Will Be Needed To Start Over" -DNB/Zero Hedge
"An article published by the De Nederlandsche Bank (DNB), or Dutch Central Bank, has shocked many with its claim that 'if the system collapses, the gold stock can serve as a basis to build it up again. Gold bolsters confidence in the stability of the central bank's balance sheet and creates a sense of security.'....It is stunning to see a mainstream financial institution open up about the superior value of limited supply, non-fiat, sound money assets. It is also hypocritical given the diametrically opposed Keynesian practices regularly engaged in by central banks and official institutions worldwide: after all, just a few months back, the IMF published a paper bashing Germany's adoption of the gold standard in the 1870s as the catalyst for instability in the global monetary system...The Dutch Central Bank is admitting not only did gold not destabilize the monetary system, but it will be its only savior when everything crashes. The article, titled 'DNB's Gold Stock' states: 'A bar of gold retains its value, even in times of crisis. This makes it the opposite of shares, bonds and other securities' all of which have inherent risk and prices can go down....Why this sudden admission of what goldbugs have been saying for years? Perhaps it has to do with the fact that on October 7, the bank announced it would soon be moving a large part of its gold reserves to 'the new DNB Cash Center at military premises in Zeist.' Almost as if the Netherlands is preparing for the grand reset, and is moving its most valuable asset to a 'military' installation just for that purpose."
Gold prices rise as the Fed starts a 'massive' bond buying program -Marketwatch
"Gold prices rose Monday, looking to post their first gain in three sessions, finding support as the so-called 'phase one' of the U.S.-China trade deal reportedly hit a snag and after the U.S. Federal Reserve announced last week that it will start expanding its balance sheet next week. 'The focus on Friday was on the China-U.S. trade deal, which appears to be in limbo pending further talks,' Peter Spina, president and chief executive of GoldSeek.com, told MarketWatch. Wariness over the strength of an agreement hammered out between the U.S. and China last week was growing on Monday after a report that Beijing will insist on more talks with the U.S. before signing any such deal. As big as the trade talks news was on Friday, it was 'a giant distraction from the real news,' said Spina. 'In a very quiet and sneaky way, the Federal Reserve announced the start of a massive bond buying program.' The Fed, in a surprise announcement, set in motion a plan Friday to ease unexpected strains seen in short-term money markets last month....Despite the size of the bond buying program, 'the Fed does not wish for us to refer to it as quantitative easing or QE4,' said Spina. 'Yet, this is exactly what the Fed is doing but due to the timing and enormity of the program.'"
America's China gamble -Ponte/WND
"In 1972, President Richard Nixon took one of the greatest gambles in geopolitical history. He bet America's future on successfully driving a wedge between the world's two greatest Communist powers, the Soviet Union and the People's Republic of China. Nixon launched this wager with a visit 'opening' direct U.S. relations with China. He met Chairman Mao Zedong, the dictator responsible for killing at least 65 million Chinese, and offered to make Red China a partner in the capitalist World Trade Organization. Nixon gambled that he could transform China into a successful capitalist state that embraced the freedom needed to achieve prosperity. For a time it seemed Nixon's wager might be winning...Harvard historian Niall Ferguson was cheered by the symbiotic co-prosperity linking Communist China and capitalist America. Ferguson named this merger: 'Chimerica.'....That moment of optimism is now fading, leaving many wondering if it was always a mirage....Xi Jinping is building a totalitarian surveillance state denying 'social credit' spending to the Politically Incorrect. This power comes in part from Google, whose leftist programmers refuse to help our Pentagon but eagerly arm Communist China with artificial intelligence technology...Xi has already called on the world to choose between China and America...Many Americans are already teaching their children Spanish and their grandchildren Chinese, because they fear that Nixon's gamble will be lost."
10.11.19 - Gas Prices Near $6 a gallon in L.A.
Gold last traded at $1,488 an ounce. Silver at $17.54 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Friday amid upbeat political rumors. U.S. stocks rallied after an upbeat Trump tweet prompted traders to grow more optimistic of a limited trade deal between China and the U.S.
QE 4 "Not A QE" Begins: Fed Start Buying $60BN In Bills Per Month Starting Next Week -Zero Hedge
"Just one day after we laid out what Goldman's revised forecast for the Fed's 'NOT A QE' will look like, which for those who missed it predicted that the Fed would announce 'monthly purchases of about $60BN for four months, split across Treasury bills and short maturity coupon Treasuries, in order to replenish the roughly $200bn reserve shortfall and support the pace of growth in non-reserve liabilities', the Fed has done just that and moments ago the US central bank announced it would start purchasing $60BN in Bills per month starting October 15....But wait there's more, because just as today's surprising spike in repo use suggested, mere 'NOT A QE' may not cut it, and just in case, in order to provide an 'ample supply of reserves', the Fed will continue with $75BN in overnight repos and $35 billion in term repos twice per week, 'at least through January of next year.'....So with a combined firepower between POMO and Repo in the $100s of billions per month, someone will still have the gall not to call this QE 4 'NOT A QE'?"
Federal Reserve's "Independence" Masquerade -AIER.org
"Federal Reserve Chairman Jerome Powell recently extolled the importance of central bank independence...The Fed has always been a creature of politics...While the Fed would no longer de facto underwrite Treasury securities, it instead shifted toward a system of social-managerial control with its chief policy makers at the helm. Repeated bailouts of financial organizations, both traditional banks and otherwise, over decades demonstrated the Fed's allegiance to special interests...The Fed doesn't want to be independent from politics. It just wants to be independent from any kind of political force that would turn a critical eye to its dealings....If the Fed really wants political independence, the solution is a constitutional separation between the central bank and the ordinary organs of politics, through creation of binding rules. But it doesn't want that....Both strongman populism and oligarchic technocracy are odious, and contrary to the foundations of a constitutional republic."
In an illusory world – gold is the truth-teller -Gold Switzerland
"Around the world, there are millions of investors who every year spend billions of hours trying to achieve a decent return on investments. The number of areas people can invest in today is mind boggling. But when it comes to financial markets, the great majority invests in stocks. And of those, very few outperform the various stock market indices. Most of the investment industry is just a massive system of mediocrity, self-interest and navel-gazing. And this is done at the expense of ordinary people and pensioners who lose a major part of their potential return or pension by paying massive fees to an inefficient and poorly performing industry. So we have a mediocre asset management industry achieving poor returns on average at a time when all asset markets are setting records. What will then happen when stock markets turn down. Even worse, what happens when markets crash which is extremely likely to happen this year or at the latest in early 2020....But what will be different this time is that the market, will call the tricksters' bluff. The Eureka moment for the world will be when the coming 'unlimited-money-creation-out-of-nowhere' trick will not work. For decades the central bankers have got away with printing money that they told the world has real value. Gold has of course always revealed the deceit of central bankers by destroying the value of paper money....Gold is a truth teller and consequently reveals governments' and central banks' deceitful actions in creating false money."
Gas prices exceed $5 a gallon at some Los Angeles area stations -Fox5NY
"As gas prices reached its highest level in the state of California since 2015, some Los Angeles area gas stations are charging more than $5 a gallon. The average price of a gallon of self-serve regular gasoline in Los Angeles County was $4.25 on Wednesday, according to figures from the AAA and Oil Price Information Service. The average price is 4.5 cents higher than one week ago, 57.6 cents more than one month ago and 37.1 cents greater than one year ago. It has also risen 86.4 cents since the start of the year. Gas prices began increasing rapidly last month after Saudi Arabia oil production facilities were attacked, and the increases sharpened after three Los Angeles-area refineries slowed or halted production due to maintenance issues and no imported gasoline was available to make up for the shortfall, according to Jeffrey Spring, the Automobile Club of Southern California's corporate communications manager. Local refineries had already cut back production of summer-blend gasoline in anticipation of switching to selling the winter blend beginning Nov. 1, creating even more of a shortage."
10.10.19 - Young People Quitting Their Jobs?
Gold last traded at $1,500 an ounce. Silver at $17.60 an ounce.
NEWS SUMMARY: Precious metal prices dipped Thursday on profit-taking ahead of U.S. China trade talks. U.S. stocks rose after President Donald Trump said he will meet with Chinese Vice Premier Liu He on Friday, raising hopes the two countries could make progress on the trade front.
Why gold prices are about to skyrocket 50% higher -Tucker/Kitco
"Gold could rally another 50% due to the enormous amount of debt hanging around the world, this according to E.B. Tucker, Director of Metalla Royalty & Streaming. 'The amount of debt is growing tremendously, with the U.S. government's growing by billions and billions of dollars a day. Corporations have to borrow more and more just to function. Interest rates are negative, so they're being paid to borrow, so debt is growing really quickly. You're probably pushing the upper limits of $300 trillion of debt at some point, so I don't see that slowing down, and I think gold has to play catch up,' Tucker told Kitco News on the sidelines of the Denver Gold Forum."
Fed Chair Powell Announces QE4... But "Don't Call It QE4" -Zero Hedge
"Fed Chair Powell appears to have announced QE4 (but do not call it QE4!). Discussing the liquidity shortage and repo-calypse, Powell said...'While a range of factors may have contributed to these developments, it is clear that without a sufficient quantity of reserves in the banking system, even routine increases in funding pressures can lead to outsized movements in money market interest rates...Indeed, my colleagues and I will soon announce measures to add to the supply of reserves over time...I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis.' Roughly translated: Don't confuse balance sheet growth for 'reserve management' with balance sheet growth for 'stock market management'. None of this should come as a surprise as we warned in September that 'The Fed Will Restart QE In November...'"
Young people are quitting their jobs in droves. Here's why -Fox Business
"About half of millennials and 75 percent of Gen Zers have quit their jobs for mental health reasons, according to a new study conducted by Mind Shares Partners, SAP and Quatrics. It was published in Harvard Business Review. That's compared to just 20 percent of respondents overall who said they've voluntarily left a job in order to prioritize their mental health - emblematic of a 'shift in generational awareness,' the authors of the report, Kelly Greenwood, Vivek Bapat and Mike Maughan, wrote. For baby boomers, the number was the lowest, with less than 10 percent quitting a job for mental-health purposes. It should come as no surprise that younger generations are paving the way for the de-stigmatization of mental health. A Wall Street Journal article published in March labeled millennials the 'therapy generation,' as todays 20- and 30-somethings are more likely to turn to therapy, and with fewer reservations, than young people in previous eras did....A Blue Cross Blue Shield study published in 2018 revealed that major depression diagnoses surged by 44 percent among millennials from 2013 to 2016. Increasingly, employees (about 86 percent) want their company to prioritize mental health....In the study, millennials, ages 23 to 38, were 63 percent more likely than baby boomers, 55 to 73, to know the proper procedure for seeking mental health support from the company."
Dr. Corsi Decodes the News -Corsi Nation
"Join Dr. Jerome R. Corsi, Ph.D. on 'Dr. Corsi Decodes the News' Monday - Friday on YouTube; and Dr. Corsi's Rx for America on Patreon every Thursday, as he discusses the latest news and events as they happen and in-depth. Dr. Corsi's insight provides a clearer image to all Americans on what they can do to take back their country and their freedoms." Swiss America is a proud sponsor of CorsiNation.com and provides daily news updates to his readers and viewers.
10.8.19 - Economists See Rising US Recession Risk
Gold last traded at $1,504 an ounce. Silver at $17.73 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying amid rising geopolitical risks. U.S. stocks fell sharply as investor optimism around the upcoming U.S.-China trade talks faded.
Economists lower outlook, see rising risk of recession because of Trump’s trade war -CNBC
"The risk of a recession is rising, and the main threat to the economy is the Trump administration's trade war, according to a survey released Monday by the National Association for Business Economics. 'The rise in protectionism, pervasive trade policy uncertainty, and slower global growth are considered key downside risks to U.S. economic activity,' said NABE survey chairman Gregory Daco, chief U.S. economist, Oxford Economics....The results of the survey, conducted the week of Sept. 9-16, come as many analysts see warning signs in the latest U.S. economic indicators, including a plunge in manufacturing activity to more than a 10-year low in September and a sharp slowdown in service-industry growth to levels last seen in 2016....The panel also expects industrial production to slow sharply from 4% in 2018 to just 0.9% in 2019. That represents a big downward revision from the previous estimate of 2.4% in the June survey. Rising pessimism about corporate profits and a wider economic slowdown have rattled the stock market. Last week, Wall Street's main indexes suffered big one-day drops after employment and manufacturing data suggested that the U.S.-China trade war is taking an increasing toll on the U.S. economy."
In the Next Crisis, Both Warren and Trump Will Push Towards More Inflation -Bonner/Bonner And Partners
"We are in an Inflate-or-Die trap. No one wants to face the music and admit that the economy has been phonied up with fake money, unpayable debt, and falsified prices. Nobody wants to go through the pain and humiliation of rehab. So what's the alternative? Inflation – more debt, more phony prices, and more fake money. For the last 30 years, the Federal Reserve added money via underpriced short-term loans. Speculators, banks, and insiders took the money and used it to run up stock and bond prices. The rich got much richer; the poor stayed poor. Almost no one complained, because they were told that the 'wealth effect' was making us all better off....Now, we are approaching a new stage. With Biden tainted by Ukraine... and Bernie by age and infirmity... Elizabeth Warren is the likely Democrat nominee....Ms. Warren pretends to be smart, well-informed, and sophisticated. She believes she is on top of the issues, at home in university coffee shops, and at ease with the cognoscenti, literati, and transgenderati. Mr. Trump, on the other hand, is a pro-wrestling fan... a tough, street-smart hustler who doesn't pay his bills, doesn't read books, and doesn't think he needs to study issues in depth. But when push comes to shove in the next crisis, both Warren and Trump will push in the same direction: towards more inflation....No candidate – neither Republican nor Democrat – is proposing to return to honest money, market-set price signals, and balanced budgets....We have a president who thinks he knows better than the market where interest rates should be...and a leading lady on the Democrat side who thinks the whole economy can be marshalled to correct the world's injustices....Some say Ms. Warren is 'unelectable.' But they said that about Mr. Trump too."
U.S. Economy Remains in an Intensifying Downturn -ShadowStats Flash Update
"- Despite Headline Unemployment at a 50-Year Low of 3.52%, Broader Unemployment Measures and Employment Stress Levels Still Signal Deep Recession. - September Payrolls Gained 136,000 (181,000 Net of Revisions), While Year-to-Year Payroll Growth Held at a Low of 1.4%, Last Seen Going Into and Coming Out of the Great Recession. - August Trade Deficit Widened, With Negligible Impact on Third-Quarter GDP Outlook. - October FOMC Meeting Should See a 50-Basis-Point Rate Cut and Renewed Quantitative Easing. - September Money Supply M3 Annual Growth Jumped to a 10-Year High."
The Obscure Origins of Yom Kippur -Haaretz
"It is a solemn day. The synagogues are packed with men and, usually in a separate section, women - often dressed in white, all praying that their sins be forgiven. Many of the worshipers wear Crocs, as leather shoes are not permitted. Yom Kippur in Israel is a special day indeed, but it is a far cry from the Day of Atonement of old....The three biblical mentions of the Day of Atonement (Numbers 29:7-11, Leviticus 16:1-34, and Leviticus 23:26-32) were inserted by priests during the Second Temple period to validate new rites added to purify the Temple in advance of the most important holiday in the Jewish calendar at the time, Sukkot. The priests of the Jerusalem Temple who inaugurated Yom Kippur seem to have had the 12-day Babylonian festival marking the new year, Akitu, in mind...Kippur meant 'to uncover' or 'to remove impurity,' which means a better translation of Yom Kippur to English would be 'Day of Purification.'....The practice of transferring the disfavor of a deity to an animal that is then removed from the community, what we call a 'scapegoat' based on the biblical passage....Then the goat would be led into the wilderness by a specially appointed man, usually a priest, accompanied by the city's dignitaries....Yoma ends with a discussion on whether all transgressions are remitted on Yom Kippur. It says that those transgressions carried out against other person's are not, while those against God are. This is the origin of the tradition of asking your fellow man for forgiveness on the days leading up to Yom Kippur. Naturally, once the Temple was destroyed by Titus in 70 CE, the main function of Yom Kippur, purifying the Temple in preparation for Sukkot, could not continue. Instead a new form of Yom Kippur formed over the centuries, centered on acknowledgement of wrongs, atonement - and praying for forgiveness in synagogues."
*Swiss America's offices will be closed Wednesday in observance of Yom Kippur*
10.7.19 - "Money's Not Worth Anything Anymore"
Gold last traded at $1,492 an ounce. Silver at $17.42 an ounce.
NEWS SUMMARY: Precious metal prices eased slightly Monday awaiting fresh economic indicators. U.S. stocks were little changed amid doubts of a breakthrough in U.S.-China trade talks, which are set to begin later this week.
"Money's Not Worth Anything Anymore" - Ex-Credit Suisse CEO Blasts "Crazy" Negative Rates -Zero Hedge
"Oswald Gruebel, who served as Credit Suisse CEO from 2004 to 2007 and as UBS Group AG's top executive from 2009 to 2011, has slammed ECB policy in an interview with Swiss newspaper NZZ am Sonntag. 'Negative interest rates are crazy. That means money is not worth anything anymore,' Gruebel exclaimed. 'As long as we have negative interest rates, the financial industry will continue to shrink.' Gruebel is not alone. As European bank bosses cast their eyes at their share prices, they are fighting back, some have said - biting the hand that feeds, in their attack on ECB policies, warning of severe consequences to asset prices and the broader economy. As Bloomberg reports, The ECB's imposition of negative interest rates have created an 'absurd situation' in which banks don't want to hold deposits, rages UBS CEO Sergio Ermotti....Deutsche Bank CEO Christian Sewing warned that more monetary easing by the ECB, as widely expected next week, will have 'grave side effects' for a region that has already lived with negative interest rates for half a decade. 'In the long run, negative rates ruin the financial system,' Sewing said....'What’s really worrisome: central banks have hardly any tools left to effectively mitigate a real economic crisis,' said Sewing."
This Is When the Market Goes Haywire -Stansberry/American Consequences
"On August 14, 2019, the Global Financial System Barometer ('GFSB') – the nominal yield of the U.S. government’s benchmark 10-year Treasury bond minus inflation – broke through a critical monetary threshold...And the GFSB, also referred to as the 'real' 10-year yield, plays a significant role...The chart explains what I'm talking about...As you can see, when the GFSB fell below the 2% mark (on the left scale), it heralded the beginnings of a true firestorm....If you look closely, you'll notice that the GFSB collapsed well past its 'resistance' point at 2% in early 2008. It happened just before investment banks began failing and the entire mortgage industry collapsed. What is important is that after dropping through the 2% threshold, the GFSB continued to fall until late 2012. Gold rallied this entire time...And then, suddenly, something changed... What was it? The system began to reflate... It began to work again. But it never made it back to the 1% line, much less the 2% level that ultimately began this crisis. In 2015, gold seemed to bottom at less than $1,100 per ounce. Last month, gold broke out to a six-year high of more than $1,500 per ounce...Meanwhile, the GFSB turned down again....This is wildly bullish for gold. I've predicted that gold would reach $2,500 per ounce....So what should you do today? I would urge you to consider adding a significant amount of gold and gold-related stocks to your portfolio...If we see 'real' yields on the 10-year Treasurys hold below zero, I expect gold will surge to more than $2,500 an ounce very quickly...on its way to $10,000 an ounce."
Will US dollar devaluation be Trump's next sudden move? -The Hill
"President Trump has waged war on the U.S. Federal Reserve (Fed) for more than a year, launching salvos of tweet-bombs laced with criticism and ridicule. Trump's main points have been that the Fed is too hawkish, and the U.S. dollar is too strong....A move by Trump to proactively de-value the U.S. dollar would be the monetary policy equivalent of the nuclear option, a weaponization that could set in motion an ugly currency war and a race to the bottom....The Fed faces a complex situation, and Powell is moving in the right direction, albeit very slowly, certainly too slowly for Trump. Capital markets have reached critical levels. There is a lot of uncertainty in the world apart from trade discussions between the U.S. and China. Something must give. No one expects a trade deal. The Chinese seem dug in and have prepared for difficult times. Trump has said the economic weakness associated with tariffs is a price worth paying to get to fair trade. The biggest surprise would be the announcement that both parties have come to terms. This would take the pressure off Trump to resort to the nuclear option."
Can Democrats Take Impeachment Seriously? -Noonan/Wall Street Journal
"It is assumed the House will impeach the president. If that is so, how is the great question. If it is a straight party-line vote, if it's shirts vs. skins, then the Democrats will have their victory in the House, quickly fail in the Senate, and not win in America. This cannot be one party doing its one-party thing. I think Nancy Pelosi knows that. The reason she did not put forward a formal resolution calling for an impeachment inquiry is said to be that she didn't want to jeopardize her moderate members from districts that voted for Mr. Trump....I suspect another reason Mrs. Pelosi didn't call a vote is that she knew the outcome would have been completely down-the-line partisan: Dems on this side, Reps on that. And that wouldn't look good. It would allow more than half the country to dismiss the effort as more party mischief. Here is a very open question: Can House Democrats control themselves?...Can they establish an air of earnestness and care, of fairness, of investigative depth?...There's a good-faith deficit in Congress now as it becomes more brutal and partisan. It leads to losing sight of the big picture, which is what is good for America....Here we get to Adam Schiff, chairman of the Intelligence Committee...He will be a face, maybe the face, of the impeachment hearings. He has already stepped in it with his tendentious paraphrasing of Mr. Trump's conversation with the president of Ukraine, a so-called parody that was bizarre, unserious, embarrassing....Mr. Schiff's weakness, at least in public, appears to be lack of judgment. You could see it last week in his questioning of the acting director of national intelligence, Joseph Maguire."
10.4.19 - The Fed's Immoral Inflation Policy
Gold last traded at $1,505 an ounce. Silver at $17.55 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Friday, ending the week with about a 1% increase, amid market volatility. U.S. stocks traded higher following the release of the latest U.S. jobs report, trimming their losses for the week.
Five reasons why gold is still worth owning -Marketwatch
"Given the big outperformance in gold, it's time to check back in with my gold gurus for a read on what you should do with gold now...In the medium term, there are still many solid reasons to own the yellow metal...In the short term, the next move in gold really comes down to what happens with the economy....It's worth owning some gold and gold-mining shares for five reasons. 1. Gold helps you play defense - A big risk now is that people talk the economy into recession by damaging business and consumer confidence...2. Central banks love gold again - Central banks are purchasing gold in volumes not seen in 50 years...3. The U.S. may be on course to debase the dollar - As both political parties throw caution to the wind on deficit spending, the U.S. is now borrowing almost a trillion dollars a year...'I would not be surprised to see gold at $2,000 an ounce in two years,' says Tom Winmill, who manages the Midas Fund...4. Gold has momentum - Money flows into gold mutual funds managed by U.S. Global Investors GROW, +1.03% shot up considerably in August and September...5. There may be supply shortages - At the Denver Gold Forum in September, Barrick Gold cautioned that mining production could fall by 45% over the next 10 years."
The Fed's Immoral Inflation Policy -Luddy/American Spectator
"The Fed's inflation policy is immoral and unethical, and it undermines the original intent to foster stable prices of the goods and services we purchase. Inflation undermines private property rights and steals money from the average person by reducing purchasing power every year. Prior to the creation of the Fed in 1913, America experienced deflation: the cost of goods was low due to the Industrial Revolution and the gold standard. Deflation increases the purchasing power of the dollar and can occur from innovation and disruptive competition. Think of the impact Uber and Amazon have each had on lowering prices on multiple products and services...In 1960, a dollar would purchase four gallons of gas or four loaves of bread. You could attend many private colleges for less than $1,000 per year, and the interest rate for savers was 3 percent. In 2012, the Federal Open Market Committee issued this statement: 'The Committee judges that inflation at the rate of 2 percent... is most consistent over the longer run with the Federal Reserve's statutory mandate.' This statement is in clear contradiction to the Fed's mandate for stable prices...The Fed simultaneously reduces the value of the dollar and arbitrarily keeps short-term rates low. Both of these policies undermine economic growth and eliminate the ability of the middle class to save and prosper. When inflation exceeds interest rates, there is zero incentive to save....According to the Bureau of Labor Statistics, during the entire 19th century the value of the dollar increased. Deflation actually allowed the dollar to purchase more, which is a great outcome. Because of inflation, however, it now takes $25 to purchase what one dollar could buy when the Fed was created in 1913. The Fed must discontinue its interventions to control market interest rates and let the free market prevail."
Hurry Up and Impeach -Rove/Wall Street Journal
"It has been only 10 days since Speaker Nancy Pelosi declared that the House was 'moving forward with an official impeachment inquiry' of President Trump, and Democrats are already blowing it. They are moving much too quickly. Democrats toss around the word 'urgent' as if speed is the prime imperative - more important than finding the truth or following procedure...Mrs. Pelosi told reporters, 'We have to strike while the iron is hot.'....The Democrats' need for speed has already resulted in unfairness....The rhetoric of House Democrats has made them appear inept - and appearances aren't always deceiving. Consider Mr. Schiff's stunt in opening the Intelligence Committee's hearing on Mr. Trump's conversation with the president of Ukraine. Mr. Schiff channeled his inner Martin Scorsese to revise the call's transcript, adding new words to make it sound like a scene out of 'Goodfellas.' He read his treatment to a national cable audience, only later admitting it was a 'parody.'....Yet all this zeal is unlikely to convince America that it's right to overturn the last presidential election and pre-empt the next one - only a year away - by evicting the occupant of the White House. Impeachment will drown out public awareness of legislation House Democrats passed to 'lower drug costs, increase worker pay and clean up Washington,' as their website proclaims, leaving them to look impeachment-obsessed. The good news for Democrats is that impeachment will also drown out their caucus's goofy ideas. Rep. Alexandria Ocasio-Cortez introduced six bills last week to create a 'just society' with national rent control, federal benefits for illegal aliens and more. The program's idiocy makes her Green New Deal look like the Federalist Papers....Rushing to remove this president may be cathartic for them, but their transparent partisanship and unfairness will ensure that they fail - leaving the country even more divided and bitter."
Why we ditched the Financial Independence/Retire Early (FIRE) movement -Marketwatch
"Early retirement is something most people write off as a pipe dream. For me, I didn't even know it was possible until I read some articles online about people my age throwing in the corporate towel forever. Turns out, what it takes to retire early was way more than my husband and I bargained for - and not worth our happiness....If you're not familiar with it, FIRE stands for Financial Independence/Retire Early, and it totally blew my mind. FIRE adherents are typically folks in their 20s, 30s, and 40s who are saving upward of 70% of their incomes in an effort to stash away 25x their annual living expenses. During early retirement they're pulling roughly 4% out of their nest eggs each year to live on...Once they hit their magic number, they're ditching their fluorescent-lit corporate cubicles for lives of adventure, travel, and, oftentimes, side hustles to support their flexible lifestyles and subsidize downturns in investment returns. After watching my parents struggle with their finances in retirement...the idea of FIRE was appealing...Before I knew it, I was down a virtual rabbit hole reading every single FIRE blog I could find and fantasizing about stepping away from my own corporate cubicle to live a life of freedom....Our extremely frugal lifestyle took shape by cutting out almost everything we ever enjoyed....But then something unexpected happened. As we watched our net worth climb higher and higher, we realized that our happiness level seemed to be in free fall....Time dragged on and after about two years of extreme frugality, my husband and I just couldn't shake the feeling of self-imposed deprivation....We decided the risk of retiring early, considering life's unexpected curveballs, simply wasn't worth the reward. ....Our balanced financial approach and overall smart money moves are creating a life of options and the life we want to live both now and later and we couldn't be happier."
10.3.19 - Feds Expand Risky Mortgage Exposure
Gold last traded at $1,507 an ounce. Silver at $17.60 an ounce.
NEWS SUMMARY: Precious metal prices rose again Thursday on downbeat economic data. U.S. stocks traded mixed as expectations of further easing by the Fed offset negative manufacturing data.
Gold prices could soar to $2,000 next year -CNBC
"Gold prices could surge by about 30% to as high as $2,000 per ounce next year, according to David Roche, president and global strategist at Independent Strategy. The price of spot gold currently stands at around $1,500 per ounce. 'What my gut says is that cause of the vilification of fiat currencies by central bankers, which is set to get worse - not better, people will look for an alternative currency,' Roche told CNBC's 'Squawk Box' on Thursday. 'Gold is a good alternative currency because it's safe, and because it costs nothing to own it compared to paying negative rates on deposits,' Roche said. As a result, gold prices will likely touch $1,600 before the end of this year, before moving higher to $2,000 next year, he said. Roche said central banks are now 'quite rightly worried' about the next downturn...'That's why I buy gold.'"
Impeachment may lead to another October stock market crash -Crudele/New York Post
"I'm going to tell you what is likely to happen that will make this October potentially the most dangerous of them all. Another October stock market crash as in 1907, 1929, 1987 or the near-crash in 1989? I can't predict that. But I can predict that what's about to happen in Washington will keep investors awake at night....I predicted months ago that the Democrats would have to ramp up their attacks on President Trump as we got closer to the time when a report would be released by Justice Department Inspector General (IG) Michael Horowitz. That report, years in the making, will probably contain a lot of devastating details about dirty tricks that the Democrats and their sympathizers in the FBI and the CIA pulled on then-candidate Trump....It's likely that people will be criminally charged shortly by a grand jury that is said to now be impaneled in Connecticut. All of these developments could happen very soon. And I sense that the Democrats know this....The impeachment effort that's going on right now is a diversion - an attempt by the Democrats to get in front of the very bad things that are about to be released by Attorney General William Barr that are based on the findings of Horowitz....So how does this all affect the financial markets? The chaos is already bothering Wall Street...Trump has already said impeachment would cause the stock market to collapse. Wishful thinking, maybe, so he can blame the Democrats. But there are other economy problems all this political chaos could cause....All of this could push the US into a recession in 2020....Buckle up."
1,015,736,491,184 reasons to have a Plan B -Black/Sovereign Man
"Precisely one year ago, the US federal government opened Fiscal Year 2019 with a total debt level of $21.6 trillion...Today is the start of the government's 2020 Fiscal Year. And the total debt is now $22,622,684,674,364.43. That means they accumulated more than $1 TRILLION in new debt over the course of the 2019 Fiscal Year....FY2019 was, literally, the BEST year EVER measured by short-term US financial performance. The stock market reached an all-time high. Real estate prices reached an all-time high. Corporate profits are at record highs. Personal income is at a record high. Unemployment is hovering near an all-time low. And all of these factors drove US government tax revenue to an all-time high; Uncle Sam has never had more income in its entire history. Yet despite this bonanza of good news, the national debt STILL increased by more than a trillion dollars!....How much longer will everyone keep pretending that the world’s biggest debtor is simultaneously the world's biggest superpower?...5 years? 10 years? 13 months until the next election? No one knows for sure. But you don't need a PhD in economics to realize that this might not have a happy ending... or that you might want to think about a Plan B."
Federal government has dramatically expanded exposure to risky mortgages -Washington Post
"The federal government has dramatically expanded its exposure to risky mortgages, as federal officials over the past four years took steps that cleared the way for companies to issue loans that many borrowers might not be able to repay. Now, Fannie Mae, Freddie Mac and the Federal Housing Administration guarantee almost $7 trillion in mortgage-related debt, 33 percent more than before the housing crisis...In 2019, there is more government-backed housing debt than at any other point in U.S. history, according to data from the Urban Institute. Taxpayers are shouldering much of the risk, while a growing number of homeowners face debt payments that amount to nearly half of their monthly income, a threshold many experts consider too steep. Roughly 30 percent of the loans Fannie Mae guaranteed last year exceeded this level, up from 14 percent in 2016....The binge in high-risk lending has some executives and regulators on edge and could grow problematic if the economy continues to weaken or enters a recession, as more economists are predicting could happen within a year....'It's an explosion waiting to happen,' said Robert Pozen, the former president of Fidelity Investments and a senior lecturer at the Massachusetts Institute of Technology. 'People don't seem to be worried about it, but they weren't worried about it the last time until it all blew up.'"
10.2.19 - UBS Doubles Down On Gold - Ups Forecast Again!
Gold last traded at $1,507 an ounce. Silver at $17.66 an ounce.
NEWS SUMMARY: Precious metal prices rushed higher on safe-haven buying amid rising global economic fears. U.S. stocks fell sharply - adding to Wall Street’s poor start to the final quarter of 2019 - as investors grapple with fears of an economic recession.
Grim choice for investors: Accept very low bond yields or face a 50% crash in stocks -Marketwatch
"U.S. stocks have proved Teflon-esque bouncing back from politics, trade and economic worries, but the sellers look ready to stick around after Tuesday’s shocking U.S. manufacturing data and subsequent market fallout. Stock futures and global equities are deep in the red for Wednesday....As stocks fell Tuesday, investors seeking a haven from economic concerns flocked to bonds, which drove yields down and prices higher. Our call of the day, from the president of Bianco Research, James Bianco says investors shouldn't wish for higher yields - a potential disaster for stocks....Bianco is convinced rates could go even lower...as central banks push interest rates further into negative territory and the global economy slows. But he thinks lots of investors haven't come to grips with that notion. 'A lot of people still think that safe, risk-free investment should still yield them 4% or 5%. But your reward for getting a 4% or 5% yield again is going to probably be a 30% or 50% decline in the stock market.'"
The Dow-to-Gold Ratio Says to Keep Holding Gold -Dyson/Bonner And Partners
"Look at this chart which shows the great wave of stock market valuations, oscillating between cheap and expensive every generation or so....Look how accurately the Dow-to-Gold index chart syncs up with the great valuation wave above. When valuations are in a bear market, as they have been since the year 2000, you hold gold until the great wave bottoms out. Then, when valuations are in a bull market, you hold stocks until the wave peaks....The last valuation extreme (a high) occurred in 1999. The Dow-to-Gold ratio hit 41. That was the time to rotate from stocks to gold. The next extreme (a low) will occur soon – probably in the next five or 10 years. And that will be a time to rotate from gold to stocks. We'll know it's time to rotate when valuations match the previous wave bottoms of 1933, 1950, and 1980. And when the Dow-to-Gold ratio has gone below 5....As we go to publication, it's just below 18. This could be the last time we see the Dow-to-Gold ratio near 18 for many years to come… and your last chance to get on the train before it leaves the station for good."
UBS Doubles Down On Gold - Ups Its Forecast Again! -Constable/Forbes
"The usually-conservative Swiss bank UBS has upped its forecast for the price of gold for the second time in less than two months. Now it says the price for the yellow metal could reach as high as $1,730 a troy ounce next year, up $50 from an August forecast, a recent UBS report states. The note last month pointed to the possibility of $1,680 over the same timeframe. If gold did soar that far it would be 17% above the recent price. The UBS report explains: 'An environment of negative and lower-for-longer real rates, slowing growth with downside risks, and elevated uncertainty strengthens the case for holding strategic gold allocations.'....The other bullish blessing is that most of the investor love for the metal has not come from individual investors. Individuals are well-known for buying and selling assets of any kind at precisely the wrong time. That means that their relative absence from gold investing is a good thing for investors who want to see the price of bullion rally. 'Participation so far has largely been limited to institutional investors and the official sector,' the report says."
Democrats' Plans to Tax Wealth Would Reshape U.S. Economy -New York Times
"Proposals from Elizabeth Warren and Bernie Sanders have raised concerns from economists and business leaders who fear the plans would sap economic growth. Progressive Democrats are advocating the most drastic shift in tax policy in over a century as they look to redistribute wealth and chip away at the economic power of the superrich with new taxes that could fundamentally reshape the United States economy. As they compete for the Democratic presidential nomination, Senators Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont have proposed wealth taxes that would shrink the fortunes of the richest Americans. Their plans envision an enormous transfer of money from the wealthy to ordinary people, with revenue from the wealth tax used to finance new social programs like tuition-free college, universal child care and 'Medicare for all.' The wealth taxes under discussion would deal a major blow to the balance sheets of American plutocrats like Jeff Bezos, Bill Gates and Warren Buffett....While Ms. Warren ticks off the social programs that can be funded if the richest Americans pay just 2 cents on every dollar they have above $50 million - a number that is unimaginable to most Americans - skeptics warn of economic stagnation, depressed business confidence and a legal battle that would go to the Supreme Court....Left-leaning economists have expressed their own doubts about a wealth tax."
10.1.19 - Buffett's Deception On Gold -Forbes
Gold last traded at $1,488 an ounce. Silver at $17.27 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply on safe-haven buying and a weaker dollar. U.S. stocks fell sharply as U.S. manufacturing hit a 10-year low amid rising geopolitical uncertainty.
Don't expect calm markets in October, historically a month for wild swings -CNBC
"October has historically been the most volatile month as the Volatility Index, or the VIX, tends to peak in the month, jumping to more than 21 points on average over the past 30 years, according to Macro Risk Advisors....'We've been spoiled by the lack of volatility, and it increases the chances of a little more explosive October,' Ryan Detrick, senior market strategist for LPL Financial, told CNBC. 'One thing we know is the markets don't stay calm forever and we've seen that multiple times this year' There isn't a lack of catalysts to drive the market crazy, including upcoming trade talks, third-quarter earnings reports and President Donald Trump’s impeachment saga....Tensions escalated ahead of the highly-anticipated trade talks, which resume on Oct. 10 in Washington. Reports on Friday said Trump administration officials are considering ways to limit U.S. investors' portfolio flows into China, including delisting Chinese companies from American stock exchanges....October is also the month when big crashes have occurred, including 1929 and 1987."
Buffett's Deception On Gold -Dohman/Forbes
"Warren Buffett is not a fan of gold....Let's see what gold has done since 2001 when I gave a renewed long-term 'buy' signal...Gold plunged to about $250 by year 2001. At that time, no one even wanted to hear the word 'gold.' Bearish sentiment was at extreme highs. As you can see in this chart, gold far outperformed the S&P 500 since 2001. Buffett uses arbitrary dates, similar to many stock analysts who want to make a point against gold. They pick the dates that give them the results they want....Some speculators like more excitement in their trades, such as cryptocurrencies, which go up or down 20%-30% in 24 hours. In exchange for your money you get a computer entry, nothing tangible. Eventually, these cryptos will be regulated out of existence. The central banks can'’t tolerate private entities overtaking its role of creating money out of thin air. I prefer something the central banks of the world buy many tons of: gold....Gold will become the most desirable asset when the central banks restart their QE (quantitative easing) programs in order to avoid devastating recessions. The purchasing power of money will be eroded significantly....The role of corrections in gold are to 'shake the tree,' i.e. to separate weak holders from their holdings....I always look for investments that have something of value. It let's me sleep at night."
Investors Scramble for Yield as Growth Outlook Darkens -Wall Street Journal
"The world is again running low on yield. Around $15 trillion in government debt globally now has negative yields, meaning investors are paying for the privilege of parking their money with a sovereign issuer. The yield on the benchmark 10-year U.S. Treasury note fell near all-time lows in early September before recovering slightly to end Friday at 1.678%....The environment has changed so much that many began to seriously debate if U.S. yields could hit zero, or even turn negative. Now, investors are once again being forced to look farther afield for income and returns. At the same time, big gains in the stock market - the S&P 500 is up a little over 18% year-to-date as of Friday - have whetted investors' appetite for the type of returns that, in most cases, are beyond the scope of most yield-bearing assets....Preferred stocks and real-estate investment trusts are among the other assets that investors have piled into as global yields declined. Even gold, which yields nothing, has become a more attractive choice when compared with negative-yielding European or Japanese bonds. The precious metal, a popular haven during times of economic or political uncertainty, hit a six-year high in September."
Truth Bombs from Milton Friedman -FEE.org
"American economist Milton Friedman rose to prominence in the second half of the 20th century as one of the leading critics of the prevailing economic theories of John Maynard Keynes, whose mixed economy model became the standard for many developed nations during and after the World War II-era...He received an MA in economics and would ultimately retire in 1977 after more than 30 years of teaching - a year after receiving the Nobel Prize for his contributions to economic science. The Economist has described Friedman as 'a giant among economists' and 'the most influential economist of the second half of the 20th century.' Here are things he said to serve as food for thought: 'Underlying most arguments against the free market is a lack of belief in freedom itself.'...'One of the great mistakes is to judge policies and programs by their intentions rather than their results.'...'The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.'...'Governments never learn; only people learn.'...'The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.'"
9.30.19 - Climate Doom: 'Stop Scaring the Children'
Gold last traded at $1,472 an ounce. Silver at $16.99 an ounce.
NEWS SUMMARY: Precious metal prices dipped Monday on short-term profit-taking and a firmer dollar. U.S. stocks traded higher as investors kept an eye on the latest trade developments between the U.S. and China.
Gold dips as U.S.-China trade woes support dollar -Reuters
"Gold prices fell on Monday as uncertainties around the U.S.-China trade war drove some investors to the safety of the dollar, pressuring assets priced in the U.S. currency. Autocatalyst metal palladium however rallied to another record high, with expectations for a deficit this year helping it to breach the $1,700 an ounce level for the first time....The dollar index held near its highest in a week. 'In the short term, investors are sliding towards a dollar-denominated safe-haven appeal,' said AxiTrader market strategist Stephen Innes. European and Asian stock markets, including China's, were little changed on Monday, shrugging off news that the U.S. administration is considering delisting Chinese companies from U.S. stock exchanges....'Gold remains on the uptrend for the long term but in the short term, there is some confusion considering the contradicting headlines we are getting on the trade war,' Innes added."
It pays to prepare now for the end of the bull market -Marketwatch
"You might start reducing your exposure to stocks now, even if you think the bull market has room to run. That's because stock returns in the last months of a bull market tend to be mediocre at best. So don't try to hang on for that last penny of profit. I reached these conclusions after analyzing the bull market returns of the several hundred investment newsletter model portfolios tracked by my Hulbert Financial Digest. I focused on bull markets since 1990 in the calendar maintained by Ned Davis Research...On average, the newsletters' return in the last 12 months of those bull markets was less than half their annualized bull market gains up until then. And their average annualized return in the last three months of those bull markets was even lower still....Bull markets gradually fizzle out rather than end in a bang...That's why the benefits of hanging on to a bull market's bitter end are low, relative to the risks. We gain relatively little even if we're right, and can lose big if we fail to get out at the very top....Planning for a bear market is a matter of probabilities rather than an all-or-nothing proposition. While conceding that it's difficult to predict recessions, we can also acknowledge that recession risks are higher at some times than at others. Now would certainly appear to be one such time."
'Retail Apocalypse' Continues: Forever 21 Files For Bankruptcy -Zero Hedge
"Forever 21 filed for Chapter 11 protection in Delaware Sunday night, becoming the latest brick-and-mortar retailer to succumb to the Amazon-driven 'retail apocalypse', Bloomberg reports. In addition to the competition from e-commerce retailers, BBG said Forever 21 struggled with high rents and heavy competition from other fast-fashion rivals (like H&M and Zara)...Thanks to Chapter 11 protection, Forever 21 will continue operating as it works out a plan to pay back all of its creditors....Nearly half of the chain's 30,000 employees could lose their jobs. Even before the Forever 21 bankruptcy, the 11,000 announced and completed store closures in the US were already on track to exceed to the totals from the past few years....Goldman Sachs believes the shift to e-commerce will continue: 'We believe e-commerce growth will likely accelerate over the course of the second half as a record number of retail store closures, initiatives around fulfillment such as Amazon's $800 million investment in same-day delivery and Etsy’s move to free shipping...will drive more consumers to shift purchases online.'....Since the start of 2017, more than 20 US retailers - including former giants like Sears and Toys 'R' Us, as well as discount brands like Payless Shoes - have filed for bankruptcy, as the sector has struggled with massive debt loads and a migrating consumer base."
'Stop scaring the children' -Washington Times
"A friend of mine's third-grade daughter came home from school a few weeks ago with tears streaming down her cheeks. 'My teacher say we only have 10 years before the oceans rise, and we are under water,' she moaned. 'Are we all going to die?' That's a heavy burden to place on the shoulders of a 9-year-old. Gloomy stories of the coming apocolypse have become commonplace in schools, textbooks, churches, movies and even children's bedtime stories. The Wicked Witch of the West and Darth Vader have been replaced by the oil companies and auto company CEOs. This over-the-top campaign of doom is clearly affecting the psyche of the young. We saw an example just last week, when Greta Thunberg, the 16-year-old Swedish girl, gained international publicity by passionately telling a United Nations panel that 'we are at the beginning of a mass extinction with entire ecosystems collapsing' and 'we have only eight-and-a-half years left.'....Then there is Rep. Alexandria Ocasio-Cortez of New York, the 29-year-old voice of the millennials in Congress whose message is that the baby boomers have ruined the planet for her generation. She says we have 10 years left to head off planetary destruction....To fill the young with false fears of 'mass extinction' and so on is to ignore the true state of the planet. It isn't dying. The young should be celebrating what every objective measure shows; they are living at the greatest moment in the history of the globe. For those under the age of 30, listen up: You will live longer, healthier lives with more material wealth than any previous generation. You will inherit a world with less poverty, less disease, more leisure time, less pollution, and more material wealth, less discrimination, and more opportunity to achieve your dreams and aspirations than any other generation - except for that of your children's and grandchildren's....What the young lack today is perspective....America's millennials will inherit from my generation some $100 trillion of wealth - a bigger treasure chest of knowledge and resources than all of the other generations that have gone before, combined. How about some gratitude?"
9.27.19 - Free Markets Driven by Empathy, Not Greed
Gold last traded at $1,506 an ounce. Silver at $17.65 an ounce.
NEWS SUMMARY: Precious metal prices eased back Friday as investors digested economic data. U.S. stocks fell after reports that the White House is considering limits on U.S. investment into China.
U.S. Consumer Spending Slowed Sharply in August -Wall Street Journal
"U.S. consumer spending slowed more than expected in August, signaling a key pillar of the economy could be losing momentum as the global economy wobbles and trade tensions remain high. Personal-consumption expenditures, or household spending, nudged up a seasonally adjusted 0.1% in August from July, the Commerce Department said Friday. The modest growth marked a sharp pullback from July, when spending rose 0.5%, and was the weakest performance since February. Consumer spending is the driving force behind the U.S. economy, accounting for more than two-thirds of total economic output. With other sectors of the economy, such as manufacturing and business investment, buffeted by external headwinds, the slowdown in spending doesn’t bode well for third-quarter economic growth....American consumers have generally been a bright spot for the economy in recent months, but signs are emerging of a weakening outlook. Retail sales excluding motor vehicles were flat in August, and consumer confidence has fallen recently."
Shocking New Survey Finds Most Americans Are Completely Unprepared For The Next Recession -Zero Hedge
"Just like in 2008, most Americans are living right on the edge financially, and so any sort of an economic downturn is going to be extremely painful for tens of millions of American families. When you have not built up a financial cushion, any sort of a setback can be absolutely disastrous. During the last recession, millions of Americans suddenly lost their jobs, and because most of them were living paycheck to paycheck a lot of them suddenly couldn't pay their mortgages. In the end, millions of Americans lost their homes during the 'subprime mortgage meltdown', and today the housing bubble is even larger than it was back then. Sadly, the reality of the matter is that many of us are just barely scraping by from month to month, and that is a very dangerous position to be in. A new survey that was just released shows just how vulnerable American consumers have become at this point in time. According to the survey, the top financial priority for 38 percent of all Americans is just trying to pay the bills, and for 19 percent of all Americans it is dealing with credit card debt....If you are struggling to pay the bills each month or you are drowning in credit card debt, the truth is that you are definitely not ready for the next recession....We have a small group of people at the top of the pyramid doing really, really well, but meanwhile most of the rest of us are deeply struggling."
Why Dow Jones Isn't Sweating Trump Impeachment - Yet -Investors Business Daily
"The sudden race to impeach President Donald Trump has yet to have much of an impact on the Dow Jones or broader stock market. But it's premature to conclude that won't change as the public learns details of Trump's effort to get Ukraine to investigate potential 2020 election rival Joe Biden. If the president's approval rating takes a beating from Trump impeachment developments while odds soar that Elizabeth Warren wins the Democratic nomination, political risk will grow and stocks could suffer. At the moment, Trump's job approval rating is close to a two-and-a-half year high. RealClearPolitics puts the Trump approval rating at 44.9%, while FiveThirtyEight, which adjusts polls based on methodology and reliability, has it at 42.9%. If either of those numbers falls to 40% or below, that is likely to begin to shake investor confidence in Trump's reelection prospects. Wall Street has a love-hate relationship with Trump. Investors hate his China tariffs. Yet the China trade war may not come to a neat end if Trump loses in 2020. Investors tend to like the positive earnings impact from his big spending and anti-regulation policies. And they love his tax cuts - particularly his corporate tax cut, which shrunk the effective tax rate for S&P 500 companies by one-third....Suddenly, betting markets see Elizabeth Warren as a huge favorite to win the Democratic nomination. Odds of a Biden victory are crumbling, at least according to political betting markets."
The Driving Force of Free Markets Is Empathy, Not Greed -FEE.org
"Both capitalists and anti-capitalists frequently accuse capitalism of being a system driven by selfishness and greed. But are greed and unbridled selfishness really the driving forces of capitalism? Human self-interest is one - not the only - driving force of all human action. But this has nothing to do with a particular economic system. In capitalism, however, this self-interest is curbed by the fact that only the entrepreneur who prioritizes other people's needs can be successful. There is overwhelming evidence to suggest that empathy, rather than greed, is the true driving force of capitalism. Empathy is the ability to recognize and understand another person's feelings and motives, and this is the most important characteristic of successful entrepreneurs....Like all successful entrepreneurs, it was consumers who made Steve Jobs and Mark Zuckerberg so rich...This was the same recipe for success followed by Sam Walton, the founder of Walmart, who was consistently one of the richest people in the United States....In socialist systems, on the other hand, consumers are powerless and at the mercy of state-owned companies. If a state enterprise acts with no regard for the needs of consumers, they have no alternative under socialism because there is no competition. Under capitalism, consumers can (and do) punish companies that behave selfishly and lose sight of the needs of their customers. Every day, customers vote on the company with their wallets - by buying its products or not....Empathy, the ability to recognize the desires and needs of others, is the true basis of capitalism - not unbridled greed and selfishness."
9.26.19 - Pelosi's Bad Impeachment Call -NYT
Gold last traded at $1,515 an ounce. Silver at $17.91 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying amid rising political uncertainty. U.S. stocks fell amid trade war fears as traders assessed a whistleblower complaint against President Donald Trump.
Gold Gets Another Boost as U.S. Risks Strengthen Case for Havens -Bloomberg
"Gold steadied after posting its longest rally in three months as investors weighed growing political tensions in the U.S., which reinforced demand for havens. Bullion, which has already benefited from central bank easing, slowing growth and the trade war, gained an additional support after an announcement that the U.S. House of Representatives is opening a formal impeachment inquiry of President Donald Trump. Gold is heading for a fifth monthly advance as the Federal Reserve and central banks globally cut interest rates to prop up economies hurt by the prolonged trade war. Weakening U.S. consumer confidence also dented sentiment. The possibility Trump will face impeachment is adding to the raft of concerns weighing on markets. 'The move in gold looks convincing enough to warrant some attention as it's unlikely the political storm clouds over Washington are about to dissipate any time soon,' Stephen Innes, Asia-Pacific market strategist at AxiTrader, said in a note. This 'might continue to weigh on equity market sentiment, possibly send U.S. yields lower and could undermine confidence in the U.S. dollar.'"
Pelosi's Bad Impeachment Call -New York Times
"Once upon a time, prominent Democrats called for the impeachment of a powerful conservative officeholder, only to be embarrassed into silence when it turned out that the basis for their calls was arguable and incomplete, handing their Republican opponents a P.R. coup. That conservative was Brett Kavanaugh, and the time was two weeks ago. How well did that work out for liberals? Now prominent Democrats have begun an impeachment process against Donald Trump, based on information that, while potentially devastating, remains arguable and even more incomplete. They do so because they appear to be certain that the full set of facts will vindicate their belief that the president is manifestly guilty of treason, bribery or other high crimes and misdemeanors. But what if the facts don’t vindicate that belief?....Maybe the whistle-blower complaint will be every bit as damningly dispositive about Trump's conduct as his detractors expect. But right now we have no way of knowing. As for the phone call, the document released on Wednesday shows that Trump asked his Ukrainian counterpart to help 'find out about' Joe Biden's alleged role in stopping a 'prosecution' of a company on whose board Hunter Biden served....The upshot is that Democrats have fired a salvo - their largest and potentially their last - in the near-dark, in an uncertain hope that it will find its target....Disgraceful behavior is not the same thing as criminal behavior. Democrats may now find themselves in the curious position of trying to convince the country that Trump should be booted from the office to which he was lawfully elected for behavior that, whatever else might be said about it, was not unlawful. That will be a tough sell."
Washington plunges into Trump impeachment investigation -Associated Press
"President Donald Trump pressed the leader of Ukraine to 'look into' Joe Biden, Trump's potential 2020 reelection rival, as well as the president's lingering grievances from the 2016 election, according to a rough transcript of a summer phone call that is now at the center of Democrats' impeachment probe....Trump spent Wednesday meeting with world leaders at the United Nations, a remarkable TV split screen even for the turbulence of the Trump era. Included on his schedule: a meeting with Zelenskiy. In a light-hearted appearance before reporters, Zelenskiy said he didn't want to get involved in American elections, but added, 'Nobody pushed me.' Trump chimed in, 'In other words, no pressure.' The next steps in the impeachment inquiry were quickly developing a day after House Speaker Nancy Pelosi launched the probe. A rush of lawmakers, notably moderate Democrats from districts where Trump remains popular, set aside political concerns and urged action....The burden will probably now shift to Democrats to make the case to a scandal-weary public. In a highly polarized Congress, an impeachment inquiry could simply showcase how clearly two sides can disagree when shown the same evidence rather than approach consensus."
Four Collision Courses for the Global Economy -Roubini/Project Syndicate
"Between US President Donald Trump's zero-sum disputes with China and Iran, UK Prime Minister Boris Johnson's brinkmanship with Parliament and the European Union, and Argentina's likely return to Peronist populism, the fate of the global economy is balancing on a knife edge. Any of these scenarios could lead to a crisis with rapid spillover effects. There are now several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis. The first and most important contest is between the United States and China over trade and technology. The second is the brewing dispute between the US and Iran. In the first case, a full-scale trade, currency, tech, and cold war between the US and China would push the current downturn in manufacturing, trade, and capital spending into services and private consumption, tipping the US and global economies into a severe recession. Similarly, a military conflict between the US and Iran would drive oil prices above $100 per barrel, triggering stagflation (a recession with rising inflation). That, after all, is what happened in 1973 during the Yom Kippur War, in 1979 following the Iranian Revolution, and in 1990 after Iraq’s invasion of Kuwait....US President Donald Trump wants a deal with China, in order to stabilize the economy and markets before his re-election bid in 2020; Chinese President Xi Jinping also wants a deal to halt China's slowdown. But neither wants to be the 'chicken,' because that would undermine their domestic political standing and empower the other side. Still, without a deal by year's end, a collision will become likely. As the clock ticks down, a bad outcome becomes more likely....There are big egos in the mix, some of whom might prefer to crash than be perceived as a chicken. The future of the global economy thus hinges on four games of daring that could go either way."
9.25.19 - Insider Stock Selling Hits 20-Year High
Gold last traded at $1,512 an ounce. Silver at $18.07 an ounce.
NEWS SUMMARY: Precious metal prices pulled back Wednesday on profit-taking and a firmer dollar. U.S. stocks rose after President Donald Trump said a U.S.-China trade deal could arrive sooner than expected.
Gold remains supported on Trump impeachment bid -CNBC
"Gold prices inched lower on Wednesday as some investors booked profit, but the metal remained supported below a three-week peak hit in the prior session as the launch of a formal impeachment inquiry into President Donald Trump stoked political worries. Democrats in the U.S. House of Representatives on Tuesday launched a formal impeachment inquiry into Trump, accusing him of seeking foreign help to smear Democratic rival Joe Biden ahead of next year's election....'Compounding into the macro weakness we have the tumult in political landscape brought about by the impeachment process,' said AxiTrader market strategist Stephen Innes. 'The risk could lead to lower equity market and undermine the U.S. dollar and that could be good for gold.' Also, supporting the yellow metal was weak U.S. consumer confidence data that ratcheted up concerns over the global economy. 'It stoked Fed rate-cut speculation, driving down yields and thereby boosting the relative appeal of non-interest-bearing assets epitomised by gold,' said Ilya Spivak, a senior currency strategist at DailyFx."
The World's Wealthiest Families Are Stockpiling Cash as Recession Fears Grow -Yahoo Finance
"Rick Stone, a former partner at Cadwalader, Wickersham & Taft, sees treacherous times ahead for family offices trying to deploy cash. The head of Stone Family Office said he doubts the bond market will provide any real return over the next decade, that equity markets will suffer a substantial drop and then be flat, and that too much venture capital and private equity money will continue to chase too few opportunities....A majority expect the global economy to enter a recession by 2020, with the highest percentage of gloomy respondents in emerging markets....'There's more caution and fear of the public equity markets among ultra-high-net-worth investors,' said Timothy O'Hara, president of Rockefeller Global Family Office. 'That has more people thinking about private investments, alternative investments or cash.' Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said this month he thinks there's a 75% chance of a U.S recession before the November 2020 presidential election, while the World Bank cut its 2019 global forecast to the slowest since the financial crisis a decade ago."
Insider Selling Hits 20 Year High As Stock Buybacks Soar -Zero Hedge
"When it comes to the 'fair value' of stocks, nobody knows it better than insiders, who tend to aggressively offload shares any time they see the price of their equity holdings as generously high. This, however, may be a problem for the broader market because according to research from Smart Insider, the market is now the most overbought since the first dotcom bubble, as 'executives across the US are shedding stock in their own companies at the fastest pace in two decades, amid concerns that the long bull market in equities is reaching its final stages.' As the FT reports, corporate insiders - typically CEOs, CFOs, and board members, but also venture capital and other early state investors - sold a combined $19BN of stock in their companies through to mid-September. Annualized, this puts them on track to hit $26BN for the year, which would mark the most active year since 2000, when executives sold $37bn of stock amid the giddy highs of the dotcom bubble. That 2019 total would also set a post-crisis high, eclipsing the $25bn of stock sold in 2017....The reason investors care about insider stock sales is that it has traditionally been a handy marker for the confidence of executives in their own companies' prospects, and the broader valuation of the market. Spikes in selling indicate that top figures in boardrooms around the country are taking advantage of high valuations in the US stock market....But if the insiders are selling who is buying? The answer will come as a surprise to exactly no one. As Bank of America explains, 'despite what is usually a seasonally weak time for buybacks, corporate buybacks remained strong last week, driven by Tech for the fourth week in a row.'"
The Deep State Runs the American Empire -Bonner/Bonner And Partners
"The concept of the 'Deep State' was first applied to countries such as Turkey and Egypt. These were places where military-police-security insiders put screws to your thumbs, forcing you to do as you were told. Elections changed ruling parties and their leaders. But the real power was elsewhere. America first took the road to empire around the same time that its GDP became the world's largest – in the 1890s. Empires follow paths of their own – dictated neither by voters nor by elected leaders. People don't necessarily want to have an empire. They don't necessarily believe you when you tell them they have one, either. Most Americans – even today – believe they live in a republic governed by the Constitution. Empires love wars. But America's foreign wars – like so much else in our current monetary-government system – are fake. There is no real danger from the enemy. None of America's enemies from the past half century were capable of invading the U.S., stealing our money, ravaging our women, or defeating our armies. These fake wars were simply a way of transferring money – from the people who earn it to the foxes in the war-fighting sector, including the Pentagon. Like financial bubbles and love affairs, empires are unstable. Typically, an empire expands until it is either defeated or bankrupted – often both. As more and more of the economy is put on a war footing, less and less is available to produce real wealth. Growth slows. Debts increase. Eventually, the debts implode… and the empire is out of business. Alternatively, or often in parallel, as the empire reaches farther and farther from its homeland, it creates more and more enemies. Eventually, it is 'overstretched' and is ready for a comeuppance – usually delivered as a mortal blow by the empire next in line."
9.24.19 - Recession in Less Than 12 Months
Gold last traded at $1,531 an ounce. Silver at $18.71 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying and a weaker dollar. U.S. stocks fell as a drop in Netflix shares and consumer confidence offset U.S.-China trade talk optimism.
U.S. consumer confidence plunges in September -Reuters
"U.S. consumer confidence fell by the most in nine months in September, far more than expected, as Americans’ economic outlooks darkened in the face of the U.S.-China trade war, according to a private sector report released on Tuesday....September's reading marked the largest shortfall relative to Wall Street's expectations since 2010. 'The escalation in trade and tariff tensions in late August appears to have rattled consumers,' Lynn Franco, Senior Director of Economic Indicators at The Conference Board, said in a statement. The expectations index - based on consumers' short-term outlook for income, business and labor market conditions - declined to 95.8 in September from 106.4 last month."
Capitalism Is the Key to Fixing Climate Change -Reason
"Slowing or stopping economic growth will only delay solving the problems caused by man-made warming. Climate Strike protests are supposed to bring attention to the science showing that human-made global warming is becoming a problem. Fair enough. But some participants see climate change as pretext for destroying a market system that they have always hated. Naomi Klein made this point crystal clear in her 2014 book, This Changes Everything: Capitalism vs. the Climate...The science, insists Klein, 'says our future is radical. The present is pretty radical too. The idea that there is some sort of gradual, incremental, let's-split-the-difference pathway to respond to this crisis is silly at this point.' A headline in The Guardian put it even more forthrightly: 'Ending climate change requires ending capitalism.'....Economic growth initially hurts the environment, but after a point it makes things cleaner. By then, slowing or stopping economic growth will delay environmental improvement, including efforts to mitigate the problem of man-made global warming. The MIT economist Andrew McAfee explains the process in a forthcoming book, More from Less...'America, in short, is post-peak in its exploitation of the earth. The situation is similar in many other rich countries, and even developing countries such as China are now taking better care of the planet in important ways.' How did this happen? Through more capitalism, not less...'The strangest aspect of the story is that we didn't make any radical course changes to eliminate the trade-off between human prosperity and planetary health...We got better at combining technological progress with capitalism to satisfy human wants and needs.'....The upshot is that Klein, The Guardian, and many of the climate strikers have it exactly backwards. Properly incentivized capitalism is the key to solving the problems caused by climate change."
A recession is less than 12 months away -Rosenberg/CNBC
"The Gluskin Sheff chief economist and strategist predicts economic growth in the U.S. will turn negative sooner than most investors anticipate - setting the stage for a painful market pullback. 'There's a recession coming in the next 12 months,' he said last Thursday on CNBC's 'Futures Now.'....Fed Chairman Jerome Powell signaled rates would only be cut again if there's new evidence the economy is softening. However, Powell said he didn't expect that to happen. 'The only reason that he said that he's optimistic on the outlook is because of exactly what the Fed is doing which is breathing stimulus back into the economy,' said Rosenberg....According to Rosenberg, it's just a matter of time until economic data sours and Powell is forced to resume easing in the coming months. 'I think that they'll go in October and December and through 2020,' he added. Whether the Fed cuts all the way to zero or not, Rosenberg speculates the outcome will be the same: Recession."
Don't Rule Out War With Iran -Wall Street Journal
"Jacksonian America is certainly tired of 'endless wars.' The president understands and shares that concern. America's steady move toward energy independence also reduces public concern about the Middle East. But Jacksonian America is neither patient nor pacifist, and there are provocations that would transform opinion overnight....Mr. Trump's restraint so far is a sign of America's wider geopolitical strength. Thanks to American fracking, Iran's troublemaking in the Gulf hasn't affected American motorists at the pump....Another incident on the scale of the Abqaiq attack might be impossible to ignore. Last Friday Defense Secretary Mark Esper announced the deployment of U.S. troops to Saudi Arabia. This is a political as well as a military measure. Like the troops in Berlin during the Cold War, those American forces will serve as a tripwire. If Iran launches an unprovoked attack against Americans who are conducting a necessary and lawful defensive mission, Washington's calculus could change in a heartbeat. The mix of military restraint and sanctions resolve has worked well for Washington so far. Even Iran hawks are happy with the impact the sanctions are having. But the chances of a military confrontation between Iran and the U.S. are rising, not falling. Strategic patience in Washington matched by strategic realism in Tehran is the world's best hope for peace."
9.23.19 - Gold Bull Sees Price Reaching $1,700
Gold last traded at $1,531 an ounce. Silver at $18.71 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying amid rising global risks. U.S. stocks treaded water as weak economic data out of Europe stoked worries over the state of the global economy.
New Gold Bull Sees Price Reaching $1,700 -CCN
"Marc Chandler believes that the price of gold will continue moving higher. He believes that bullion will hit $1,700 this year, which implies a 10% upside from the current price. Chandler is one of the best-known foreign exchange strategists in the world. He is the chief market strategist for Bannockburn Global Forex, which is a capital markets firm that specializes in advisory, analytics and transaction processing for companies. Chandler first unveiled his bullish call on gold in an interview with Bloomberg in June this year...He continues to believe that negative interest rates, geopolitical constraints and technical factors mean that the price of gold could keep moving higher. He said: 'Negative interest rates mean that the opportunity cost of holding a non-yielding asset has fallen.' Just last week, the Federal Reserve slashed interest rates by 25 basis points. This was the second consecutive interest-rate cut in as many meetings. Some analysts believe that the Fed could have another 25 basis point cut this year. Others, like Ron Paul, think that rates could go negative in 2020. The situation is not improving around the world. On September 12, the European Central Bank pushed rates further negative and pledged to do more. In Japan, the BOJ announced that it might cut rates as the economy continues to weaken....On the technicals, Chandler said that: 'My reading of the charts suggests a target of around $1700 when it moved above $1400.'"
The Coming Currency War: Digital Money vs. the Dollar -Wall Street Journal
"The future of money might be a digital version of the cash that'’s already in people's wallets - potentially upending the currency system that the world has known for many decades. Such a future, of course, might be a disappointment to many libertarians and tech-savvy investors who are pinning their hopes (and in some cases their money) on private cryptocurrencies such as bitcoin. Instead, central bankers and governments - the entities that cryptocurrencies' backers hoped to render obsolete - are increasingly warming to the idea of 'digitizing' their own national currencies. That is, they would issue money that would exist only virtually, without a paper or coin equivalent, and be universally accepted as a form of payment. Central banks such as the Federal Reserve in essence already issue digital money, via the commercial banks that have accounts with them...Instead of working only through commercial banks, central banks might issue digital currency directly to the public that could be used as legal tender in the same way cash is today...And the implications could be profound for everything from commerce to interest rates to privacy....In addition, national digital currencies could make it harder for private cryptocurrencies to catch on. Because government e-cash would be operated, backed and controlled directly by central banks, it likely would be viewed as more reliable than privately created cryptocurrencies, which operate on decentralized networks of users and fluctuate wildly in value....If national digital currencies allow for faster, cheaper money transfers across borders, viable alternatives to the U.S. dollar could emerge....Whatever happens, it could be chaotic, the Bank of England's Mr. Carney warned in Jackson Hole...'History teaches that the transition to a new global reserve currency may not proceed smoothly,' he said."
Negative Interest Rates Are The Price We Pay For De-Civilization -Zero Hedge
"Do central bankers really think negative interest rates are rational? Both Europe and Asia are now awash in $17 trillion worth of negative-yielding sovereign and corporate bonds, and Alan Greenspan suggests negative interest rates soon will arrive in the US. Negative interest rates are just the latest front in the post-2008 era of 'extraordinary' monetary policy. They represent a Hail Mary pass from central bankers to stimulate more borrowing and more debt, though there is far more global debt today than in 2007....Under what scenario would anyone lend $1,000 to receive $900 in return at some point in the future? Only when the alternative is to receive $800 back instead, due to the predicted interventions of central banks and governments. Only then would locking in a set rate of capital loss make sense....It should be noted that rational purchasers of negative-yield bonds hope to sell them before maturity, i.e., they hope bond prices rise as interest rates drop even lower. They hope to sell their bonds to a greater fool and generate a capital gain. Negative interest rates are the price we pay for central banks. The destruction of capital, economic and otherwise, is contrary to every human impulse. Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce. No society in human history previously entertained the idea of negative interest rates, so like central bankers we are all in uncharted territory now."
When in Doubt, Print Money -City Journal
"Advocates of Modern Monetary Theory want us to believe that debt doesn't matter and that government can spend endlessly. Eleven years ago, the 2008 financial crisis transformed politics, creating the conditions for a new crop of national-profile candidates who are throwing the old rules away, from Donald J. Trump to Alexandria Ocasio-Cortez. Now, insurgent academics have come forward with a seemingly elegant theory to revolutionize economics, underpinning the profligate spending impulses of many of these newly minted politicians. This framework, 'Modern Monetary Theory' or 'Modern Money Theory,' has a simple premise: the U.S. and other Western countries can offer government-funded, good-paying jobs to anyone who wants one and pursue any other public-policy objective as well, through vastly increased spending. The outlays for such ambitious efforts, the theory holds, won't result in high deficits, high interest rates, or inflation that haunted Western policymaking on both sides of the aisle from the 1970s to the early 2000s. Those risks are exaggerated, MMT maintains, and can be mitigated through prudent government action. Extravagant as they sound, MMT's prescriptions resemble how the U.S. and other Western governments have approached economic and monetary policy in the years leading up to and following the financial crisis. That's hardly a comforting feature of MMT, though. This upside-down theory matches reality only because reality is upside-down....Throw everything in the old textbooks out, MMT partisans say. The guiding principle of MMT is that modern governments face no pressing constraints on spending - including the need to hike taxes to pay for it....If the government doesn't have to tax or borrow to fund its operations, it has only one other option: print the money. For MMT, that's nothing to worry about. Modern governments don't literally need to print money, of course; these days, they can create it on computers....MMT's economic vision is ultimately fanciful. The most obvious criticism is the risk of inflation - or even hyperinflation - that MMT poses. One doesn't have to be a hard-core monetarist to get queasy at the prospect of the U.S. and the European Union 'printing' trillions in dollars or euros forever."
9.20.19 - Geopolitical Tensions Boost Gold Prices
Gold last traded at $1,515 an ounce. Silver at $17.93 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying amid ongoing geopolitical tensions. U.S. stocks fell to session lows after China trade officials cut US visit short.
Gold edges higher as softer dollar, Gulf tensions lend support -Reuters
"Gold prices rose on Friday and were headed for their first weekly gain in a month, supported by a softer dollar, tensions in the Middle East and caution about Sino-U.S. trade talks, while palladium climbed to a fresh record peak. Spot gold was up 0.3% at $1,503.36 per ounce, up about 1% this week. 'A weaker U.S. dollar is giving gold a little bit of an upward drift,' said Michael McCarthy, chief market strategist at CMC Markets...'Investors are all waiting on any further developments in the trade negotiations as they move towards October meeting and that may provide next big driver for gold prices,' McCarthy said....Gold prices have risen about 17% this year mainly on U.S.-China trade tensions, concerns over the global economic growth outlook and prospects of monetary easing by central banks. The Fed cut interest rates for the second time this year on Wednesday to help sustain economic expansion but gave mixed signals on future rate cuts. Also, giving bullion a lift were tensions in the Middle East as the United States said on Thursday it was building a coalition to deter Iranian threats following a weekend attack on Saudi Arabian oil facilities."
Beware Mocking Bubbles & Bears -Global Macro-Monitor
"Once again, seeing lots of articles and talking heads mocking bubbles and the bears, which is usually a sign a big bubble is going to burst. The last time we saw this kind of taunting of the bears was three days before the bear market, which we think is on, began in January 2018. Nobody really knows for certain what is causing the stress in the money markets, but our calculated guess is it is: 1) somehow related to the massive new issuance of Treasuries, which is sucking liquidity out of the markets, as prices are repressed and not allowed to clear –> think, a) rent control, where the excesses have to be cleared through quantities, and b) Le Chatelier's principle, where, in a dynamic equilibrium, pressure on one variable has to be offset by movement in other variables...Whatever the case, the markets are so distorted now and becoming more so, especially by the false belief that central banks can even now fine-tune a Stradivarius violin. Haha! We believe quantitative easing and the massive expansion of central bank balance sheets are the financial equivalent to excessive carbon emissions resulting in kind of a of global warming in the markets. Thus, traders and investors should expect more extreme market conditions....So, folks, when listening to the Street, bubble vision, the market talking heads, and even central bankers and policymakers, take heed the words of the great American author, Upton Sinclair: 'It is difficult to get a man to understand something when his salary depends upon his not understanding it.'"
Democracy Doomed the Money System -Bonner/Bonner And Partners
"The plain people vote. But insiders - the elite, the cronies, the Deep State - make the important decisions. And these few can increase their own wealth and power only by taking it from the many they are meant to serve - the public. And when they are in the 'Inflate-or-Die' trap, rarely are they willing or able to risk easing off from inflation. First, because it threatens their power (the masses want free stuff too). Second, because it slows the transfer of wealth in their direction (it curbs the government spending on which they rely). And third, because it usually means an immediate cut in their personal wealth (as stock prices collapse). That is why there is always a bias towards inflation - the benefits come quickly and mostly go to the people in charge of the system. The bill shows up much later and is paid - in higher prices, depression, and misery - by the public. Team Trump - including the president's nitwit advisor, Peter Navarro - believes it may be able to get the Dow up to 30,000 in time for next year's election. As far as we recall, it is the first reelection strategy in history expressly tied to the Dow. Whether stock prices will rise or not, we don't know. But if they rise, we'd be very surprised if gold didn't go up more. Gold is real money. When fake money gets debased and inflated, gold shines. Since the beginning of this century, central banks have added some $22 trillion in new, fake money - or 15 times the value of all the gold ever mined from the time of The Flood to 2000 A.D. In January 2000, the price of gold stood at $280. It is now $1,500 - a more than five-times increase...You would have made twice as much in capital gains from low-risk gold as from high-risk stocks over the last 20 years."
Desperate Central Bankers Grab for More Power -Ellen Brown Blog
"Conceding that their grip on the economy is slipping, central bankers are proposing a radical economic reset that would shift yet more power from government to themselves. Central bankers are acknowledging that they are out of ammunition. Mark Carney, the soon-to-be-retiring head of the Bank of England, said in a speech at the annual meeting of central bankers in August in Jackson Hole, Wyoming, 'In the longer-term, we need to change the game.' The same point was made by Philipp Hildebrand, former head of the Swiss National Bank, in an August 2019 interview with Bloomberg. 'Really there is little if any ammunition left,' he said. 'More of the same in terms of monetary policy is unlikely to be an appropriate response if we get into a recession or sharp downturn.' 'More of the same' meant further lowering interest rates, the central bankers' stock tool for maintaining their targeted inflation rate in a downturn....So what is a central banker to do? Hildebrand's proposed solution was presented in a paper he wrote with three of his colleagues at BlackRock, the world's largest asset manager, where he is now vice chairman...Their proposal calls for 'more explicit coordination between central banks and governments when economies are in a recession so that monetary and fiscal policy can better work in synergy.' The goal, according to Hildebrand, is to go 'direct with money to consumers and companies in order to enliven consumption,' putting spending money directly into consumers' pockets....Central bankers would be acquiring even more power, by giving themselves a new pot of free money that they could deploy as they saw fit in the service of 'government objectives.'....Better would be to nationalize the Fed, turning it into a true public utility, mandated to serve the interests of the economy and the voting public."
9.19.19 - Market's Eerie Parallels to Sept 2007
Gold last traded at $1,509 an ounce. Silver at $17.91 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks rose as gains in Microsoft, AT&T and other tech companies offset an underwhelming decision by the Fed.
Gold holds near $1,500 after Fed cuts interest rates -CNBC
"Gold edged lower on Wednesday but held near the key $1,500 per ounce level after the U.S. Federal Reserve decided to cut interest rates, a decision that was widely expected. 'The gold market has been pretty sensitive to FOMC and Fed policy this year, so the expectations of a rate cut are supportive for gold,' said James Steel, chief precious metals analyst at HSBC. The Fed approved an interest rate cut of a quarter point, which the market had largely priced in to expectations....Meanwhile, limiting safe-haven inflows into bullion, oil prices pulled back, having jumped nearly 15% earlier this week following attacks on production facilities in Saudi Arabia, after the major producer said it would restore its output by month-end."
Democrats and Republicans Aren't Just Divided. They Live in Different Worlds. -Wall Street Journal
"America's political polarization is almost complete. Its two main political parties increasingly represent two different economies. And they barely overlap. Democrats can be found in educated cities and suburbs where professional jobs are plentiful. Republicans live in working-class and rural communities, home to agriculture and low-skill manufacturing. Let's look at GDP to understand how the two parties are divided. These days, Democratic House districts are doing substantially better: Two-thirds of the nation’s GDP comes from those areas, with Republican districts making up the rest. This is striking, because the Republican share of GDP is shrinking. Even though the party controls more House districts than a decade ago, those districts account for less economic activity, Brookings Institution data show....Democrats represent districts with the biggest clusters of professional jobs. That includes tech hubs around Silicon Valley and Boston. Nearly three quarters of jobs in digital or professional industries are in Democratic districts. Republican districts, by contrast, hold growing shares of the nation's agriculture, mining and low-skill manufacturing jobs, many of which do not require a college degree, have lower pay and are more exposed to overseas competition....The two parties represent different parts of the economy, in large part because they represent different kinds of places." [Image: Courtesy Wall Street Journal]
Stock market's eerie parallels to September 2007 should raise recession fears -Marketwatch
"Since last year real GDP growth in the U.S. has been slowing. The chair of the Federal Reserve has been signaling that while growth is slowing, there is no recession risk and the Fed is forecasting continued positive growth. Warning signs in the economy, including an inverted yield curve, have been ignored and stock markets continued to make new highs in July. In August a correction took a place and subsequently a rally ensued into early September. On September 18 the Fed cut rates. Sound familiar? It fairly describes market and economic conditions in the U.S. over the past couple of months. Except that this paragraph would be as true for the U.S. economy and stock market in September 2007 as it is today. Consider that 12 years ago the yield curve was inverted and U.S. economic growth was markedly slower than it had been in 2006. Yet the Standard & Poor's 500 made a new high in July 2007 (same as 2019), there was an August correction (same as 2019), and then the Fed cut rates on September 18 (ditto - same day even). U.S. stocks proceeded to make another marginal high that October - and that was it. Lights out. We all know what happened next. It seems we are at a curious moment in time. Parallels to late 2007 are running through the markets now. This doesn't mean the market's fate will play out as it did then, but the ingredients are there and all that's needed is a trigger....According to a November 2007 Reuters report, Bernanke told a congressional committee: 'Our assessment is for slower growth, but positive growth, going into next year.' The U.S. economy entered recession in December 2007. Does this not sound eerily similar to what Fed Chairman Jay Powell has been saying? Here's Powell on September 6: 'We're not forecasting or expecting a recession,' he said....What does all of this suggest? For starters, the Fed will not tell you when a recession starts. They can and will be in total denial until after the fact."
Why is the NY Fed pumping billions into the money market? -Yahoo Finance
"For the first time in more than a decade, the US central bank this week stepped into financial markets to keep interest rates on short-term lending from popping above its target range. The New York Federal Reserve Bank conducted money market interventions on Tuesday and Wednesday and planned another for Thursday morning, as a cash crunch drove up the cost of borrowing for banks that need to replenish the reserves they hold at the central bank. Financial institutions use money markets to borrow for very short periods, from one day to a year, a crucial function to keep the gears of the economy running. In so-called repurchase or 'repo' agreements, banks borrow by putting up assets like Treasury notes as collateral and then repay the loans with interest the following day....The reasons behind borrowers' sudden demand for cash were attributed to a host of technical conditions that converged to drain money out of the system...'It looks like a lot of cash left the system in recent days and that demand for dollars was greater than the number of dollars in circulation,' said Gregori Volokhine of Meeshaert Financial Services."
9.18.19 - Dollar Devaluation Will Impoverish Americans
Gold last traded at $1,515 an ounce. Silver at $17.91 an ounce.
NEWS SUMMARY: Precious metal prices traded higher Wednesday ahead of the Fed's rate decision. U.S. stocks lower as the Federal Reserve loses control of its own interest rate on the day of their big decision.
3 Reasons Why There's Further Upside Potential for Gold Prices -Holmes/Forbes
"Gold may be off its 52-week highs, but the precious metal is still up more than 15 percent for the year through September 17. This appears to put gold on a path for its best year since 2010, when it gained just under 30 percent. I believe buying the dips in gold right now could turn out to be a wise investment decision. I see a lot happening at the moment - from an unprecedented $17 trillion in negative-yielding bonds worldwide to heightened geopolitical threats - that might boost investors' appetite for the metal, which has a history of holding its value in times of crisis. Read on for three reasons why I believe there's further upside to gold prices... #1 U.S. inflation is finally starting to heat up...In the past, faster inflation has been constructive for gold prices. That’s because inflation, by its nature, destroys your purchasing power, and to limit these losses, investors have traditionally turned to the yellow metal as well as gold mining stocks. #2 Negative yields in the U.S.? $17 trillion in debt around the world...has recently pushed the price of gold to new all-time highs in a number of currencies, including the British pound, Japanese yen and Canadian and Australian dollars...It could only be a matter of time before U.S. fixed-income yields turn subzero - especially if Trump gets his way. #3 Geopolitical and economic risks raise the demand for a safe haven. There are a number of geopolitical and economic risks right now that have triggered gold's 'fear trade' Economic growth is slowing worldwide as a result of trade tensions....Other geopolitical concerns, including unrest in Hong Kong as well as last Saturday's attack on Saudi Arabia's oil facilities, have helped support gold demand."
The Dollar and Democracy Are Frauds -Bonner/Bonner And Partners
"Today's dollar is fake, with no firm connection to the real world of time, resources, and output. The 'wealth' it produces is fake too. We saw that last week; in the 50 years after WWII, household net worth averaged about 350% of GDP. Then, suddenly it shot up to over 500%. Where did that extra money – about $30 trillion of extra household wealth – come from? Among the many, it's slim pickins. Real median household income was a little over $60,000 in the late '90s; it's still a little over $60,000. But among the few, it's high cotton all year round....During that same period, central banks flushed some $22 trillion in new (fake) money into the world economy. That money bid up prices for stocks and bonds, making asset holders much richer, relatively, than everyone else. In effect, the feds aided and abetted the grandest larceny in history. The essential fraud of the financial system is not only that the money is fake. It is also the overweening conceit that seven jackasses on the Federal Open Market Committee can control, improve, and stimulate a $20 trillion economy… as if it were a cranky lawnmower in need of a tune up. The essential fraud of democracy has two parts to it too. First is that some voters have the right to tell other voters what to do… and second is that they control the government....In the absence of real information or real knowledge, the voter defaults to campaign slogans, lies, and empty promises… and leaves the real decision-making in the hands of the elites in the Swamp. Naturally, these insiders look out for themselves. Their main goal is to keep the power and money headed in their direction, which is why any reform of federal budgets or the fake money system is impossible… and why deficits, debt, and funny-money finance will worsen until they finally blow sky-high."
Dollar Devaluation Will Impoverish Americans, Weaken the Economy -Real Clear Markets
"After years of complaining about countries manipulating their currencies, trade protectionists have finally found a country they would be happy to see drive down the value of its money: the United States. Sens. Tammy Baldwin (D-Wis.) and Josh Hawley (R-Mo.) make amazing promises about legislation they have introduced, the Competitive Dollar for Jobs and Prosperity Act. According to the bipartisan duo, the bill would 'make U.S. exports more competitive, boost American manufacturers and farmers, and reduce our trade deficit.' The measure may be well intentioned, but it is fundamentally misguided because it misunderstands the underlying economics. This congressional version of 'if you can't beat them, join them' would harm the U.S. economy and make us poorer....The economic realities of currency manipulation are counterintuitive. A shift in exchange rates changes a country's 'terms of trade,' an expression used by economists to describe the ratio of a nation's export prices to its import prices...Just as individuals at the grocery store would be better off if they are able to buy more apples for the same amount of money, so the United States is better off when our dollar is strong and we can purchase from other countries at favorable prices....If Congress wanted to do something that genuinely benefits exporters, it would work to end the trade war...Let's get the economics right. Ending the trade war will lead to increased U.S. prosperity. Devaluing the dollar will not."
What Ever Happened to 'We the People'? -Carrington/Wall Street Journal
"Sometimes you know something so well that you stop seeking out what it can teach you. This can happen with anything from a beloved novel to the Bible. In our divisive political times, one well-worn text that bears re-examining is the preamble of the Constitution....Consider its opening and closing: 'We the People . . . do ordain and establish this Constitution for the United States of America.' Every political community has to decide who is ultimately sovereign. Our commitment to popular rule stems from a belief in the inherent equality of all human beings. As equals, the only just rule is self-rule. In so committing, America was one of the first countries to reject the rule of the few elites, building on an English commitment to freedom. But unlike Britain's customary constitution, 'We the People' would record the structures and conditions of our rule, setting them in stone as a standard of liberty. The Founders chose another route, a summary of the just ends of political society. These ends were grounded in human virtue, not greed or vainglory....Liberty bestows myriad blessings, allowing us to fulfill our purposes as human beings, to seek the good, virtue, and the worship of our Creator. We must secure these not only for us, but for our children and children's children. The Founders sought in the Constitution 'to form a more perfect Union.' The rule of the people and their commitment to certain purposes came in the form of a common bond....The preamble's commitments articulated the basis of our union. But every one of them now is contested, even the most fundamental: self-rule...This Constitution Day, (September 17th) let us seek to learn anew from the preamble."
9.17.19 - Gold Steady as Markets Await Fedspeak
Gold last traded at $1,513 an ounce. Silver at $18.14 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe-haven buying ahead of Fed statement. U.S. stocks fell for a second straight day as the Federal Reserve kicked off a two-day monetary policy meeting.
Gold steady as markets await Fed clues on rate outlook -Reuters
"Gold prices were little changed on Tuesday as traders largely remained on the sidelines, awaiting a widely expected cut to interest rates by the U.S. Federal Reserve this week and a steer on its longer-term plans. 'The market is searching for a new catalyst ... The 25 basis point rate cut is relatively priced in already, but what traders are really looking for is forward guidance,' said Phillip Futures analyst Benjamin Lu. A quarter-point cut to U.S. interest rates is widely expected when the Fed issues its next policy statement on Wednesday. It would be the central bank’s second such cut after lowering rates in July for the first time since 2008....The Fed's language and new economic projections will be examined closely, given the backdrop of a bruising U.S.-China trade war, stimulus by the European Central Bank and a stream of weak manufacturing data that hints at larger potential problems for the United States....Attacks on Saudi Arabia's main oil refinery at the weekend have also entered the equation, prompting U.S. President Donald Trump to apply more pressure on the Fed to lower interest rates. 'It appears conviction remains positive so long as gold hangs around $1,500,' AxiTrader strategist Stephen Innes said in a note, adding that the market has been caught between hedging against a possible U.S. military response on Iran and position-squaring ahead of the Fed’s two-day meeting"
How an Oil Price Surge Could Hurt Consumer Spending, and the Economy -New York Times
"For months, American consumers have kept the economy humming. While businesses pulled back, shoppers continued to spend. But a prolonged surge in gasoline prices after the attacks on oil production facilities in Saudi Arabia could undermine that phenomenon and increase the risk of a recession. 'It's clearly not a positive, and it adds a negative to the outlook,' said Steve Blitz, chief United States economist at T.S. Lombard, an independent research firm. 'It's another straw on the camel’s back.' Monday's nearly 15 percent spike in oil prices to $62.90 a barrel isn’t big enough to bring on a recession - it only returns crude prices to where they were this spring. Monday's jump is expected to add roughly 20 cents to gas prices, which now average $2.56 a gallon nationally, said Tom Kloza, global head of energy analysis for the Oil Price Information Service. But a shock in the form of a rapid $20 or $30 a barrel jump in oil prices would have a bigger economic impact. 'At that level, the consumer takes a significant hit,' said Ethan Harris, head of global economics and research at Bank of America Merrill Lynch. A $25 a barrel increase in oil prices, the kind of move analysts cite as a potential threat to the economy, would add 50 cents to the cost of each gallon of gas. That would mean an extra $45 in monthly spending for the typical family....The biggest risk to consumers - and the economy itself - would be a significant military conflict between the United States and Iran. Businesses, already cautious about spending, would pull back further. Consumers would likewise retreat."
The Fed's Mandate Is Up to Congress and the President -Sheldon/Wall Street Journal
"The role of the Federal Reserve as an instrument of public economic power could use some clarification. The central bank's status as an independent agency derives from an act of Congress in 1913, and is reinforced by oft-invoked references to its statutory 'dual mandate': to achieve stable prices and full employment. But the Fed's job description is more complicated than people usually think. Its purposes have evolved through various legislative changes over the decades, the most notable of which was imposed by Congress in 1977. The Federal Reserve Reform Act, which gave the central bank its current, explicit mandate, named three goals rather than two. The legislation as amended states: 'The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.'....It would be appropriate and constructive for the Fed to consider international monetary stability in its interest-rate decisions. In an era of world-wide currency exchange, America’s central bank should not ignore the effects of movements spurred by other major central banks. With no consistent free-trade principles governing global monetary policy, the Fed must take proactive steps to ensure that the U.S. can compete successfully. It would be in keeping with its historical mandate if the Fed were to pursue a more coordinated relationship with both Congress and the president. When it comes to fulfilling the economic goals authorized by legislative decree, it isn’t seemly for a government agency to be selective."
Book Review: 'The Smallest Minority' -Tamny/Real Clear Markets
"The Houston-based Kevin Williamson's very entertaining and insightful book, 'The Smallest Minority: Independent Thinking In the Age of Mob Politics,' is among other things a rejection of 'mob politics,' and 'its effects on our political discourse and our culture.' In the free market, the mob most certainly doesn't rule...Free markets are about individual choice, as opposed to decrees from the Commanding Heights about what we'll purchase, and how. When Burger King rolled out its plant-based Whopper, it tested it in St. Louis first, as opposed to ramming it down the throats of thousands of franchisees. Williamson plainly doesn't trust the mob, and it seems one message the National Review reporter is trying to send is that we should aim to localize our policymaking a la Burger King. If so, bad ideas will be contained while good ones will be widely adapted. The free markets account for our many differences, while politicians increasingly strive to craft national solutions to perceived problems. Williamson would no doubt prefer to leave things to the people....Most important is Williamson's muscular disdain for democracy. 'I come not to praise democracy but to bury it.' As he later explains, the 'Founding Fathers understood the dangers of democracy' without limits on government: it would lead to ochlocracy, another word introduced to me by Williamson which is, you might have guessed, mob rule. And while most would describe Williamson as a conservative, particularly given his views on abortion, he's really a libertarian as the previous paragraph makes rather plain. Williamson believes in individual freedom to do as one wishes short of hurting others, and undiluted democracy has little do with freedom....The crisis narrative is easily my favorite part of Williamson's book...'Every interest group, faction, and policy entrepreneur in the country has a crisis narrative to peddle. The Right blames the rhetoric of the Left every time a cop is ambushed, the Left blames the rhetoric of the Right every time a gay man or Muslim is assaulted or worse.' Conservatives and liberals, and conservative and liberal pundits most of all, have thoroughly stripped any meaning from the word 'crisis.' Thank goodness Williamson is willing to showcase this truth....Williamson's conclusion at book's end is that 'the biggest democracies will always be a dangerous place for the smallest minority,' as in the individual. So true. The answer is freedom."
9.16.19 - Global Markets Slide on Oil Chaos
Gold last traded at $1,511 an ounce. Silver at $18.02 an ounce.
NEWS SUMMARY: Precious metal prices shot upward Monday on safe haven buying and market uncertainty. U.S. stocks fell sharply amid fears that a surge in oil prices, following an attack in Saudi Arabia, could slow down global economic growth.
Gold jumps 1% as attacks on Saudi lift safe-haven bets -Reuters
"Gold prices jumped 1% on Monday as attacks on Saudi Arabia's oil facilities dented risk appetite, boosting demand for the safe-haven bullion, while investors awaited for clues on monetary easing from major central bank meetings due this week....The attacks on Saudi oil installations have lead to a rotation of interests out of stocks and into safe-havens, said OANDA analyst Jeffrey Halley. The risk-averse sentiment in the market underpinned the bullion, often seen as an alternative investment during times of political and financial uncertainty. With escalating tensions in the Middle East and hopes of more stimulus measures from major central banks, the next target for gold will be $1,530, Halley added....Investors also await the outcome of the U.S. Federal Reserve and Bank of Japan's policy meetings on Wednesday, for signals on their future policy path. 'Accommodative monetary policy by global central banks will support bullion's appeal for 2H 2019,' Phillip Futures analyst Benjamin Lu said in a note. Central banks globally are facing increasing pressure to dole out monetary support for flagging economies as the U.S.-China trade dispute hurt trade and business sentiment."
Global Markets Slide, S&P Futures Back Under 3000 On Oil Chaos, China Slowdown -Zero Hedge
"On the 11th anniversary of the Lehman default, global stock markets and US equity futures are broadly lower after this weekend's drone attack on Saudi oil facilities resulted in the biggest oil price surge in history. State energy producer Saudi Aramco lost about 5.7 million barrels a day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-largest oil field in Khurais....Iran-backed Houthi rebels in Yemen claimed credit for the attack, but President Trump has already said that the US is 'locked and loaded depending on verification' that Iran staged the attack, an assertion also made by his secretary of state Mike Pompeo and backed by administration officials....'We have never seen a supply disruption and price response like this in the oil market,' said Saul Kavonic, an energy analyst at Credit Suisse Group AG. 'Political-risk premiums are now back on the oil-market agenda.' The shock collapse in Saudi oil output pushed S&P futures back under 3,000 and yields on 10Y Treasurys down 8bps to 1.81%, while the dollar shortage has returned, sending the Bloomberg Dollar index to session highs. Adding to the downward pressure on risk assets was the latest dismal news from China which saw the country's economic slowdown deepen in August as core data missed across the board and industrial production tumbled to its weakest 17-1/2 years as reported last night....On Sunday night, President Trump tweeted there is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack and under what terms to proceed, while he tweeted that there is plenty of oil and suggested it is fake news he is willing to meet with Iran without conditions."
Saudi Oil Attack Is the Big One -Wall Street Journal
"Saturday's attack on a critical Saudi oil facility will almost certainly rock the world energy market in the short term, but it also carries disturbing long-term implications. Ever since the dual 1970s oil crises, energy security officials have fretted about a deliberate strike on one of the critical choke points of energy production and transport. Sea lanes such as the Strait of Hormuz usually feature in such speculation. The facility in question at Abqaiq is perhaps more critical and vulnerable. The Wall Street Journal reported that 5.7 million barrels a day of output, or some 5% of world supply, had been taken offline as a result....The attack could build in a premium to oil prices that has long been absent due to complacency. Indeed, traders may now need to factor in new risks that threaten to take not hundreds of thousands but millions of barrels off the market at a time. U.S. shale production may have upended the world energy market with nimble output, but the market's reaction time is several months, not days or weeks, and nowhere near enough to replace several million barrels. After the smoke clears and markets calm down, the technological sophistication and audacity of Saturday's attack will linger over the energy market."
Drone Attack on Saudi Oil Field Seen as Realizing Worst Fears -Bloomberg
"For many of the national security teams that monitor threats on the U.S., the apparent drone strike Saturday on the heart of Saudi Arabia's oil production facilities was the realization of their worst fears. Houthi rebels battling Saudi Arabia in Yemen took responsibility for the attack and said they used drones, though U.S. officials have said Iran was behind the attack and that at least some cruise missiles may have been used. The attack underscored fears raised by U.S. security officials and experts in terrorism about the rapid evolution of technologies that could have allowed inexpensive devices to pierce Saudi defenses in a way that a traditional air force could not: flying long distances to drop potent bombs that apparently set vast portions of the Saudi petroleum infrastructure ablaze....The implication of Saturday's attacks are enormous, Price said. They not only highlight the growing technical capability of rebel groups, but could also serve as inspiration for home-grown terrorists in the U.S. who may be motivated by the Islamic State or al-Qaeda, he said. 'Flying a drone, that puts a new spin on things,' he said. 'It enables attacks that previously weren't able to be conducted with that level of stealth and detachment from the attacker.'"
9.13.19 - Can Gold Help Diversify a Portfolio?
Gold last traded at $1,499 an ounce. Silver at $17.56 an ounce.
NEWS SUMMARY: Precious metal prices backed off Friday on short-term profit-taking. U.S. stocks traded mixed amid improving sentiment around U.S.-China trade relations and Apple price target downgrade.
Can Gold Help Diversify a Portfolio? -Barrons
"Gold has had a great run this year. But it's always had a questionable reputation among many money managers because of its volatility and difficulty in valuing. Now, InvestmentNews cites a study showing that a 5% allocation to the yellow metal improves the risk-adjusted performance of a standard portfolio of 60% stocks and 40% bonds. For optimal risk-adjusted performance, as measured by the Sharpe ratio, the standard 60-40 portfolio should be set at 60% stocks, 5% bonds and 35% gold, according to GraniteShares' research. 'Adding gold to a portfolio improves the Sharpe ratio, and a 35% allocation is optimal,' said Will Rhind, founder and chief executive of GraniteShares, an ETF provider whose funds include the GraniteShares Gold Trust ETF (BAR). Rhind adds: 'Gold has more value in a portfolio than most people think.' When the analysis was pushed back to the beginning of 2000, it showed that adding an allocation of just 5% gold provided superior or equal risk-adjusted returns to a 60-40 portfolio 79% of the time."
China: De-Dollarization Bid Continues amid Trade War -Market Realist
"As the trade war rages on, China's de-dollarization bid continues. The trade war is taking a toll on the US and Chinese economies. China seems to be more on the losing end. There's a trade imbalance between the two countries. The US has much more maneuverability to target Chinese imports. Also, due to trade uncertainty and tariff structure, many US companies are moving their production away from China, which impacts the country. In August, the trade war escalated to a whole new level. President Trump announced tariffs on an additional $300 billion of Chinese goods. The Chinese central bank devalued the yuan to the lowest level in about a decade to offset some of the impacts from the tariffs. On August 23, China announced retaliatory tariffs on $75 billion worth of US products. However, the tensions calmed down at the beginning of September. Both sides decided to meet for trade talks in October. Due to rising trade tensions, China is trying to diversify away from the US dollar. China continues to pile into gold. Gold is a safe-haven asset and a hedge in times of uncertainty. In August, China added to its gold reserves for nine consecutive months....If the trade war escalates more, President Trump might try to manipulate the US dollar. If there’s a currency war, gold would probably be the winner."
Should You Spend, or Save, as if You’ll Live Forever? -New York Times
"Older people's ability to proclaim their youth, strength and all-around-great lives appears to be thriving. But the age you feel, as opposed to the years you've accumulated, affects how you think about your money, many experts now believe. They say it influences how people save, spend, donate and plan what to leave to heirs. This effect isn't confined to people who are just comfortably upper middle class. Chip Conley, founder of the Modern Elder Academy, said research had found that as long as they are in good health, even those in the lower middle class reassess their finances in their 50s to prepare for longer lives than they might have expected....People who feel fit are acting much differently, working longer or taking on side projects to supplement their savings. They're doing this while traveling and enjoying themselves. In a sense they're doing what twenty-somethings can do without fear. 'We try to help people understand the way we live today you're going to have a lot of adult life ahead of you, so don't get caught up on how Social Security is going to support you,' Mr. Conley, 58, said. 'You're not going to retire at 65. You're going to have part-time work by desire or need.' 'To encourage people to think of working way into their 70s, we talk about how retiring can be bad for your health,' Mr. Conley said, mentioning research on longevity rates and retirement. 'People need to build skills that allow them to build money. They could be an Airbnb host with a cottage in their backyard, plus $20,000 from Social Security and then part-time consulting at $20,000. That's enough to live for a very long time.'....Old age is a new thing, and that requires people to reimagine how they're going to pay for it."
Everyone Knows the Truth About Politics -Noonan/Wall Street Journal
"Everyone knows Donald Trump can be taken in 2020, but everyone doubts the ability of the current Democratic field to do it. Everyone knows Elizabeth Warren has successfully created and inhabited a persona - the determined, high-energy fighter full of plans - and is killing it. She knows she has gone too far left for the general electorate and will introduce nuance and an air of greater moderation once she gets the nomination. Everyone knows this. Everyone knows the Democratic moderates are going nowhere and cluttering up every stage, but no one minds their being there because they make the party look sane. Joe Biden may have about 30% in the polls, but that means all the candidates to his left have about 70%...The Democratic Party really HAS gone sharply left, and everyone knows....When we talk about politics we all obsess on alt-right and progressive left, those peas in a sick pod, and no one speaks of the center, which is vast and has something neither way-left nor way-right has, and that is a motivating love for America itself, and not for abstractions and ideologies and theories of the case. As a group they are virtually ignored, and yet they are the center of everything. They include those of the left who are no longer comfortable in a new progressive party. And rightists not comfortable with Mr. Trump, or with the decisions and approaches of the Bush era. It includes those experiencing ongoing EID - extreme ideological discomfort. In this cycle they continue to be the great ignored. And everyone knows."
9.12.19 - Gold Looks 'Unstoppable' Says Barrons
Gold last traded at $1,507 an ounce. Silver at $18.17 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on bargain-hunting and a weaker dollar. U.S. stocks rose modestly after a senior Trump administration official denied a report about the U.S. mulling over an interim trade deal with China.
ECB Launches Major Stimulus Package, Cuts Key Rate -Wall Street Journal
"The European Central Bank cut its key interest rate and launched a sweeping package of bond purchases Thursday that lays the ground work for what is likely to be a long period of ultraloose monetary policy, jolting European financial markets and triggering an immediate response from President Trump....It is the ECB's largest dose of monetary stimulus in 3½ years and a bold finale for departing President Mario Draghi, who looks to be committing his successor to negative interest rates and an open-ended bond-buying program, possibly for years. The euro fell against the dollar after the decision was announced, down 0.4% at $1.10...In a tweet, Mr. Trump said the ECB was 'trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.'....'The final showdown has started with a big bang,' said Carsten Brzeski, an economist with ING in Frankfurt."
What Gold's Recent Price Rise is Telling You -Craig R. Smith/Swiss America
"What should rising gold prices be telling you? After seven years of trading in a tight range, metals have now broken the technical barrier and are ready to continue the climb....Owning physical gold and silver as 'wealth insurance' is the bedrock of a well diversified portfolio. Along with providing needed portfolio safety, precious metals have also quietly outperformed every other major asset class for almost 20 years; including stocks, bonds and real estate! During the latest gold bull market (2002-2011), it took over 3 years for gold prices to rise $200/oz. But starting this June, gold prices rose over $200 – to above $1,500/oz. in just ten weeks! At this pace gold prices could exceed their previous 2011 high of $1,800/oz. by the end of 2019! Most precious metal analysts agree this is a confirmation of the beginning stage of an explosive new precious metals bull market, which is likely to take both gold and silver prices to fresh historic highs....Now is the time to take action, before prices run any further. Price dips present an excellent buying opportunity. To learn more about the gold-to-silver ratio, please call Swiss America at 800-289-2646 and request our Special Alert. Full Story
Gold's Rise Looks Unstoppable. It Could Hit $2,000, Analyst Says. -Barrons
"Citigroup Senior Commodities Strategist Aakash Doshi thinks gold may top $2,000 an ounce in the next year or two, a gain of about 34% from its current price...'We now expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,' Doshi wrote. Bullish factors cited by Doshi include 'lower for longer nominal and real interest rates, escalating global recession risks - exacerbated by US-China trade tensions - heightened geopolitical rifts and amid rich equity and credit market valuations, coupled with strong central bank and investor buying activity.' Doshi boosted his fourth-quarter gold forecast by $125 an ounce to $1,575 and his calendar 2020 projection to $1,675, while noting an 'increasing probability' that bullion markets 'retest' their highs from earlier in the decade. In a recent interview, Jens Nordvig, the founder and CEO of Exante Data, said that, given the 'extreme bull market in bonds, gold will be very well supported.' He noted that central banks have boosted their purchases of gold and said, 'Nobody's crying when gold goes up, so there's really no anchor on how high it can go.'"
Wall Street is freaking out at the thought of President Liz Warren -New York Post
"The 2020 election is still a long way off, but the nation's big banks are already pricing in the possibility of an Elizabeth Warren presidency, their senior executives tell me. The picture ain’t pretty - for the banks or average Americans....They know Warren has a built-in hatred for financial institutions and folks with wealth. President Trump would destroy her, though, right? Not so fast, the bankers say. The Trump economic boom is showing signs of some weakness, thanks to Trump's trade war and conditions globally....Warren has spoken often about dismantling mega banks like JP Morgan and re-instituting the Depression-era Glass-Steagall law that separated their commercial lending and deposit operations from their Wall Street activities. She believes that combination proved deadly in the run-up to the financial crisis, because their risk-taking infected the consumer side, ultimately forcing a government bailout....Stocks would plummet, as would retirement savings - and not just for fat cats, but for every teacher, fireman and cop."
9.11.19 - The 9/11 Generation Comes of Age
Gold last traded at $1,503 an ounce. Silver at $18.17 an ounce.
NEWS SUMMARY: Precious metals prices rose Wednesday on bargain-hunting despite a firmer dollar. U.S. stocks rose as Apple added to its gains from the previous session after unveiling their newest products.
Citi says gold prices may top $2,000 an ounce -Marketwatch
"Analysts at Citi say gold prices will 'trade stronger for longer' and see them possibly topping $2,000 an ounce and posting new highs in the next year or two. 'We now expect spot gold prices to trade stronger for longer, possibly breaching $2,000/oz and posting new cyclical highs at some point in the next year or two,' the analysts said in a note published Tuesday. 'From a birds-eye view, low(er) for longer nominal and real interest rates, escalating global recession risks - exacerbated by U.S.-China trade tensions - heightened geopolitical rifts amid rich equity and credit market valuations, coupled with strong central bank and investor buying activity, are all combining to buttress a bullish gold market environment.'"
$200 trillion in global debt at risk if trust falters -Sidney Morning Herald
"The Organization for Economic Co-operation and Development (OECD) has warned almost $200 trillion in public and private debt could be the catalyst for another global economic crisis if trust in government and financial institutions deteriorates...The OECD also said the destruction of trust following the global financial crisis (GFC) had contributed to the rise of crypto-currencies, which themselves were exacerbating the globe's economic risks. The OECD is forecasting global economic growth to edge down to 3.3 per cent over 2019, partly in response to the US-China trade war and the fallout of the Brexit debate in Britain and Europe. It expects Australia to grow at 2.7 per cent. In its annual report into key issues facing businesses and the financial sector, the Paris-based think-tank said governments had invested huge amounts of political capital and public finances into rebuilding the trust destroyed across the financial sector by the GFC in 2008....A decade after 'excessive debt' in the housing market brought the global economy to its knees, the OECD said even more debt today could precipitate a loss of trust in financial and political institutions. 'Should global economic growth and credit conditions continue to deteriorate, a new bout of financial stress could erupt, the financial markets could become more vulnerable to episodes of contagion,' it said."
Trump says Fed 'boneheads' should cut interest rates to zero 'or less' -CNBC
"President Donald Trump on Wednesday continued his verbal assault on the Federal Reserve, which he blames for slowing the economy, tweeting that the central bank should cut interest rates to zero or even set negative interest rates. The president also called Fed officials 'boneheads' in the tweet. 'The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term,' he said. A Fed spokesman declined comment on the latest Trump salvos. The president also made a new suggestion not seen in some of his past attacks on the Fed, saying that the country should refinance its debt load. The U.S. has $22.5 trillion in debt, $16.7 trillion of which is held by the public. That debt load has grown $2.6 trillion, or 13% under Trump, due in part to the 2017 tax cut that the president shepherded through Congress. Taxpayers have shelled out $538.6 billion in interest costs in the 2019 fiscal year, easily a record. The idea for 'refinancing' federal debt is without any modern precedent....The Fed is expected to approve another quarter-point rate cut at its meeting next week, following July's reduction that was the first such move in 11 years. Markets foresee one more reduction before the end of the year and another in early 2020."
The 9/11 Generation Comes of Age -Wall Street Journal
"It's always difficult to determine precisely when an epochal event makes the transition from memory to history, but 2019 may well mark that moment for the terrorist attacks of Sept. 11, 2001. This week's 18th anniversary can be seen as both the legal coming-of-age of the cohort born in the wake of al Qaeda's assault and the generational passing of the torch from the children of the Cold War to the children of the war on terror....Many members of the '9/11 Generation' - the young Americans who have come of age in a world still wrestling with the consequences of the day - remember not so much the events themselves as the way they were refracted through the emotions of the adults around them. Beau Garner, who lived in Michigan and was just 3 on 9/11, said, 'My only memory is my mom standing in front of the TV watching the news.'....For many, al Qaeda's attacks marked a profound moment of growing up. 'I just couldn't understand why anyone would want to hurt so many people,' recalled Kristin Camille Chez, who was a fifth-grader in Florida in 2001....We rarely know precisely how milestone events transform entire generations, even as we note the way that those who came of age during the Great Depression so often remained frugal and how those who lived through Vietnam and Watergate tended to doubt national leaders and institutions. We don’t yet know what the lasting impact will be of coming of age in a country engaged in seemingly perpetual war....The 9/11 generation, numbering roughly a quarter of the U.S. population, has never known the peace, security and swagger that pervaded America in the 1990s - when the political scientist Francis Fukayama could proclaim 'the end of history' on American terms."
9.10.19 - Real US Debt Levels 2000% of GDP
Gold last traded at $1,499 an ounce. Silver at $18.18 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Tuesday amid mild profit-taking as well as bargain hunting. U.S. stocks fell, weighed down by a continuing decline in tech shares while Ford was pressured by a downgrade to its credit rating.
Every reason to avoid buying a gold ETF -Sovereign Man
"ETF stands for 'exchange-traded fund'. It's sort of like a mutual fund that's listed on the stock exchange, meaning investors can buy/sell shares of an ETF just like they would buy/sell shares of Apple, Ford, or Netflix. But unlike Apple, which is an operating business with employees, products, revenue, etc., an ETF is NOT an operating business. It's a fund that merely pools capital to own assets....The ETF is a LOT easier for most investors. But there are also ETFs for gold and silver. And I find this mystifying...Gold and silver are easy to buy...So gold ETFs provide no added convenience. Yet there's an enormous amount of downside....First off - it's important to know that if you buy an ETF, you're paying for a ton of unnecessary expenses. The ETF has to pay custodian fees, marketing fees, listing fees to the New York Stock Exchange, audit fees, management fees, etc. If you own physical gold in your own safe, you wouldn't have to suffer the cost of paying lawyers, auditors, and investment bankers. So how do they (ETFs) pay for this mountain of expenses? By selling gold. Your gold. GLD trustees periodically sell off the gold (that's supposedly owned by the investors) in order to pay expenses....Seriously, you have to be insane to buy GLD. Sure, it's convenient to click a button and buy GLD with your brokerage account. But it's also convenient to buy physical gold coins...So gold ETFs have no real advantage. But the disadvantages are numerous."
Why the coming recession could force the Fed to swap greenbacks for digital dollars -Marketwatch
"A movement has been brewing among economists, financial-services professionals and central bankers to encourage a rethinking of the technology of currency - those paper notes we carry in our wallets - with an eye toward issuing a digital currency. Some argue that could give central banks the tools necessary to break free of chronic disinflation and persistently low or negative interest rates, while providing Americans a risk-free means to transact in a world where digital commerce constitutes a growing share of the economy....Americans already use digital currency for most of their purchases. In 2018, they used physical dollars for just 26% of transactions, versus 62% with digital currency, which includes credit cards, debit cards and bank transfers, according to the Fed...The local bank that manages your savings account could fail at any time and the dollars in your account (beyond those insured by the FDIC) would disappear. A Fed 'e-dollar' would persist as long as the U.S. government does....The current economic expansion is the longest in U.S. history, but warning signs of a recession abound, including slowing economic growth and the recent inversion of the yield curve for U.S. government debt. In response, the Fed reduced interest rates in July and hinted at more cuts to come. But economists worry that the Fed will not have enough ammunition to fight the next downturn, as the central bank has typically had to cut rates by at least five percentage points to stimulate the economy following a recession. The Fed may be forced to restart its program of 'quantitative easing,' or the purchase of long-term government debt to push down long-term interest rates, though there is growing concern that this is an ineffective tool....While the Federal Reserve is unlikely to issue e-dollars anytime soon, it will surely be watching digital-currency experiments undertaken by central banks around the world....As economic storm clouds gather over the United States, and as the Federal Reserve appears to lack the ammunition to save the country from the sort of prolonged malaise that has overtaken other wealthy economies, it's possible that the next crisis-driven revolution in monetary policy is at hand."
Real US debt levels could be a shocking 2,000% of GDP -CNBC
"Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level. AB Bernstein came up with the calculation - 1,832%, to be exact - by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions....'U.S. debt is large. And it's growing. But if we want to think about debt problems (in any sector - sovereign, households, firms or financials) the conditions rather than the levels are more significant,' Carlsson-Szlezak said. The warnings about potential debt hazards come as the total federal debt outstanding has surged to $22.5 trillion, or about 106% of GDP. Advocates for fiscal reform argue that the debt impact has indeed reached the point where action is necessary. 'Globally, we have become over-reliant on borrowing as a solution for everything. Political excuses abound for why it doesn't matter, which just clearly isn't the case,' said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan committee of legislators. 'We are quickly approaching a situation where we have dug ourselves a debt hole which is doing to have profoundly negative effects on the economy for probably decades going forward,' MacGuineas added."
US heading toward worst financial crisis since Great Depression -Sanford/Fox Business
"Former Republican South Carolina Gov. Mark Sanford, who announced on 'Fox News Sunday' he is challenging President Donald Trump, said he foresees 'the most significant financial storm... since the Great Depression.' 'It's not just debt and spending, which is, again, my primary focus given the fact that we're walking our way toward the most significant financial storm, I believe, in our country since the Great Depression,' Sanford said. 'That's what we're walking toward.' 'And I think we need again to have a real conversation about what that means for the American dream and what that means in our ability to achieve a job, wealth, and all the things that go with the American dream.' Sanford also spoke against Trump's trade war with China. 'We need to as well have a conversation on, where are we going on trade, protectionism, turning inward versus outward,' he told host Chris Wallace, saying tariffs may cost $1,000 per U.S. household. The politician, who is no stranger to scandal after exiting the governorship under the cloud of a highly publicized extramarital affair, has aligned himself with the Never-Trump camp."
9.9.19 - Silver's Golden Opportunity
Gold last traded at $1,510 an ounce. Silver at $18.20 an ounce.
NEWS SUMMARY: Precious metal prices took a healthy breather Monday on mild profit-taking. U.S. stocks rose near record levels amid increasing optimism around U.S.-China trade relations.
SILVER – GOLDEN OPPORTUNITY -Gold Switzerland
"Silver is probably one of the most undervalued investments that you can buy today. Since the top in 2011 at $50, silver went as low as $14 in 2015. But we must remember that silver was $4 in 2002....If you hold silver today, or if you intend to buy, you are now looking at one of those times in history when an investment is likely to make spectacular gains for an extended period of several years. But let me warn you. Silver is not for widows and orphans. The move up will also see periods of vicious corrections that will keep you awake at night, if you are a nervous investor....Once gold broke the 6 year Maginot resistance line at $1,350 in late June, this was the signal for the metals getting out of the starting blocks. That break was the signal and the gold/silver ratio peaked a few days later near 94-to-1. As silver is now going up faster than gold, the ratio is coming down fast and has so far lost 13%. But that is just the beginning. I expect that ratio to first come down to the 2011 low at 30-to-1. This means silver will go up 3x faster than gold (ratio goes from 94 to 30). If we take an example that gold will reach an intermediate top at say $2,000, and the gold/silver ratio then reaches 30. That would mean a silver price of $66....But remember that you are not buying gold or silver for short term price gains and therefore price targets are unimportant. Physical precious metals are bought for wealth preservation purposes. You buy and own physical gold and silver as insurance against a totally rotten and manipulated financial system which is unlikely to survive in its present form."
The Fed Can't See Its Own Shadow -Wall Street Journal
"Over the past few weeks 30-year bonds yielded less than 2% interest. That inverted the yield curve as short-term rates were higher, including the rate on repurchase agreements and what the Federal Reserve pays on excess reserves. Should we blame the usual suspects - a weakening global economy and trade wars? Not so fast. Sometimes it helps to look at things differently. 'There's a dollar shortage,' Jeffrey Snider of Alhambra Investments tells me. 'The market knows what's going on and further knows the Fed doesn't.'...The Fed's assets increased from less than $1 trillion in September 2008 to almost $3.8 trillion today. Sadly, the stimulus hasn't stimulated very much. What went wrong? Maybe the shadow knows. Shadow banking, that is. That's the market for repurchase agreements, or 'repos,' a form of short-term borrowing....'The Fed is, as usual, clueless,' Mr. Snider explains. 'It's a dollar shortage across several different facets, including foreign exchange, which is not something the Fed can recognize especially since it involves the global dollar system rather than just certain domestic pieces of it.' The U.S. dollar is indeed global. China and others use dollars as reserves instead of gold. Dollars are involved in 87% of currency exchanges world-wide....So what should they do? Encourage the Treasury to issue more of the long bonds the market is demanding: 30- or even 100-year. Feed the beast. Then stop quantitative easing: It doesn't work and soaks up collateral."
US-China trade war risks becoming a currency war -The Hill
"Leaders of the world's most advanced economies - Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, known as the Group of 7 (G-7) - met in France last month, with the world markets on edge and economies slumping....One formidable challenge on the minds of G-7 leaders was the escalating U.S.-China trade war and its fallout on world markets and slowing global economy...To the trade war's disruption we now can add the possibility of even greater disruption from a potential currency war. On Aug. 5, China's currency, the renminbi (RMB), fell below what markets consider the 'psychologically significant' level of 7 RMB to the dollar...President Trump pressed the Federal Reserve to counter by pushing down the dollar's value and pushing up the RMB...Taken together, these actions raise fear of a series of competitive devaluations - a currency war."
Gold will be the last man standing in a currency war -Mobius/Kitco
"Gold will be the last global currency standing as central banks around the world race to debase their paper money, according to billionaire investor Mark Mobius, the founding partner of Mobius Capital Partners. Friday, in an interview with CNBC, Mobius reiterated his bullish outlook on gold and said that all investors should have at least 10% of their portfolio in physical gold. 'Physical gold is the way to go, in my view, because of the incredible increase in money supply,' said Mobius, in the interview. 'All the central banks are trying to get interest rates down, they are pumping money into the system.'....Mobius added that the recent strength in the U.S. dollar could be the spark that ignites a global currency war. Mobius said the dollar could start to slide as the Trump administration voices its support for a weak U.S. dollar in an attempt to boost U.S. exports. 'They are certainly going to try to weaken the dollar against other currencies and of course, it's a race to the bottom. Because, as soon as they do that, other currencies will also weaken,' said Mobius. 'People are going to finally realize that you got to have gold, because all the currencies will be losing value.'"
9.6.19 - Tech: More Dangerous Than Dotcom Bubble
Gold last traded at $1,515 an ounce. Silver at $18.11 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on bargain-hunting and a weaker dollar. U.S. stocks rose despite the release of weaker-than-expected jobs data.
Gold rebounds on weaker US jobs growth, eyes weekly gain -CNBC
"Gold turned positive on Friday...as a weaker-than-expected U.S. nonfarm payrolls report weighed on the dollar and increased appetite for safe-haven bullion, putting it on course for a weekly gain....The dollar also dipped following the payrolls data, making gold cheaper for investors holding other currencies. 'Today's jobs number missed expectations, causing gold to bounce higher. It just lends more credence to the fact that the job numbers are getting a little softer and it supports another rate cut by the U.S. Federal Reserve,' said Bob Haberkorn, senior market strategist at RJO Futures. Federal fund futures implied that traders saw a 96% chance for a 25 basis-point rate cut from a current rate of 2.00-2.25% by the U.S. central bank this month. Uncertainties around U.S.-China trade ties, fears of a deceleration in global economic growth and negative Treasury yields around the world were further supporting bullion, analysts said....Bullion has risen about 19% so far this year...Silver was up 0.1% to $18.65 an ounce and was headed for its fifth straight weekly gain."
The Great Debasement -Zero Hedge
"The facts are that the euro lost another 1.4%, the pound another 1.1%, and the yuan another 0.9% last week....Everyone should be bellowing from the rooftops, not about the greatly exaggerated death of the dollar, but that major currencies are dropping so fast! Analysts should be inquiring why they are falling, while their paradigm encourages them to think that it is the dollar which is, or should be, falling. We think it is entirely appropriate to measure these currencies by the US dollar, as they are derived from the dollar. And we measure the dollar by gold. Since the recent peak, at 24.51 milligrams of gold at the beginning of May, the dollar has fallen 12% to 20.34mg. It now seems to be within striking distance of its all-time low set in 2011, about 16mg. In gold terms, since that same date, the euro has fallen over 18%. We don't know why Europeans aren't screaming 'bloody murder' at this not-so-subtle looting. And to a somewhat lesser degree, Americans should be right there yelling too. Instead, gold owners in both currency areas are celebrating. That's because they adhere to the dollar paradigm. Although they know that the dollar loses value, they measure the value of everything else in dollars. They think gold is going up. We have a radical idea: the dollar's loss can be measured in gold. That means: if the price of gold doubles, the gold owner may have twice as many dollars but those dollars are each worth half as much. It is good to own gold, not for making profits but for avoiding the loss of the currency."
Note: Back in 2012 we published The Great Debasement: The 100-Year Dying of the Dollar and How To Get America's Money Back which warned of the dollar's approaching demise. Here is a brief excerpt from Swiss America Chairman Craig R. Smith's Introduction..."After 100 years of deliberate debasement, the U.S. Dollar is dying. America - whose power, prosperity and freedom have been secured by what once was the world's strongest, most trusted money - cannot long survive as a superpower after the dollar dies."
The Fed's Between The Rock And The Hard Place -Capital Speculator
"The Fed finds itself in a dilemma with no precedent in modern times. After cutting interest rates to nearly zero for years after the Great Recession, the central bank has managed a degree of normalization lately by lifting rates. But the tide seems to have turned this summer as the Fed target rate was cut in the face of softer economic data. Federal Reserve Chairman Jerome Powell called it a 'mid-cycle adjustment,' but the change was widely seen as the first of several reductions to counter a downshifting economy....The current target rate is 2.0%-2.25%, leaving little room to fight the next recession using the standard policy tool: reducing the price of money. If an economic downturn started today, the current Fed funds rate would rank as the lowest in the post-World War II era at the start of a recession....If negative interest rates are destiny for the US, a growing chorus of analysts are warning that the trend is doomed to failure as a stimulus effort for the economy. Sub-zero rates also threaten the stability of the banking industry, as Europe has come to learn with its grand experiment with negative terrain....The growing calls for the Fed to give up its monetary experiment and forgo new stimulus may be compelling on paper, but it's hard to imagine that the central bank will stand pat, much less tighten policy, if the economy is slipping into a recession. Indeed, political pressure on the Fed is growing, courtesy of President Trump’s continuing calls for rate cuts. Damned if you do, damned if you don't. It seems that central bank policy has run out of road. Ill-informed or not, the Fed will likely continue to cut rates and perhaps ease into more QE."
The Current Situation is much more dangerous than during the Dotcom Bubble -Hickey/The Market
"Wall Street darlings like Apple, Google and Amazon have dominated this bull market. But today, the so-called FAANG stocks have lost some of their attraction and are lagging the overall market since last year. 'Without participation from the FAANGs it will be difficult for the stock market to rip to new highs', says Fred Hickey. According to the renowned contrarian investor, each of the tech behemoths is struggling with its own fundamental problems, with Apple being the weakest of the group. Hickey also sees a huge gap between fundamentals and valuations in the semiconductor sector...Yet, in contrast to previous cycles, the editor of the 'The High-Tech Strategist' hasn't placed large bets on a crash. That's because he fears that central banks could step in once again and bloat the stock market with new rounds of quantitative easing. 'We’re near a recession if not already in one. Many parts of the world are in trouble. China's growth is at a multi-decade low and its economy might be in a recession. As a result, we see terrible export numbers coming out of Korea and Taiwan. Around the globe, trade, manufacturing and capital spending are contracting. In the tech world, all the end markets are very poor: auto and smartphone sales are declining, PC sales are weak, and semiconductors are in the worst downturn in a decade.'....'And, if you look at the valuations in the stock market as a whole, you could see a 40 to 50 per cent decline there.'....'I have quite a bit of cash, more than I had in a long while...But my biggest position is in precious metals.'....'People are very underinvested in gold and silver. In the past, when people were heavily invested in gold, they had 5 to 8 per cent of their portfolio in gold. Today, we're at a fraction of one per cent...So the smart money has jumped in, the masses of institutions have not yet. We're still in the early stages of this bull market.'"
9.5.19 - Negative Rates Coming to U.S.
Gold last traded at $1,525 an ounce. Silver at $18.80 an ounce.
NEWS SUMMARY: Precious metal prices retreated Thursday on short-term profit-taking. U.S. stocks rose after the U.S. and China agreed to meet next month in Washington to discuss trade.
$10,000 gold is not crazy talk -Holmes/Kitco
"Extremely dovish monetary policies around the world and economic conditions could propel gold prices much higher, to even $10,000 over the long-term. 'I think it goes up to $10,000. I don't think it's going to happen in the next 12 months, but I think the supply of gold, peak gold is there. The supply of gold is not growing. GDP per capita is still strong in China and India and Southeast Asia. 60% is bought for love, and that's a steady demand for gold,' Frank Holmes said. He added that we are now in a paradigm shift where the Chinese have shifted from being market takers of gold to being market makers."
The Economic Future of a Negative Interest Rate World -AIER.org
"Danske Bank of Denmark introduces the first negative 10-year fixed-rate mortgage. The German Finance Ministry voices disappointment at the lack of demand for 30-year zero-coupon bonds. The U.S. and Sweden contemplate issuing 50-year and 100-year bonds. These are all cause for concern. Excessively low interest rates support assets, favor the rich over the poor, favor the rentier (a person living on income from property or investments) over the business investor, encourage leverage and stock buybacks over capital expenditure and equity-capital formation. Income inequality grows, and social instability follows. Corporations that, under a more normal interest rate regime, would have been placed into receivership are able to continue to operate....If an inverted yield curve is the harbinger of recession, there may be trouble ahead....The effect that an artificially low interest rate has on an economy is pernicious. Asset markets are supported, and it raises the point at which they clear, but it also reduces the need for companies to improve internal efficiency. For corporates, borrowing becomes preferable to issuing equity. Firms become more leveraged....For households, lower interest rates encourage borrowing to buy assets...With falling interest rates comes more affordable mortgage financing, boosting property prices....And what of the poor, the unemployed, those unable to clamber onto even the first rung of the property ladder? Populist politicians will seize the opportunity to pander to the dispossessed voter....In the thrall of negative interest rates there is a clear incentive to borrow and a disincentive to save. This is Ponzi finance; it has turned time preference on its head, driving us to borrow from tomorrow to consume today."
Alan Greenspan says it's 'only a matter of time' before negative rates spread to the US -CNBC
"It will not be long before the spread of negative interest rates reaches the U.S., former Federal Reserve Chairman Alan Greenspan said. 'You're seeing it pretty much throughout the world. It's only a matter of time before it's more in the United States,' Greenspan told CNBC's 'Squawk on the Street' on Wednesday. There are currently more than $16 trillion in negative-yielding debt instruments around the world as central banks try to ease monetary conditions to sustain the global economy....'We're so used to the idea that we don't have negative interest rates, but if you get a significant change in the attitude of the population, they look for coupon,' Greenspan said. 'As a result of that, there's a tendency to disregard the fact that that has an effect in the net interest rate that they receive.' He added that gold prices have been surging recently because people are looking for 'hard' assets they know are going to have value down the road as the population ages. Gold futures are up more than 21% in 2019 and are trading around levels not seen since 2013."
Falling From Grace: The Decline Of The US Empire -Zero Hedge
"If we observe the empires of the world that have existed over the millennia, we see a consistent history of collapse without renewal. Whether we're looking at the Roman Empire, the Ottoman Empire, the Spanish Empire, or any other that's existed at one time, history is remarkably consistent: The decline and fall of any empire never reverses itself; nor does the empire return, once it's fallen....All empires follow the same cycle. They begin with a population that has a strong work ethic and is self-reliant. Those people organize to form a nation of great strength, based upon high productivity. This leads to expansion, generally based upon world trade. At some point, this gives rise to leaders who seek, not to work in partnership with other nations, but to dominate them, and of course, this is when a great nation becomes an empire. The twentieth century was the American century and the US went from victory to victory, expanding its power. But the decline began in the 1960s, when the US started to pursue unwinnable wars, began the destruction of its currency and began to expand its government into an all-powerful body. Still, this process tends to be protracted and the overall decline often takes decades....The US is presently in a state of suspended animation. It still appears to be a major force, but its buttresses are quietly disappearing...The final decline will occur with alarming speed."
9.4.19 - Retirement After The Bubbles Burst?
Gold last traded at $1,560 an ounce. Silver at $19.54 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a weaker dollar. U.S. stocks climbed as tensions in Hong Kong between the government and protesters eased after the withdrawal of a controversial bill.
Central Banks Just Love Gold and It's Going to Stay That Way -Bloomberg
"A major gold-buying spree by central banks is likely to persist in the coming years, according to Australia & New Zealand Banking Group Ltd., which flagged the potential for further purchases by nations including China. 'In the current environment, where uncertainty in emerging-market currencies is high, we see good reason for countries like Russia, Turkey, Kazakhstan and China to continue to diversify their portfolios,' ANZ said in a note on Tuesday. Net buying by the sector is likely to stay above 650 tons, it said. Central-bank accumulation of bullion has emerged as a increasingly important trend in the global market, offering additional support for prices that have rallied to the highest level since 2013 on rising demand....Central-bank accumulation of gold 'has further room to run,' Deutsche Bank AG said in a report, citing factors including a gradual migration of reserve assets away from the dollar. 'The stability of central-bank demand should help to bias gold prices higher over longer time frames.'...'Central banks in emerging markets are buying gold,' Jeff Currie, global head of commodities research at Goldman Sachs Group Inc., told Bloomberg Television. 'Why? Because they don't want to own dollars with sanction risk, geopolitical risk, trade-war risk out there.'"
Retirement After The Bubbles Burst? -Smith/Zero Hedge
"What happens when these monstrous speculative bubbles pop? Let's start by stipulating that if I'd taken a gummit job right out of college, I could have retired 19 years ago. Instead, I've been self-employed for most of the 49 years I've been working, and I'm still grinding it out at 65. By the standards of the FIRE movement (financial independence, retire early), I've blown it. The basic idea of FIRE is to live frugally and save up a hefty nestegg to fund an early comfortable retirement. As near as I can make out, the nestegg should be around $2.6 million - or if inflation kicks in, maybe it'll be $26 million. Let's just say it's a lot....Where do you put your expanding nestegg so it earns a positive yield? In the good old days, regular savings accounts earned 5.25% annually by federal law. Buying a house was not a way to get rich quick, it was more like a forced savings plan, as over time real estate earned about 1% above the core inflation rate. But all the safe ways of securing a return have been eradicated by the Federal Reserve. The Fed's 'fix' for economic stagnation was to financialize the U.S. economy, effectively eliminating low-risk returns and forcing everyone to become a speculator in high-risk financial casinos. As a result, the saver seeking a yield above zero is gambling that all the asset bubbles don't all pop before he/she cashes out....Which leads to another strategy entirely: focus not on retiring comfortably, but on working comfortably. Line up work you enjoy that can be performed in old age. That's a much safer bet than counting on the bubble-blowing machinery of the Fed to keep inflating speculative bubbles that magically never pop....What happens when these monstrous speculative bubbles pop? Trillions in phantom wealth vanish, pension funds go broke, states, cities and counties are insolvent, and nesteggs invested in speculative assets dry up and blow away."
In Coming Currency Wars, Gold Is the Only Practical Way to Preserve Buying Power -Dyson/Bonner And Partners
"Why is the price of gold rising around the world? Many countries are about to weaken their currencies. And it starts with America. Look at Trump's recent tweets. Or the U.S. government's $22 trillion in debt (which is effectively a massive bet on the dollar losing value). America needs a weaker dollar to win back industry from overseas and keep the credit flowing. Look at the Chinese, who want their products to seem cheap in the rest of the world. Or the Japanese and the Germans, who compete with the Chinese. Or the Brits, who are about to Eurexit… We're entering an era of 'competitive devaluations' or 'currency wars.' Gold will be the only practical way to preserve purchasing power. The markets are starting to sense this, I think, but it's still just a trickle. Yet as more and more people buy gold, we get closer to the tipping point… the bursting dam… the avalanche. That's the moment when the idea cascades and there's a stampede into gold. Gold will go far higher than it is today… maybe even double or triple. We're not there yet. But it feels like the moment is getting closer....That's why Kate and I sold everything we owned last year and converted ALL our assets to gold and silver. I started nagging my friends and family to get into gold, too. This is the third time in the last 20 years I've had this level of conviction. The first time was in 2002. I converted all my assets into gold then, too. I even took money from my mother's work friends and two of my friends from university and invested it in gold futures. Gold ended up rising 6x over the next eight years....when the Dow-to-Gold ratio hits 5, I'm selling the gold and converting it into high-quality, dividend-raising stocks. This simple, two-step investment strategy should take care of Kate and me for the rest of our lives."
The Greatest Threat to Wealth Preservation is 'It Won't Happen to Me' Syndrome -Maalamalama Wealth Academy
"Unfortunately, the “It Won’t Happen to Me” syndrome has investors worldwide discounting the potential of gold and mining stocks and clinging to overbloated stocks like AMZN, FB, NFLX, GOOG, TSLA, GOOGL and others...For those with a more conservative nature, of course, opting to hold physical gold and silver is the viable option versus the market cap giants of the US stock market....All of us have fallen victim to the 'It Won't Happen to Me' syndrome at some point in our lives, whether it's as simple as going swimming in waters where someone has been seriously injured, or even killed due to a shark attack, no matter how small the probability of such an event being a recurrent one, or whether it's ignoring the possibility of bank seizures in our own countries even though it's already happened in Cyprus and people have lost millions in bank investment products in China, lost millions in bank deposits in Ghana, and multiple red flags continue to manifest in the banking systems of dozens of other nations. When it comes to the greatest threat to wealth preservation, falling victim to this belief that 'it can't happen to me' could prove tragic over the next several years....In a twist of great irony, the reason so many of us embrace the 'It Can't Happen to Me' syndrome is the following. From a psychological standpoint, it preserves our immediate to short-term feeling of well-being by allowing us to disassociate ourselves from reality and encouraging inaction, even though from a long-term perspective, it is very likely to destroy our self-preservation abilities. In other words, the 'It Can't Happen to Me Syndrome' is a form of escapism, the reason movies were so popular as a form of entertainment during the Great Depression....In fact, ever since the overinflated status of the US stock market bubble became apparent, I often have opened every year on this blog by expressing the following sentiment: 'Even if you don't believe that gold and silver will preserve your wealth as the Central Bankers currency wars escalate and you want to ignore the large rebounds that will eventually happen in gold and silver assets,' they will continue to happen whether or not you are aware of them....In conclusion, just because we never have had prior experience with an event, we should never assume that the possibility of that event is invalid. Likewise, we should realize that only legitimizing what we already know can be a very dangerous mindset, and that we all need to step outside of our boundaries of human comfort to explore areas we do not know or understand fully if we wish to remove any layers of passivity that may surround us and take a proactive approach to the developing global financial crisis."
9.3.19 - Silver Joins Gold in a New Bull Market
Gold last traded at $1,555 an ounce. Silver at $19.23 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Tuesday on downbeat economic data and China fears. U.S. stocks fell after the U.S. and China began imposing new tariffs on each other's goods and weak manufacturing data dented investor sentiment.
Silver technically joins gold in a new bull market -Kitco News
"With December Gold continuing to consolidate recent gains above $1500, investors have begun to move quickly into the cheaper safe-haven option of silver which has surged 12% this month and touched an over two-year high of $18.76 on Thursday. Unless there is a harsh selloff later today below $17.50 in 'poor man’s gold', the metal that most everyone has loved to hate since it broke down sharply in 2013 will technically join gold in a new bull market. If history is any guide, leadership and its outperformance in relation to the gold price should continue in silver for the precious metals rally to keep running. Historically, the gold trend in either direction has driven the silver market. Investors typically ignore this tiny sector until gold has rallied long and high enough to convince them its upside momentum is sustainable. In fact, when this current secular bull market in gold began in early 2001, silver did not begin its major up-leg until late 2003....Since the price of silver peaked at nearly $50 per ounce in early 2011, this precious metal with a strong industrial component has continued to lag the gold price until the closely followed gold/silver ratio peaked above 96 on a weekly basis early last month. Once the gold price broke out of a 6-year basing pattern in late June, silver began to wake up from its 8-year slumber. The ratio of gold to silver prices has fallen 13 percent since early July and even though gold has risen sharply during that period, the grey metal has risen faster....The buying opportunity may not last long, as I also expect to see the silver mean reversion to gold continue picking up speed once a technical correction in the precious metal complex has completed. The metal could move quickly towards its 2016 high above $21 heading into the next FOMC meeting on September 17-18, once a healthy correction takes place."
Investors Rush Into Gold -Bloomberg
"Investors are going for gold in a big way. Inflows into bullion-backed exchange-traded funds topped 100 tons in August to hit the highest since February 2013 as the trade war worsened, risk assets took a knock, and central banks signaled looser monetary policy. Holdings rose 101.9 tons, bringing total known assets to 2,453.4 tons as of Friday, according to data compiled by Bloomberg. It was the third straight monthly increase. Bullion's been on a tear, gaining 19% this year, as the global outlook worsened on the stand-off between the U.S. and China. Central bank-buying has provided another layer of support, and Goldman Sachs Group Inc. says prices are likely to advance further as official purchases continue and demand for ETFs rises."
What Economic News Can You Trust? -Wright/AIER.org
"Traditional news may not be 'fake' per se, but people are right to remain suspicious of it...What people sense with the news is that it is not, in fact, trustworthy because the incentives of traditional news providers and their readers are not closely aligned, especially when it comes to economic and financial analysis. That has long been the case in television, hence the constant admonitions to trust newscasters, but today it is also the situation even for newspapers and magazines, as most of their revenue comes from advertisements rather than subscriptions....All the survivors of the great newspaper wars of the last several decades, WaPo, NYT, WSJ, LA Times, and so forth, diversify their page view portfolios by publishing articles along that spectrum....Even the accuracy of some government economic statistics (raw numbers) has been questioned, leading to sites like John Williams' Shadow Government Statistics (which, not coincidentally, is subscription-based). Where else can people turn for news and analysis?....The most powerful independent sources of economic and financial analysis are therefore those backed by endowments, caches of cash-producing assets that allow them to pay smart people to think, research, and write without worrying about pleasing advertisers. Such sources, like Mercatus, the Independent Institute, and the AIER, still face economic realities like opportunity and sunk costs but they can provide a public good from a private source of funding dedicated, basically, to one thing - the Truth, insofar as our feeble human brains can ascertain and elucidate it. That is the closest alignment of incentives between author and audience that money can't buy....Readers, viewers, and listeners should ask themselves if a particular article, segment, or podcast helped them to understand the world in a more nuanced, realistic way, if it helped them to an insight that made their lives better in some tangible way, like improved investment results or a more sophisticated view of a public policy. Such real world results can't be faked."
Overseas Investors Unload U.S. Real Estate -Wall Street Journal
"A strong appetite among foreign investors for office buildings, apartments, malls and other real estate has in part fueled the long-running bull market in U.S. commercial property. Now, amid a maturing property market cycle and rising uncertainties in geopolitics and the global economy, foreign investors have sold more U.S. commercial real estate than they bought in a quarter for the first time since 2013. European and Canadian investors have been active sellers recently, along with some high-profile investors from China. 'U.S. real estate is priced very high right now, and people think we're close to the top of the market,' said Matt Posthuma, a partner in Ropes & Gray's asset management practice....'For someone looking out three to five years, their investments may not be worth as much as they are today,' Mr. Posthuma said. 'That's the fear.' Some domestic investors in commercial property also are moving to the sidelines. Overall, sales volume of commercial U.S. property fell 9% in the first quarter of this year from one year ago....Finding good deals also has become trickier in the U.S. as a possible recession looms and other regional and economic trends - including the impact of e-commerce on the retail sector - cast a shadow over some property types."
8.30.19 - Gold Reminds Governments They're Not in Control
Gold last traded at $1,535 an ounce. Silver at $18.44 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Friday, but rose for the fourth consecutive month. U.S. stocks fell, erasing earlier gains, as Wall Street concluded a volatile month.
Gold inches higher, heading for fourth monthly gain -CNBC
"Gold rose slightly on Friday as fears of a global economic slowdown and uncertainty about the U.S.-China trade war kept the safe-haven metal on track for its fourth straight monthly rise. Spot gold was up 0.24% to $1,531.11 per ounce. However, bullion has gained nearly 8% so this month, heading for a fourth consecutive monthly gain. U.S. gold futures were up 0.21% at $1,540.2 an ounce....Gold prices have risen more than $100 so far this month, mainly driven by the trade war between the world’s biggest economics and heightened fears over a global downturn. The inversion of the U.S. yield curve, where short-dated yields are running above long-dated ones, has also unsettled investors, as it often precedes a recession....Silver jumped 1.1% to $18.44 per ounce and eyed its biggest monthly percentage rise since June 2016, gaining 13% for the month so far."
Gold Reminds Governments That They're Still Not In Control -Snyder/Real Clear Markets
"The Great Depression was a serious crisis no government let go to waste. Removing gold from the public's hands, and relegating it to gold exchange in their hands, the process was set in motion. John Maynard Keynes had won the argument in the official realm; there would be governments through central banks who would control money - but only when they reasoned it was perfectly necessary. The market would be the market with the enlightened few over top to watch over everything. Elasticity at last. What neither Keynes nor his followers had anticipated was what the freedom would do in the private realm. In fact, Bretton Woods was carefully constructed so as to assure the world that gold exchange still functioned as an effective check on government irresponsibility....A dollar which used to mean ownership over a quantity of gold in American hands would come to mean nothing more than a stripped-down unit of account without any borders....As interest rates around the world collapse to new lows and new negative lows, the price of gold has skyrocketed...In that way, it may be the gold market which is having the last laugh. Keynes as others wanted to demonetize gold so as to give the government exclusive authority over money. But what gold is showing us today in 2019 is that they aren't anywhere near being in control."
China trade war drags consumer sentiment down to the lowest level in four years -Marketwatch
"A measure of how Americans view the strength of the economy fell to the lowest level in almost four years, reflecting growing worries about the U.S. trade war with China that's led to higher and higher tariffs. The final consumer sentiment survey fell to 89.8 in August from an early estimate of 92.3 and a 98.4 reading in July, the University of Michigan said Friday. It's the lowest mark since October 2016. Just a year and a half ago, the index hit 101.4 to mark the highest level since 2004. The sharp decline in consumer sentiment stemmed from increasingly negative views of the one-third of respondents that brought up the tariffs on their own. They worry the dispute will increase inflation, reduce incomes and raise unemployment."
It's Never Too Late to Start a Brilliant Career -Wall Street Journal
"Today we are madly obsessed with early achievement. We celebrate those who explode out of the gates, who scorch the SAT, get straight A's in AP courses, win a spot at Harvard or Stanford, get a first job at Google or Goldman Sachs , and headline those ubiquitous 30-under-30 lists. But precocious achievement is the exception, not the norm. The fact is, we mature and develop at different rates. All of us will have multiple cognitive peaks throughout our lives, and the talents and passions that we have to offer can emerge across a range of personal circumstances, not just in formal educational settings focused on a few narrow criteria of achievement. Late bloomers are everywhere once you know to look for them...Early blooming is not a requirement for lifelong accomplishment and fulfillment....In a 2015 study published in the journal Psychological Science, neuroscientists Laura Germine and Joshua Hartshorne measured the abilities of nearly 50,000 adult subjects of various ages on online cognitive tests...Dr. Hartshorne summed up their conclusions; 'There's probably not one age at which you're peak on most things, much less all of them.'....These findings validate what previous cognitive research has revealed: Each of us has two types of intelligence, known as fluid and crystallized. Fluid intelligence is our capacity to reason and solve novel problems, independent of knowledge from the past, and it peaks earlier in life. Crystallized intelligence is the ability to use skills, knowledge and experience; it shows rising levels of performance well into middle age and beyond. According to Georgia Tech psychology professor Phillip Ackerman, the best way for older adults to compensate for declines in youthful 'fluid' intelligence is to select jobs and goals that optimize their 'crystallized' knowledge and skills....Tales of late bloomers are found in every walk of life and often feature an under-appreciated talent that emerged more slowly than the standard expectations....Most people recently born will live into the 22nd century. The vast majority of us will be better served not by high SAT scores or STEM degrees but by discovering and embracing our true talents. A healthy society needs all of its people to recognize that they can bloom and re-bloom, grow and succeed throughout their lives."
8.29.19 - Gold steady; Silver Running on Rocket Fuel
Gold last traded at $1,537 an ounce. Silver at $18.30 an ounce.
NEWS SUMMARY: Precious metal prices eased back on profit-taking and a firmer dollar. U.S. stocks rebounded after China said it wished to resolve its trade dispute with the world's largest economy with a 'calm' attitude.
Gold prices up; silver still running on rocket fuel -Kitco
"Gold prices are modestly higher in early U.S. trading Thursday, but silver continues to power ahead with sharp gains to hit another more-than-two-year high overnight. Safe-haven demand and technical buying continue to be featured in both metals....A slightly weaker than expected U.S. gross domestic product report also landed in the camp of the precious metals market bulls. The second estimate of second-quarter GDP was up 2.0%, year-on-year, versus up 2.1% in the initial reading. However, the 2.0% print was right in line with market expectations....Risk appetite suddenly up-ticked overnight when news reports hit the wires that Chinese government officials have indicated they will not retaliate for the latest round of U.S. tariffs imposed on imports from China and said that the two countries remain in communication on the trade dispute matter. This news coming from China may or may not corroborate President Trump's assertion earlier this week that a high-level Chinese trade official contacted the U.S. to restart trade negotiations. Still, there are enough concerns on the geopolitical front to keep the safe-haven metals supported. Civil unrest in Hong Kong, the Brexit matter that will heat up this fall, and slowing global economic growth are all still front-burner issues for traders and investors....Technically, the gold bulls have the solid overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at $1,600.00."
Central Banks Are Losing Ability to Reverse Downturns -Dalio/Bloomberg
"Ray Dalio thinks the ability of central banks to reverse an economic downturn is coming to an end as the global economy enters what he says are the late stages of the long-term debt cycle. 'Interest rates get so low that lowering them enough to stimulate growth doesn’t work well,' the billionaire founder of investment management firm Bridgewater Associates wrote in an essay published on LinkedIn on Wednesday. Money printing and buying financial assets won't work either, Dalio said, as it doesn't produce adequate credit in the real economy and creates the need for large budget deficits and then their monetization....U.S. President Donald Trump on Wednesday renewed criticism of the Federal Reserve, saying in a tweet that it had 'no clue.' Earlier this month, he said the bank needed to cut rates by at least 100 basis points."
July Pending Home Sales Plunge Back Into Contraction -Zero Hedge
"Pending home sales tumbled 2.5% MoM in July (notably below the expectation of 0.0%) and stumbled back into contraction year-over-year. Pending Home Sales retreated back into contraction YoY (by 0.3%)...'Super-low mortgage rates have not yet consistently pulled buyers back into the market,' Lawrence Yun, NAR's chief economist, said in a statement. 'Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.' Pending home sales are often considered a leading indicator of existing-home purchases and a measure of the health of the residential real estate market in coming months."
Trump's Game of Chicken -Yardeni Blog
"President Donald Trump seems to be playing simultaneous games of chicken with Fed Chair Jerome Powell and Chinese President Xi Jinping. Last Friday, he raised tariffs again on US imports from China and ordered US companies to leave China. He also said that Fed Chair Jerome Powell is a greater enemy than Xi. Trump’s game plan is to create more uncertainty about trade, thus increasing the risks for US economic growth so that the Fed will have to respond with more interest-rate cuts. At the same time, he hopes that Xi will relent by agreeing to a trade deal that is good for the US economy. Our 7/11 Morning Briefing was titled 'Powell Gets Trumped!' I wrote: 'President Donald Trump wants the Fed to lower interest rates. Fed Chair Jerome Powell claims that the Fed is independent and won't bow to political pressure. Yet Trump has figured out the perfect way to force the Fed to lower interest rates. All he has to do is keep creating uncertainty about US trade policy...Sure enough, the Fed lowered the federal funds rate by 25bps on 7/31. However, that afternoon, Trump said that it wasn't enough and that he wants more easing right away. Trump was quick to attack the Fed's decision....Bill Dudley served as president of the Federal Reserve Bank of New York and as vice chairman of the Federal Open Market Committee from 2009 to 2018. He revealed his antipathy for the President in a 8/27 Bloomberg View op-ed titled 'The Fed Shouldn't Enable Donald Trump.'....The Fed shouldn't offset the uncertainties caused by Trump's trade policies with lower interest rates, even if that leads to a recession. The Fed should refuse to meet its legal mandate to maintain full employment and price stability rather than enable Trump. Dudley is essentially calling for the Fed to overthrow the President in the coming election....I am almost speechless. Dudley may be calling on the Fed to join the resistance and to fight fire with fire, but that would be playing with fire for the Fed. Welcome to the New Abnormal, where everyone loses their minds!"
8.28.19 - Analyst predicts 'Lehman-like' Stock Drop
Gold last traded at $1,549 an ounce. Silver at $18.31 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Wednesday on mild profit-taking and a firmer dollar. U.S. stocks rose, shrugging off recession worries, as the energy sector got a lift from higher oil prices.
Analyst predicting 'Lehman-like' stock drop -CNBC
"Remember the brutal sell-off last year when stocks suffered their worst December since the Great Depression? Something worse than that could happen in days, a Nomura analyst said. Macro and quant strategist Masanari Takada turned heads earlier this month with his bold call for a 'Lehman-like' plunge. He's sticking with this prediction as market sentiment shows no signs of improving, leading him to believe a monster sell-off could arrive this week. 'The U.S. stock market especially is facing its greatest test of the year thus far,' Takada said in a note to clients on Monday. Low sentiment is poised to prompt 'panic-selling by fundamentals-oriented investors and systematic selling by trend-following technical investors along the way,' he said....The Dow tanked more than 33% in 2008, the year in which Lehman Brothers went bust. The collapse helped catalyze the financial crisis and bring on the Great Recession. By March 2009, the benchmark hit its lowest level of 6,443.27, a peak-to-trough decline of about 55%. Takada pointed out market performance over the past two weeks showed an 'uncanny resemblance' between now and 2008...'If this uncanny resemblance between the two patterns continues to hold, sentiment could soon fall to a level not seen since December 2018,' he added."
Gold higher but silver sets the pace -Saefong/Marketwatch
"Gold prices climbed to their highest finish since 2013 and silver rallied to a more than two-year high on Tuesday, with losses in U.S. stocks and a drop in Treasury yields providing a boost to the precious metals as investors hopes for progress on U.S.-China trade talks faded....'Overall if trade tensions remain elevated, gold can count on this issue as being flat out supportive,' said Stephen Innes, managing partner at Valour Markets, in a note. 'Gold is breaking out of its recent range, and has room to run,' wrote Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, in a note. 'Resistance should come in next at psychologically-important round numbers ($1600, $1700) and the February 2013 high ($1615), Samana said. (see chart)....Meanwhile, silver has outpaced gold's gains in August, posting nearly 11% rise so far this month versus an almost 8% rise for the yellow metal. 'It should also be noted that silver is beginning to get a chorus of bullish analyst forecasts suggesting the metal will begin to outperform gold,' said analysts at Zaner Metals."
The US dollar's days as the world's most important currency are numbered - it's official -Moneyweek
"When central bankers attended their annual get-together at Jackson Hole in Wyoming last week, all eyes were on Jerome Powell, chair of the Federal Reserve, America’s central bank. But in the end, it was Bank of England governor Mark Carney who came out with the most interesting speech. People who talk about the 'demise of the dollar' have been viewed as cranks for decades now. Yet in his own technocratic way, that’s exactly what Carney was forecasting. The end of the current global monetary regime....When the US dollar is strong, monetary policy is tight for the rest of the world, and vice versa...The dollar's share of global transactions of all sorts is far, far bigger than America's share of global GDP, for example. There’s a clear problem with this. If you use another country's currency, then you are subject to its monetary policy. And monetary policy that works for one country doesn't always work for another, as we've seen in the eurozone....Dollar dependence can create spirals of panic....The solution - and something which history suggests will happen inevitably in some form - is to move away from the US dollar as the reserve currency....Make sure that your portfolio is positioned to benefit from that kind of turbulence, rather than be upturned by it."
Forget 1984, We're Facing A Brave New World -Zero Hedge
"I see quite frequently, people warning that the US is becoming an 'Orwellian nightmare,' or that we're living in a country that's fast becoming a new 1984. I think they're wrong. It's worse...Our burgeoning dystopia isn't as overtly dystopian as Orwell warned against, and that's the problem....Get yourself a copy of Aldous Huxley's Brave New World and you'll start to see the problem...1984 was about a government that would ban information and rule with a leather boot on your throat, whereas Brave New World was about a system that would slowly seep into our life like a drug. In other words, Orwell warned us about a dystopia that we wouldn't be able to stop, Huxley warned us about a dystopia that we would beg not to stop. The US isn't becoming Orwellian, it's becoming Huxleyan....For quite a while now, we've gotten used to user-created credit systems such as Yelp and Amazon reviews. They’re very helpful with deciding what product to buy or service to use. They're also very unreliable and easily faked. This idea of reviews is being expanded to other systems. Uber allows you to review your driver so others can have a better ride experience or avoid someone who's smelly or annoying. Airbnb lets you read about locations and owners to give you a better idea about what the stay will be like. Did you know that you're also being evaluated when you use these services?....As we become more accustomed to this increasingly-aggregate score being allowed to affect our lives and our freedoms, we will be more willing to follow whatever guidelines are put in place to achieve higher scores, whether that be buying the right things, saying the right things, or even worse - not saying the wrong things. As we see more value in these systems, we'll not only stop fighting against them affecting our lives, we'll soon beg for them. We may not be living in 1984 but have no doubt, a Brave New World is on the horizon."
8.27.19 - Gold Rushes Toward $1,600, $18 Silver
Gold last traded at $1,551 an ounce. Silver at $18.15 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Tuesday amid safe haven and technical buying. U.S. stocks fell as investors digested the latest developments from the U.S.-China trade war.
UBS Says It's Staying Long Gold as Price Now Destined for $1,600 -Yahoo Finance
"Gold will extend its winning ways as the U.S.-China standoff harms growth, risking a deeper slowdown and inviting more central-bank easing, according to UBS Group AG, which jacked up price forecasts with a prediction the precious metal may hit $1,600 within three months. 'The trade war between the U.S. and China has escalated to a new level,' Giovanni Staunovo and Wayne Gordon, analysts at the wealth-management unit, said in a report received on Monday. 'Gold has demonstrated its safe-haven qualities and we stay long the metal, a trade we initiated in mid-May.' UBS has a six-month forecast of $1,600 and 12-month view of $1,650. Previously, both the half-year and 12-month outlooks were set at $1,500. Futures pared gains in an abrupt move on Monday after earlier rallying as much as 1.8% to $1,565 an ounce, the highest since 2013."
Insiders are selling stock like it's 2007 -CNN Business
"The leaders of Corporate America are cashing in their chips as doubts grow about the sustainability of the longest bull market in American history. Corporate insiders have sold an average of $600 million of stock per day in August, according to TrimTabs Investment Research, which tracks stock market liquidity. August is on track to be the fifth month of the year in which insider selling tops $10 billion. The only other times that has happened was 2006 and 2007, the period before the last bear market in stocks, TrimTabs said. Investors often view insider buying and selling - transactions performed by top executives, leading shareholders and directors - as a signal of confidence...The acceleration of insiders heading for the exits could indicate concern about the challenges ahead, especially as the US-China trade war threatens to set off a recession. 'It signals a lack of confidence,' said Winston Chua, an analyst at TrimTabs. 'When insiders sell, it's a sign they believe valuations are high and it's a good time to be outside the market.' Recession fears have ignited a burst of market volatility over the past year, punctuated by the worst December since the Great Depression."
Cities Are Saying 'No' to 5G, Citing Health, Aesthetics - and FCC Bullying -Wall Street Journal
"Billed as the key to the future - of telecommunications, of global competition, of innovation and even of municipal infrastructure - 5G has instead become a bone of contention. In addition to upgrading existing towers, it will require an estimated half-million new towers and small-cell sites on utility poles, lampposts and buildings. Experts also anticipate a long rollout period, potentially of a decade or more. Most cities want 5G, but they don't want to be told how, when and at what cost. Rules the FCC has already passed, meant to expedite 5G's rollout, might well be creating acrimony that serves to do the exact opposite. 'My personal reason for doing this is I believe that humanity is threatened,' says Sandi Maurer, a member of the activist group EMF Safety Network, which lobbies to reduce people's exposure to electromagnetic fields. Partly as a result of such activism, many towns in Marin County, Calif., have passed ordinances or resolutions that limit 5G cell sites in residential areas. But since then, the FCC has rolled out its 5G Fast plan requiring cities and states to approve new 5G antennas within 60 or 90 days. It also limits what government leaders can charge carriers for the real estate on which the new infrastructure will hang - be it a utility pole, streetlight or even building facade....City leaders say their power to zone and regulate infrastructure is being abridged. More than 90 cities and counties have joined together in a lawsuit, currently before the Ninth Circuit Court of Appeals, arguing that the FCC has overstepped its authority. A decision could happen as early as in the spring, but it could also take much longer....The health argument is hard to take to court because the FCC has sole discretion over whether the emissions of an electronic device are safe, a right unquestioned by any current court cases or pending federal legislation."
Young Americans embrace socialism, even among Miami Cubans -ABC News
"Andy Vila's mother remembers her son as a bright, rebellious child who enjoyed Harry Potter books and dressing up as the U.S. president. But when he began to embrace the same ideology his family had fled in socialist Cuba, she pleaded in vain for him to stop his political activism. At 21, Vila is part of a wave of young Americans openly supporting socialism, even among Miami's staunchly anti-left Cubans. Although the definition of the ideology varies widely, it is making particular inroads among millennials and Generation Z voters, who are expected to make up 37% of the 2020 U.S. electorate, according to the Pew Research Center. While more than half of Americans rejected socialism in a recent Gallup poll, 43% surveyed said some version of it would be good for the country. That sentiment was held by 58% of respondents ages 18 to 34, compared with just 36% of those 55 and older....Americans who came of age during the last recession often embrace a larger government role in social policy. They cite stagnant wages, student loan debt and a decrease in employer-sponsored health insurance and pensions, according to University of California-Irvine political sociologist Edwin Amenta. Younger Americans are less threatened by socialism than older generations, who might associate it with Soviet or Chinese rule, he said. 'Today's socialism for younger people means the Canadian health system and the Swedish welfare state,' Amenta said."
8.26.19 - Gold Breaches $1,550 amid Trade Jitters
Gold last traded at $1,537 an ounce. Silver at $17.64 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on China trade jitters despite a firmer dollar. U.S. stocks rose after President Trump announced that China is ready to come back to the negotiating table.
Gold breaches $1,550 mark for first time in over 6 years on trade jitters -Reuters
"Gold prices jumped more than 1% to surpass the $1,550 per ounce mark for the first time in more than six years on Monday as investors flocked to safe haven assets driven by the heightened U.S.-China trade dispute....'This is all about the trade tensions and the related risk of global slowdown or even a global recession that is driving investors to safe-havens,' said Julius Baer analyst Carsten Menke. 'There is doubt in markets about these trade talks, so benefit of doubt or the leap of faith is not provided by financial markets anymore when it comes to the trade topic, which will be supportive for gold.' Washington announced last week an additional duty on $550 billion in targeted Chinese goods, hours after China had unveiled retaliatory tariffs on $75 billion worth of U.S. products. However, U.S. President Donald Trump on Monday said China had contacted Washington overnight to say it wanted to return to the negotiating table....Meanwhile, Federal Reserve Chairman Jerome Powell on Friday said the U.S. central bank will “act as appropriate” to keep the economy healthy, although he stopped short of committing to rapid-fire rate cuts. The markets are fully priced for a quarter-point cut in rates next month, and over 100 basis points of easing by the end of next year."
Democrats rooting for recession -Moore/Washington Times
"Last week I gave a talk to high-wealth investors in San Francisco - not exactly an audience of left-wing activists - and people kept asking me the question of the day: 'Will there be a recession?' My reply: I would never say never, but I don't see a recession in 2020...Many people frowned. One woman shouted at me: 'I want a recession so we can get rid of Trump.' I said to her as nicely as possible that even if you don't like the president, you don't want to root against America. Do you really want millions of people to lose their jobs? Do you really want people to earn less money? That doesn't sound very patriotic or compassionate. The woman crossed her arms and scoffed. Now I get it that San Fran is the epicenter of Anti-Trump Derangement Syndrome and so maybe I shouldn't have been surprised. But now we see Democratic leaders and the 'unbiased' media openly rooting for a recession. The drumbeat for an economic contraction has been nonstop for the last two weeks. All of this negativity has made Democrats appear to be so bloodthirsty for power that they want American workers to suffer so they can reclaim the crown."
Monetary Policy Won't Solve the Next Financial Crisis -Bonner/Bonner And Partners
"We offer another bold prediction. Before 2030, U.S. deficits will hit $2 trillion per year and total federal debt will go over $40 trillion. Here's why. Sometime in the months ahead, a stock market crash and a recession are inevitable. This will not be met with grace and courage, but will cause an unseemly panic on both ends of the Washington-Wall Street corridor. Faced with the third debt crisis of the century, the feds will follow the script of the previous two. But in 2001 and in 2008, the Fed had at least 500 basis points (5%) it could trim from its key lending rate. This next time, it will be lucky to have 100 basis points. Remember, when you are in a funny-money debt trap, you only have two choices: you add more funny money… or the fake boom dies....The Fed will print the money. Congress will spend it. Deficits will double. And debt will expand to more than $40 trillion....U.S. stocks are up 26 times since 1980… and now, corporations spend 100% of their free cash flow buying their own shares. All of this cheap, fake money has practically obliterated the two things capitalism most needs: real savings (aka capital)… and honest prices. And so, the hounds of Hell run wild - greed, corruption, lies, and claptrap. And if there is any real capital or integrity left, surely it is in hiding."
Americans Have Shifted Dramatically on What Values Matter Most -Wall Street Journal
"The values that Americans say define the national character are changing, as younger generations rate patriotism, religion and having children as less important to them than did young people two decades ago, a new Wall Street Journal/NBC News survey finds. The poll is the latest sign of difficulties the 2020 presidential candidates will likely face in crafting a unifying message for a country divided over personal principles and views of an increasingly diverse society. Some 61% in the new survey cited patriotism as very important to them, down 9 percentage points from 1998, while 50% cited religion, down 12 points. Some 43% placed a high value on having children, down 16 points from 1998. Views varied sharply by age. Among people 55 and older, for example, nearly 80% said patriotism was very important, compared with 42% of those ages 18-38 - the millennial generation and older members of Gen-Z. Two-thirds of the older group cited religion as very important, compared with fewer than one-third of the younger group. 'There's an emerging America where issues like children, religion and patriotism are far less important. And in America, it's the emerging generation that calls the shots about where the country is headed,' said Republican pollster Bill McInturff, who conducted the survey with Democratic pollster Jeff Horwitt....Generational differences on personal values were most pronounced among Democrats. In fact, the views of Democrats over age 50 were more in line with those of younger Republicans than with younger members of their own party."
8.23.19 - Central Banks Purchasing Record Gold. Why?
Gold last traded at $1,537 an ounce. Silver at $17.44 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Friday on China trade war fears. U.S. stocks fell sharply after President Donald Trump ordered U.S. companies, through a series of tweets, to find alternatives to their operations in China.
The Fed can’t rescue us from the coming supply-shock recession -Roubini/Marketwatch
"There are three negative supply shocks that could trigger a global recession by 2020. All of them reflect political factors affecting international relations, two involve China, and the United States is at the center of each. Moreover, none of them is amenable to the traditional tools of countercyclical macroeconomic policy. The first potential shock stems from the Sino-American trade and currency war, which escalated earlier this month when President Donald Trump's administration threatened additional tariffs on Chinese exports, and formally labeled China a currency manipulator. The second concerns the slow-brewing cold war between the U.S. and China over technology...China and America are vying for dominance over the industries of the future: artificial intelligence (AI), robotics, 5G, and so forth. The third major risk concerns oil supplies...Should America's confrontation with Iran escalate into a military conflict, global oil prices could spike and bring on a recession, as happened during previous Middle East conflagrations in 1973, 1979, and 1990. All three of these potential shocks would have a stagflationary effect, increasing the price of imported consumer goods, intermediate inputs, technological components, and energy, while reducing output by disrupting global supply chains."
Central Banks Are Purchasing Gold at Record Highs. Why? -FEE.org
"An unprecedented shift toward gold has been led by the financial authorities of the world in what appears to be a move away from the US dollar. The World Gold Council reported that central banks bought a historic high of 374.1 tons of gold this year. While this move accounts for only 16 percent of total gold demand, it offers an inside look into the minds of the central bankers. The history of money has featured coins made from precious metals, privately issued IOUs that could be redeemed for precious metals, and government-issued IOUs that could similarly be redeemed for precious metals. It was only relatively recently that fiat money came into use....In the Cato Journal, Lawrence White explores how the world might transition to a new gold standard. He notes two possible paths. First, a parallel gold standard could be allowed to grow alongside the current fiat currency. Alternatively, there could be a transition date in which a currency is then defined as some amount of gold....In the case of the US-China trade war, China could use gold holdings to dump the dollar. If so, the US would incur a cost much higher than the revenue from tariffs levied on Chinese businesses and American citizens....Whether recent gold accumulation is merely a demonstration of political weight to leverage trade policy, a hedge against market turbulence, or a move toward a new gold standard is yet to be seen."
From Poor Man's Gold To Rich Man's Gold -Seeking Alpha
"'Although gold and silver are not by nature money, money is by nature gold and silver.' -Karl Marx- Precious metals are said to provide low to negative correlation with stocks and bonds. Amidst the current volatility, demand for precious metals is picking up with gold reaching six-year highs. However, its poor man's counterpart also has started picking up momentum and has generated higher returns, compared to gold. (Silver is up 18.5% while gold is up 17% over the last 3 months) Silver has been characterized as poor man's gold due to its affordability by low-income investors and its underperformance when compared with gold. While an investment of $1,500 is required to buy 1 oz of gold, 1 oz of silver can be purchased for merely $17.10. Even though silver is relatively inexpensive when compared to gold, it does not suggest that the metal is not worth investing. Silver has varied industrial uses and can be found in a wide variety of products from iPads to solar panels and cars. Strategic investments in silver can lead to attractive returns. One of the most-watched buy indicators for silver has been the gold-silver ratio. Gold is believed to be 15 times rarer than its cousin silver. As such, when the gold-silver ratio approaches new highs, it's a buy signal for silver because the imbalance would correct eventually, leading to substantial gains for silver investors. The gold-silver ratio has reached new levels, which were not seen since the past two decades. In the past, when the ratio has been at historic highs, the decline was steep, which made investments in silver profitable."
Learn more about the new silver rush in Swiss America's free 2019 Silver Report.
Fake News Can Lead to False Memories -Psychological Science
"Voters may form false memories after seeing fabricated news stories, especially if those stories align with their political beliefs, according to research in Psychological Science. The research was conducted in the week preceding the 2018 referendum on legalizing abortion in Ireland, but the researchers suggest that fake news is likely to have similar effects in other political contexts, including the US presidential race in 2020. 'In highly emotional, partisan political contests, such as the 2020 US Presidential election, voters may 'remember' entirely fabricated news stories,' says lead author Gillian Murphy of University College Cork. 'In particular, they are likely to 'remember' scandals that reflect poorly on the opposing candidate.' The study is novel because it examines misinformation and false memories in relation to a real-world referendum, Murphy explains. She and her colleagues, including APS Past President Elizabeth Loftus of the University of California, Irvine, recruited 3,140 eligible voters online and asked them whether and how they planned to vote in the referendum. Next, the experimenters presented each participant with six news reports, two of which were made-up stories that depicted campaigners on either side of the issue engaging in illegal or inflammatory behavior. After reading each story, participants were asked if they had heard about the event depicted in the story previously; if so, they reported whether they had specific memories about it....Nearly half of the respondents reported a memory for at least one of the made-up events; many of them recalled rich details about a fabricated news story. 'People will act on their fake memories, and it is often hard to convince them that fake news is fake,' Loftus says. 'With the growing ability to make news incredibly convincing, how are we going to help people avoid being misled?'"
8.22.19 - Is $2,000 Gold On The Horizon?
Gold last traded at $1,508 an ounce. Silver at $17.04 an ounce.
NEWS SUMMARY: Precious metal prices steadied Thursday ahead of Fed comments to be made in Jackson Hole, WY. U.S. stocks traded mixed as investors wondered whether the Federal Reserve will cut interest rates next month.
Is $2,000 Gold On The Horizon? -Yahoo Finance
"The trade war between the United States and China has taken a turn for the worst... Energy stocks are down, manufacturing is taking a beating, even the almighty FAANG stocks are reeling. And it's going to get much worse before it gets better. That's why investors are scrambling back into safe haven assets. And why gold has barreled past the $1,500 mark for the first time in nearly 7 years. This summer's gold rush has made the now extra-precious metal's gains for this year more than 18 percent. That's better than the S&P 500! It would be difficult to find a market more bullish than gold right now. Some are even saying that $2,000/oz gold may be on the horizon. The market for gold has never been hotter, and there has rarely been such good reason to begin buying in."
The upside-down economy: Banks want the rich to pay to deposit money -Washington Post
"The typical banking relationship looks something like this: Banks pay interest to depositors. Then they use that cash to issue loans and charge borrowers a fee, pocketing the difference. But in some parts of the world, that relationship has been turned on its head. Banks in Denmark and Switzerland recently announced new fees for wealthy clients with a lot of cash. Instead of earning interest, those savers will pay the banks for holding their deposits. The shift toward negative interest rates in some parts of Europe comes as central banks step up efforts to spark stagnant economies. Nations that are in or near a recession are pushing rates down in the hopes it will encourage people to borrow and spend more. In some countries, including Japan, yields have been pushed so low that they are now in negative territory....'Conditions in money and capital markets remain very challenging,' UBS said in a statement. 'We assume that this period of low interest rates will last even longer and that banks will continue to have to pay negative interest rates on customer deposits at central banks.' Some economists say negative bond yields could have unintended downsides. For example, some banks that are hesitant to charge savers for deposits because they don't want to drive away customers might try to make up costs by increasing the rate they charge on loans, says Ben May, director of global macro research for Oxford Economics. In other cases, consumers spooked by negative interest rates may become more cautious and boost savings instead of spending more, he said."
Germany Sells World's First 30-Year Negative Yielding Bond... And It's A Failure -Zero Hedge
"On Wednesday morning, with its entire yield curve below zero and the yield on the 30Y auction assured to be negative, a reflection of dwindling expectations for inflation and growth over the coming years and ahead of the ECB's relaunch of QE next month - Germany was hoping to sell some €2 billion in bonds maturing 2050. However, with bond yields rising sharply into the auction, with the yield on the German 30Y rising from -0.18% to as high as -0.10%, demand suddenly slumped. And so, when the dust settled, it turned out that Germany had managed to sell just €824 million of the total €2 billion target at a record low yield of -0.11%, with the Bundesbank forced to retain almost two-thirds of the entire issue as demand plunged. In other words, this was a failed auction....'It is technically a failed auction,' said Jens Peter Sorensen, chief analyst at Danske Bank AS....Worse, it means that a disconnect may be forming between the primary (auction) and secondary market, where foreign investors are willing to send yields to record lows in the open market but stay quiet at auction, resulting in a potential air pocket between market and auction prices. As Bloomberg adds, Commerzbank AG had expected demand to come from life insurers and macro investors before the sale. It failed to materialize."
Ransomware Attacks Cripple Cities Across America -New York Times
"More than 40 municipalities have been the victims of cyberattacks this year, from major cities such as Baltimore, Albany and Laredo, Tex., to smaller towns including Lake City, Fla. Lake City is one of the few cities to have paid a ransom demand - about $460,000 in Bitcoin, a cryptocurrency - because it thought reconstructing its systems would be even more costly. In most ransomware cases, the identities and whereabouts of culprits are cloaked by clever digital diversions. Intelligence officials, using data collected by the National Security Agency and others in an effort to identify the sources of the hacking, say many have come from Eastern Europe, Iran and, in some cases, the United States....Beyond the disruptions at local city halls and public libraries, the attacks have serious consequences, with recovery costing millions of dollars. And even when the information is again accessible and the networks restored, there is a loss of confidence in the integrity of systems that handle basic services like water, power, emergency communications and vote counting. 'The business model for the ransomware operators for the past several years has proved to be successful,' said Chris Krebs, the director of the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency....According to government and private experts, the ransomware business is now proving so lucrative that the hackers are pouring some of their profits back into their own research and development, making their attacks more precise, and more wily."
8.21.19 - Recession by 2021 Say 74% Economists
Gold last traded at $1,512 an ounce. Silver at $17.11 an ounce.
NEWS SUMMARY: Precious metal prices steadied Wednesday ahead of Fed minutes. U.S. stocks rose as strong quarterly results from retailers such as Target and Lowe's lifted investor sentiment.
Gold Rally To Continue -Forbes
"Gold is likely to move higher for three reasons. 1. Seasonally, the strong months are ahead, this August and September. This is a static cycle and is not a complete picture without the dynamic cycles. 2. The weekly and the monthly dynamic cycles have both bottomed. 3. The breakout in the monthly graph projects $1650 or higher as a price target by September at the latest. Here are interesting and bullish fundamental developments. The state of Nevada has developed legislation that will allow the issue of gold-denominated bonds, paying interest and principal in gold. Nevada will exchange these bonds for their outstanding conventional bonds. This appears to be a small step toward monetizing the metal. There is another constructive fundamental development. Bond markets offer minimal or negative returns, and there are signs of corporate stress as recession develops. Strains in the financial system appear to be increasing. I think that this is diverting funds from paper assets into the gold market."
Negative Interest Rates Are Not Normal -Bonner/Bonner And Partners
"Every week, we reach new heights of weirdness: the worldwide total of debt trading at negative interest rates rose to $17 trillion...nearly 15% of S&P 500 companies no longer earn enough money to even cover the interest on their loans...the yield on U.S. 30-year bonds fell below 2% - lower than the yield on 30-day Treasury bills...and Danish banks are offering fixed-rate mortgages at zero interest over 20 years...But the human mind is nothing if not gullible and credulous. The weirder things get, the more people struggle to think they aren't weird at all....Banks used to give customers free toaster ovens for opening up new accounts. Now, at least in Denmark, they give them free houses....Joe Weisenthal argues in Bloomberg that negative rates are perfectly normal: 'If you want to hold gold and watches and sentimental things at a bank, you pay to rent a safe deposit box...there's lots of money out there and a limited capacity to store it all. So increasingly, savers are going to have to pay for money storage services.' Who is this guy, we wondered? Is he allowed out in public? A naif? A mental defective? If you want someone to store your Corvette, you will have to pay him for it. The warehouse renders you a service. You pay. But if you lend someone your Corvette, for him to use, it would make no sense at all for you to pay him. He should pay you....In a capitalist economy, heirlooms are stored, but capital is lent out… so that it can be fructified by entrepreneurs and businesses. The lender knows he may never see his money again; he deserves to be compensated for the risk."
Surge in corporate debt with negative yields poses risk 'unlike anything' investors have ever seen -CNBC
"Government bonds aren't the only instruments producing negative yields these days, with corporate debt recently passing the $1 trillion mark in a continuing sign of global financial displacement. Investors these days are facing huge amounts of fixed income instruments that carry no yield. Various estimates of sovereign debt in that category put the total in excess of $15 trillion, a number that has been escalating over the past several years while central banks drive interest rates to zero and below. Negative-yielding corporate debt, though, is a relatively new thing, rising from just $20 billion in January to pass the $1 trillion mark recently, according to Jim Bianco, founder of Bianco Research....'The interest rate risk that these bonds carry is huge,' Bianco said in a recent interview. 'The financial system doesn't work with negative rates. If the economy recovers, the losses that investors would take are unlike anything they've ever seen.' Former Fed Chairman Alan Greenspan recently jolted some investors when he said there was nothing actually standing in the way of negative U.S. rates."
74% of economists in survey see US recession by end of 2021 -Associated Press
"A strong majority, 74%, of U.S. business economists...expect a recession in the U.S. by the end of 2021. The economists surveyed by the National Association for Business Economics, in a report released Monday, mostly didn't share President Trump's optimistic outlook for the economy, though they generally saw recession coming later than they did in a survey taken in February. Thirty-four percent of the economists surveyed said they believe a slowing economy will tip into recession in 2021. That's up from 25% in the February survey. An additional 38% of those polled predicted that recession will occur next year, down slightly from 42% in February. Another 2% of those polled expect a recession to begin this year. In February, 77% of the economists expected a recession either this year, next year or in 2021....The 226 economists responding work mainly for corporations and trade associations."
8.20.19 - "Gold's Going Up, Up, Up"
Gold last traded at $1,514 an ounce. Silver at $17.13 an ounce.
NEWS SUMMARY: Precious metals prices rose Tuesday on bargain-hunting and a weaker dollar. U.S. stocks slipped as investors digested the sustainability of a rebound from last week's sharp sell-off.
Billionaire Hedge Fund Owner Mark Mobius Says Gold Is Going Up, Up, Up -Kitco
"Gold’s drop from last week's six-year high is attracting some bargain hunters, but one hedge fund manager is advising investors to ignore the price and buy the precious metal at any level. In an interview with Bloomberg TV Tuesday, veteran investor Mark Mobius, who created Mobius Capital Partners LLP last year, reaffirmed his bullish outlook for the yellow metal. 'Gold's long-term prospect is up, up and up, and the reason why I say that is money supply is up, up and up,' he said. 'I think you have to be buying at any level, frankly.' Mobius also reiterated his recommendation that investors should hold about 10% of physical gold in their portfolios....In an environment of global monetary easing, Mobius said that there will be a strong demand for hard assets, which he expects will leave cryptocurrencies out in the cold."
Trump Calls for a Big Fed Rate Cut, Again Criticizes Central Bank Chairman -Wall Street Journal
"President Trump on Monday called for the Federal Reserve to sharply cut interest rates and again criticized the central bank's chairman for a 'horrendous lack of vision,' while reiterating his belief that the U.S. economy is strong. The president said in a pair of tweets Monday morning that the Fed should cut its benchmark interest rate by at least a full percentage point and resume its crisis-era program of buying bonds to lower long-term borrowing costs. Such moves would typically be considered only when the economy faces serious peril, which Fed officials don't believe to be the case....White House aides said Monday they are examining other proposals to bolster the economy. Among the ideas being discussed is a cut in the payroll tax....If the Fed cut its benchmark rate by at least a percentage point and perhaps launched a new bond-buying program, the president tweeted, 'our Economy would be even better, and the World Economy would be greatly and quickly enhanced.'....Interest-rate futures are pricing in a 95% chance that the Fed will reduce rates by a quarter percentage point at its Sept. 17-18 meeting."
Think of this economy as an elderly friend: Old age means coming death -The Hill
"I'm teaching macroeconomics to MBA students this summer and thinking about asking this question on the final: 'We set a record in July. The U.S. economy has now gone longer without experiencing a recession - 121 months - than in any other time in modern history. This means: a) We've learned our lesson and have solved the problem of business cycles. There will never be another recession. b) We're overdue for another recession. People should expect one soon.'...There are lots of wrong answers, and both of these options are just wrong....Sooner or later, there is another recession. Nothing has happened in the past 10 years to change that....No one knows when it will happen. But the accumulation of debt, along with lots of bad stuff that’s happened - higher tariffs and all the rest - have left the economy more vulnerable to failure than it was a few years ago. You should think about this economy the way we are thinking about an elderly friend. We're all looking forward to the big party on his 100th birthday. But we're keeping our dark suits cleaned and pressed."
The Bond Market's All-In On Its Recession Forecast -Capital Spectator
"Mounting recession worries of late have taken a bite out of stocks, but heightened fears that an economic contraction may be near has lit a fire of buying for US bonds. Long bonds in particular have soared recently....The source of the bond market's striking gains: elevated recession fears. Right or wrong, the crowd has piled into Treasuries and investment-grade credits on the assumption that the US economy is caught in downward spiral....'The bond market is screaming recession,' says Andrew Brenner, head of international fixed income National Alliance. 'Just take a look at what the US market is doing.' Suffice to say, the fixed-income crew is all-in on expecting that the US economy will begin contracting soon, courtesy of the implied forecast via inverted yield curves."
8.19.19- Silver Could Move Shockingly Higher
Gold last traded at $1,507 an ounce. Silver at $16.91 an ounce.
NEWS SUMMARY: Precious metal prices drifted lower on short-term profit-taking. U.S stocks rose as Treasury yields rebounded and the U.S. agreed to extend a temporary reprieve to Chinese telecom giant Huawei.
Silver Will Soon Move Suddenly & Shockingly Higher - Here's Why -Munknee
"I am convinced that silver will soon explode in price in a manner of unprecedented proportions, both in terms of previous silver rallies and relative to all other commodities. By unprecedented, I mean that the price of silver will move suddenly and shockingly higher in a manner never witnessed previously, including the great price run ups in 1980 and 2011. The highest prior price level of $50 will quickly be exceeded....It will be a price move like no other. It will be the greatest short covering rally in history. For more than 30 years, COMEX silver futures have had the largest short position of any commodity in terms of real world production and inventories....No longer is the largest COMEX silver short subject to extreme financial damage should silver prices explode. Instead, JPMorgan has pulled off the accumulation of the largest silver hoard in world history on declining prices. The bank has never been better positioned for a silver price explosion....When silver prices rise sufficiently, the remaining shorts will panic and begin to try to cover their short positions. This buying will send silver prices skyward and then touch off all sorts of other buying, including investment buying and then industrial user buying, perhaps the most potent buying of all....On a rally where silver prices jump to $20 or $30, it would not be unreasonable to imagine $2 to $3 billion of investment demand coming from investors excited by rising prices."
Markets Are In A Panic, And This Time There Will Be No Happy Ending -Gave/Zero Hedge
"I always try to be a rules-driven investor. And when the US stock market is down -3% in a day, taking it to -6% from its peak in three weeks, when 10-year US treasury yields have halved in nine months to just 1.55%, and when gold is up 20% in three months, it is a good time to review those rules to see what they can tell me. The answer is: quite a lot....Since May 2019, when the treasury total return/gold ratio fell below its five-year moving average, I have been recommending that investors switch from overvalued bonds to gold as the preferred hedge for their equity exposure. Usually, these two assets - long-dated US treasuries and gold - tend to be negatively correlated. When treasuries are going up, gold tends to go down, and vice versa. But in the last few months, both have powered ahead at the same time. This left me scratching my head, and as usual when puzzled, I reached for the history books to see when in the past both treasuries and gold have looked overbought at the same time...The conclusion is striking: we are in a panic....So what should investors do? My immediate advice would be to do very little right now. Acting in the middle of a panic is seldom a good idea....Concentrate equity holdings in high quality stocks relatively immune from the vagaries of governments, and hedge them with gold."
How a Recession Could Hit This Year -New York Times
"The chances that the U.S. will fall into recession have increased sharply in the last two weeks. Here's how it could happen, according to Neil Irwin of The Upshot: 'The trade wars and a breakdown in international economic diplomacy cause businesses around the world to pull back. This leads to further tumbles in markets and job losses, prompting American consumers to become more cautious. High corporate debt loads create a wave of bankruptcies. And central bank policy proves impotent, combined with fiscal policy that is nonexistent.' And what would it look like on the ground? Besides the hardships for businesses and individuals, Ross Douthat of the NYT makes a few predictions in his latest column: 'President Trump could lose re-election, as he would be unlikely to muster enough votes if his boom evaporates. Venture-capital funding could start to dry up, which might make business like Uber and WeWork unsustainable. The immigration crisis could diminish, as the U.S. becomes less attractive to those in other countries, while domestic social problems like suicide rates and drug overdoses could get worse.'"
Trump and the Greenland New Deal -Ponte/WND
"Days ago the Wall Street Journal reported that, 'with varying degrees of seriousness,' President Donald Trump has 'repeatedly expressed interest' in buying from Denmark the world's largest island, Greenland. Likewise, the 'future of the Democratic Party,' socialist Congresswoman Alexandria Ocasio-Cortez, recently proposed a 'Green New Deal' that would save the world from global warming by outlawing the internal combustion engine; prohibiting airline travel; ending cow flatulence, a major source of greenhouse gases, by banishing the eating of beef; and taxing nearly $100 trillion out of businesses and the wealthy. The Green New Deal was a pretext to use climate fears to transform our economy from capitalist to socialist....Today 80 percent of Greenland's 836,330 square miles is covered with ice, which at its center is almost two miles thick. Only 56,000 settlers remain, and 90 percent are not primarily Vikings but descendants of the native Inuit peoples. Greenland has been owned since 1814 by Denmark, which provides its people an annual subsidy of $591 million, about $10,550 per person. This subsidy sustains a socialist society in which nobody owns private property, with all land controlled by five 'kommunes.'....Alexandria Ocasio-Cortez should love socialist Greenland, far better than the proudly capitalistic, free-enterprise, high-tax welfare state of Denmark itself. But as leftist British newspaper the Guardian admits, Greenland is riven by high unemployment, alcoholism, depression and suicide. So why does President Trump want a socialist island whose head of local government says that Greenland is 'open for business but not for sale'?....Today we recognize that Greenland is rich in resources: zinc, lead, copper, iron ore, coal, diamonds and oil. Canadians are already mining gold there, and Chinese are mining rare-earth elements."
8.16.19 - What's the Deal With Inverted Yield Curve?
Gold last traded at $1,523 an ounce. Silver at $17.12 an ounce.
NEWS SUMMARY: Precious metal prices eased back Friday on short-term profit-taking. U.S. stocks rose as a rebound in bond yields eased some recession fears. The gains closed out a wildly volatile week on Wall Street.
Why gold's 'strong undercurrent' has some analysts eyeing $2,000 an ounce -Yahoo Finance
"Gold has benefited from a spate of supportive factors over the past few months, and some bulls now see the precious metal making a climb to a record high of $2,000 an ounce....'There has been a strong undercurrent of demand for gold,' said Brien Lundin, editor of Gold Newsletter. 'Even as short term factors like the China trade dispute may come and go, longer-term investors are confident that the issues of monetary debasement and other geopolitical factors will continue to impact the market.'....Concerns over a possible recession, sparked by the recent inversion of the yield curve for the 2-year and 10-year Treasury yields, some weak global economic data, and the U.S. Federal Reserve's first interest-rate cut since 2008, have dressed up gold's appeal as a haven. But Stan Bharti, chief executive officer of private merchant bank Forbes & Manhattan, doesn't believe that gold is moving up because of short-term market fears. It's a move that's been a long time coming...He expects gold prices to top $2,000 by the end of next year...More near term, Bharti sees gold jumping from $1,480 to $1,600 in the next quarter."
What's the Deal With That Inverted Yield Curve? -Irwin/New York Times
"The financial world has been atwitter about the inversion of the yield curve. It is a phenomenon in the bond market in which longer-term interest rates fall below shorter-term interest rates, and has historically been a warning sign that a recession could be on the way....Bonds that mature at different times are always trading on global markets, and with some fairly simple math you can figure out what the price of different bonds implies about how interest rates are expected to change over the coming years....If you buy, say, a 90-day Treasury bill, you are likely to receive an interest rate that is closely tied to whatever the Federal Reserve has currently set as its main target for interest rates in the banking system and any changes the Fed might make in the near future. It's like betting on next week's football game: We know a lot about what opponent your team is facing, how well they've been playing, whether there are injuries likely to affect the outcome."
"But if you buy a 10-year Treasury note, you're making a bet on the more distant future. The economy will probably change a lot over the next decade. You can't predict exactly what will happen, but you are betting on the general direction of things: Do you expect the economy to heat up, creating inflation pressures and causing the Fed to raise rates? Or do you expect it cool down? So purchase of a longer-term Treasury bond is like making one of those long-term bets on how a team will perform for many years to come....Longer-term rates below shorter term rates are a clear signal from bond investors that they think the United States economy is on the downswing - that its future looks worse than its present."
Note: As the above chart illustrates, roughly every ten years an inverted yield curve often precedes a economic recession. As we discuss in our Crisis Timeline report, this once-a-decade correction/recession has been consistent over the last 100 years. This explains why every day more and more experts are warning investors to prepare for a major market correction - or even a cyclical market crash. Owning gold is part of that wise preparation.
The U.S. Treasury is about to flood the market with debt to fund a $1 trillion deficit. Here's why that is a worry - MarketWatch
"An anticipated surge of U.S. borrowing in the global debt markets in the second half of this year is starting to create concern as Treasury is expected to ramp up its issuance of bills, notes and bonds to fund a soaring $1 trillion budget deficit....Last month the U.S. Treasury laid out its plans to borrow $814 billion between July and December, after the Trump administration and Congress agreed to a two-year postponement of the U.S. debt ceiling, ensuring no government shutdown or a federal default. Not only does the Treasury needs to borrow to cover the fiscal deficit created by Trump's 2017 tax cuts and the inability of Congress to agree on spending cuts, but Treasury needs to rebuild its cash balance which was run down to pay the governments bills when the debt ceiling was hit in May. The coming deluge of Treasury issuance has stoked worries on Wall Street about whether there is enough liquidity in the system in the short term to meet the supply without pushing up short-term borrowing costs and inverting the yield curve even further. U.S. dollar liquidity is deteriorating and 'is reaching a point where it may require drastic action if measures aren't taken to address it soon,' warned Gaurav Saroliya, director of macro strategy at Oxford Economics, in a note on Wednesday....'We are concerned that the U.S. banking system is nearing reserve scarcity,' Bank of America Merrill Lynch analyst Mark Cabana wrote in a note to clients. Ultimately, he said opening the Treasury 'floodgates' would likely 'force the Fed to start expanding its balance sheet by year-end.'"
Time to review your portfolio -Moneyweek
"More global fund managers now expect a recession than at any time since 2011 (which you'll remember, was a tough year and a time when every other headline was fretting about the solvency of Greece). More global fund managers are bullish on bonds than at any time since 2008 - only 9% of them expect to see higher bond yields in the next 12 months which, given that bond yields are at record low levels in most parts of the world, is quite something. And an overall majority of fund managers expect value stocks to underperform growth over the next 12 months, the most bearish managers have been on value's relative prospects since the financial crisis. All of this data comes from the latest Bank of America Merrill Lynch monthly survey of global asset managers, and more than anything else, it shows one thing - investors are currently positioned for extremes. A key part of the US yield curve has finally inverted, a pretty reliable recession signal....Perhaps the best bet at extremes is to take a chance to review your portfolio (if you haven’t done so in a while). Are there any sectors where you've made a lot of money and feel you are now over-exposed? Do you have enough gold (for insurance) and cash (for quickly jumping on opportunities)? And most importantly - do you have a clear financial plan at all? Because if you don't, the midst of a market panic is not the time to be caught without one."
8.15.19 - Why Gold Prices Are About To Skyrocket
Gold last traded at $1,531 an ounce. Silver at $17.21 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on safe-haven buying despite a firmer dollar. U.S. stocks attempted a rebound from the worst sell-off of the year, as retail giant Walmart rose and positive economic data lifted downbeat investor sentiment.
Why Gold Prices Are About To Skyrocket Even Higher -Yahoo Finance
"The gold bears have finally caved under the deafening barrage of fiscal and geopolitical catalysts, from Fed hints to intensely brewing conflict with Iran. But there is one key trend that stands to push gold up beyond $1,700 - regardless of the day's news....In this perfect storm for gold prices, EuroSun Mining CEO Scott Moore says we're overlooking a significant trend that will outlast the current geopolitical meltdown and even the Fed's policies: It's a global push for de-dollarization. 'Government's around the world are becoming increasingly wary of the dollar's hegemony in international trade,' says Moore. 'And they're doing their best to distance themselves from it by using their gold reserves to buy more gold instead.' This process is already underway mainly in nations with strong anti-U.S. sentiment including Russia, China, Iran, Venezuela, Syria, Turkey, Qatar, India, Pakistan, Libya, Egypt and the Philippines among others....According to the World Gold Council, central banks purchased nearly 70 percent more gold during the first quarter of the year than they did during the previous year's corresponding period. Billionaire Paul Tudor Jones says that gold 'has everything going for it', and sees it pushing to $1,700 an ounce 'rather quickly', as he noted in an interview with Bloomberg."
Ex-Fed boss Greenspan says ‘there is no barrier’ to Treasury yields falling below zero -Marketwatch
"There is some $15 trillion in government debt that now yields less than zero, and former Federal Reserve Chairman Alan Greenspan believes there's no reason why U.S. government bond yields couldn't join much of the developed world in the subzero world. Greenspan, during a phone interview with Bloomberg News on Tuesday, said 'zero' has no real meaning for the U.S. bond market and that a slide below that psychological level, already traversed by many others countries, wouldn't be inconceivable for U.S. paper. The 93-year-old economist's comments come as more Wall Street participants contemplate the very real possibility of negative Treasury rates....Current estimates hold that some $15 trillion in debt bears a negative yield, which means that investors get back less than their original investments for the privilege and perceived safety of owning government-backed debt. The negative-yield dynamic in the market has proliferated after more than a decade of monetary-policy unorthodoxy intended to juice stubbornly low inflation and anemic growth in Europe and parts of Asia....As of late Tuesday, 10-year U.S. benchmark debt was yielding 1.678%, not far from its lowest levels since 2016, with Wall Street anticipating nearly a 100% chance of a 25-basis-point cut in September."
Craig Smith Comment: Zero interest rates means that a currency becomes worthless as an "investment", except to pay bills. Owning gold may be the only way to preserve wealth, maintain buying power and offset currency depreciation. Zero, or negative rates, essentially guarantee a loss - if you invest $100,000, you will get back only $99,000 at a 1% negative rate. Invest the same $100,000 in gold and it holds its value in all currencies. If the U.S. sinks underwater into zero interest rates, investors could find themselves in deep trouble. Now is the time to convert some of your zero-bound dollars into physical gold.
U.S. Mortgage Debt Hits Record, Eclipsing 2008 Peak -Wall Street Journal
"U.S. mortgage debt reached a record in the second quarter, exceeding its 2008 peak as the financial crisis unfolded. Mortgage balances rose by $162 billion in the second quarter to $9.406 trillion, surpassing the high of $9.294 trillion in the third quarter of 2008, the Federal Reserve Bank of New York said Tuesday. Mortgages are the largest component of household debt....Total household debt has been on the rise since mid-2013. It rose by 1.4% from the first quarter to $13.86 trillion, the 20th consecutive quarter of increase....Alongside higher home prices, a factor behind rising mortgage debt balances in the second quarter could be homeowners tapping into home equity for cash when they refinance. Refinancing accounted for about half of new mortgages in the second quarter, according to Guy Cecala, chief executive at Inside Mortgage Finance, an industry research group. That represents a 'mini refinancing boom.'"
Hong Kong Activist Leader Calls For A Run On Chinese Banks Tomorrow -Zero Hedge
"Prominent Hong Kong pro-independence political activist Chen Haotian has called for a run on Chinese banks, asking that everyone withdraw their money on the same day. Haotian is a founding member and the convenor of the Hong Kong National Party. Arguing that large scale protests have only led to injuries and escalating police brutality, Haotian believes another method could be used to severely undermine China's influence - a good old fashioned run on the bank. He suggested that another method could be used, namely, impacting the financial system,' reports China Press. 'He called on Friday (August 16) that Hong Kong citizens take out all bank deposits. The primary goal is Chinese banks, but he said other banks should also be targeted, otherwise Chinese banks can borrow money from other banks to solve problems.' Hong Kong has been rocked by weeks of violent protests by pro-independence campaigners. Earlier this week, riot police stormed Hong Kong International Airport to clear them out...While China is unlikely to invade using PLA troops, experts have suggested that soldiers could be disguised as Hong Kong police."
8.14.19 - 311 Days: Recession Countdown Begins
Gold last traded at $1,527 an ounce. Silver at $17.28 an ounce.
NEWS SUMMARY: Precious metal prices shot up Wednesday on safe-haven buying and recession fears. U.S stocks fell sharply after the U.S. bond market flashed a troubling signal about the U.S. economy.
Gold could hit $2,000 in a world full of negative yields -CNBC
"In a world full of negative yielding debt, hard assets like gold could become even more attractive, and some strategists say a case could be made for a $2,000 per ounce price tag on the precious metal....'We have a long position trade on. We are targeting $1,585,' said Daniel Ghali, commodities strategist at TD Securities. 'We do think gold is on its way higher for the time being...Over the coming years as the likelihood of the unconventional policy becomes more of a reality, I could see a case for gold at $2,000.' Gold has also been firming as the world watches protests in Hong Kong and also the uncertainty around U.S., China trade relations. TD Securities strategists believe the many years of unconventional and easy monetary policy from the world's central banks has resulted in a shortage of 'safe assets'...'Negative yields are symptomatic for the search for safe assets. The reason they're trading at negative yields is because the demand for safe assets is bigger than the supply for them,' said Ghali. 'Gold stands to benefit quite a bit from that...I would argue we are likely on the cusp of a multi-year bull market for gold.'"
Recession Countdown Begins: Treasury Yield Curve Inverts For First Time In 12 Years; 30Y Yield Drops To All Time Low -Zero Hedge
"While many have noted the inversion of the 3m-10Y segment of the US Treasury curve, mainstream investors appear more focused on the spread between 2Y and 10Y yields... and that has just inverted for the first time since May 2007...The strongest recessionary signal yet, and equity markets appear to be waking up what this all means....As Jim Grant noted recently, the spread between the 10-year and three-month yields is an important indicator...On six occasions over the past 50 years when the three-month yield exceeded that of the 10-year, economic recession invariably followed, commencing an average of 311 days after the initial signal....The biggest recession risk today centers around the trade dispute between the US and China. Trade disputes have the potential to be very disruptive and contractionary and can operate through a number of channels, such as trade volumes and production, currencies and prices and asset markets. The biggest vulnerability for the US is the equity channel since the market value of equities relative to income and GDP is at record highs, providing consumers with vast sums of liquidity and wealth. If the imposition of new tariffs and the uncertainty over what may follow triggers a de-risking and rush to exit, sparking a sustained 25% to 30% correction in the equity market, that by itself could trigger a recession as it would deal a substantial blow to consumer liquidity and wealth, and an abrupt and sharp decline in spending and confidence."
What Hong Kong unrest tells us about China's plans for the rest of the world -Carafano/Fox News
"The outside world can do little to assure the future of freedom in Hong Kong beyond making the case that preserving the principles of liberty are at stake. Nevertheless, the plight of that territory's more than 7 million souls can teach us an important lesson about what China has in mind for the rest of the world. It is not good. For starters, the continuing protests speak volumes about China's commitment to 'one country two systems.' When the British transferred sovereignty over Hong Kong to China in 1997, Beijing agreed to this arrangement. The Hong Kong system - one of great economic freedom - has produced tremendous economic success. But economic freedom is no more popular than political freedom among the Chinese Communist Party. And in recent years, Chinese authorities have been encroaching on the rights supposedly guaranteed to Hong Kongers...Matters came to a head this April, when the Hong Kong government, under heavy pressure from Beijing, introduced legislation that would allow people accused of crimes against mainland China to be extradited. The proposal set off alarms among residents who know well that the mainland's thoroughly politicized legal system is not to be trusted. Fear that Beijing would quickly weaponize the proposed law to target democracy activists and journalists sparked massive protests. Efforts to suppress the demonstrations have only ignited more public demonstrations....Nothing reflects the contemptuous attitude of the Chinese more than its prosperous propaganda claim that the Hong Kong demonstrations were engineered by the CIA. China is acting like a global bully. Like most bullies, it will continue to do so - until the world stops tolerating Beijing's intolerable behavior. Hong Kong is a warning to the world. The world ought to take notice."
Bankruptcy filings rising across the country and it could get worse -New York Post
"Bankruptcies are back - flashing warnings that more Americans are knee-deep in debt in big cities like New York....New York state's bankruptcy filings, for instance, have risen steadily the past three years, hitting 34,711 in 2018, up from 30,112 in 2016, according to the American Bankruptcy Institute (ABI), based on data from Epiq Systems. More consumers nationwide are falling behind on their payments and filing for bankruptcy to resolve overwhelming debt loads. And low unemployment, an uptick in average wages and the latest Fed interest rate cut have not restrained the debt monster. Some cash-strapped consumers are even finding relief at food pantries....And unmanageable debt is also forcing more companies to file for bankruptcy, triggering a wave of job cuts - with nearly 43,000 job losses announced in the first seven months of this year, according to a new report by Challenger, Gray & Christmas. It's almost 20 percent more than all bankruptcy-linked job cuts in 2018. In the latest example, last week Barneys New York said it had filed for Chapter 11 bankruptcy protection. Meanwhile, record American household debt, near $14 trillion including mortgages and student loans, is some $1 trillion higher than during the Great Recession of 2008. Credit card debt of $1 trillion also exceeds the 2008 peak. Americans are spending heavily, again - and often recklessly, say analysts. 'No question about the fact that credit quality is declining,' said Dick Bove, a financial strategist at Odeon Capital Group in New York."
8.13.19- Hedge Funds Are "All-In" On Gold Rush
Gold last traded at $1,514 an ounce. Silver at $16.98 an ounce.
NEWS SUMMARY: Precious metal prices eased slightly on upbeat China news and a firmer dollar. U.S. stocks whipsawed higher, as a relief rally, after the U.S. said it was delaying China tariffs until December on items including cellphones and clothing.
Trump just blinked, giving China a possible edge in trade war -CNBC
"In backing off on tariffs Tuesday, President Donald Trump showed just how much pain the U.S. could tolerate, key voices on Wall Street say - and China may use that to its advantage. Markets rallied on the the U.S. announcement that certain items were being removed from the new China tariff list, while tariffs on others would be delayed until December....Some investors took Tuesday's announcement as a sign that the trade war was indeed hurting consumers. The products in the group exempt from tariffs include cell phones, some apparel, and video games - all of which are crucial to the U.S. consumer market. China meanwhile, has not publicly backed off. It announced last week that it would stop buying U.S. agricultural products as its latest weapon in the tariff battle and has retaliated with its own tariffs on U.S. goods. It also set off more worries about the trade war on Friday by letting its currency weaken....'The White House is now delaying the tariffs and removing some items. Did some acronym called the SPX cause someone to blink?,' David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, said in a tweet."
Gold Tells Us the Stock Market's True Condition -Bonner/Bonner And Partners
"Savvy traders are front-running the world's central banks. The gamblers know the score - Inflate or Die. They know central banks are preparing for more rate cuts. So they buy $15 trillion worth of bonds traded at negative yields… We reach for something more solid... something we can hold on to. Since January 2000, almost everything in the financial world has been queered by central bankers. The whole bull market - 2009-2019 - for example, was false… phony… a fake-out by central banks. Yes, stock prices rose impressively in dollar terms. But in real-money terms - gold - the bull market of the last 10 years looks like an average bear market bounce. In gold terms, the Dow merely retraced half of its losses. You could buy the Dow with 40 ounces of gold in January 2000. By January 2011, the Dow 30 stocks would cost you only 8 ounces. In other words, stock investors had lost 80% of their money. Then, in the following run-up - fueled by extravagant and nutty efforts to inflate asset prices - the Dow-to-Gold ratio rose to 22. At that point, stock market investors had recovered about half of what they lost – a classic bear market bounce. The feds can fool some of the people some of the time, and they can fool stock market investors almost all the time. But they can't fool gold. Gold is real money....Over time, it faithfully records what things are worth. And right now, it's telling us that the stock market is worth less than half of what it was worth 20 years ago. We will pause to let you absorb that info-grenade."
Hedge Funds "All-In" On Gold As Fiat 'Race To The Bottom' Accelerates -Zero Hedge
"Gold is having its best year since 2016, soaring over 17% year-to-date, outpacing stocks, bonds, and the dollar. And Gold is strong and getting stronger. 'We're now going from trade wars almost into currency wars,' said Whitney George, president of Sprott Inc., a precious metals-focused fund. 'Gold is a currency, but it's nobody's obligation, so it will stand tallest when everyone else is trying to debase their currency to be competitive globally.' Analysts are jumping on the bullion bull market bandwagon: Goldman has a six-month gold forecast of $1,600; Citi has said it will rise to the same $1600 level in 6 to 12 months; and, Bank of America Merrill Lynch sees prices climbing toward $2,000 within two years, topping the all-time record of $1,921.17 reached in the spot market in 2011....But its not just analysts that are piling in. Large speculators' net positioning in gold is near record highs and silver positioning is also soaring. In other words, specs are largely all-in, and as the world shifts to an easing cycle, this sets the scene for more bullish gold pressure as negative-yielding global debt levels will inevitably rise."
Right, left and 2 recent shooters -Ponte/WND
"Headline-seeking Democrat politicians and their comrades in the liberal-left media have unanimously and incessantly blamed President Donald Trump for recent shooter killings in El Paso, Texas, and Dayton, Ohio. The president, they claim, triggered both atrocities by being a 'racist', a 'white supremacist.' Political and media demagogues, however, give few details about the Dayton shooter, now-deceased 24-year-old Connor Betts. As investigators put together the puzzle pieces of his writings and statements, Betts appears to have been a far-left radical, some days calling himself a Socialist and others a Communist. The Dayton shooter was also an enthusiastic backer of both Socialist Senator Bernie Sanders (I-Vermont) and Senator Elizabeth Warren (D-Massachusetts). President Trump is being blamed for the 'right wing' shooter in El Paso. Why, asks American Thinker pundit Monica Showalter, do we not likewise blame Elizabeth Warren for the 'left wing' shooter in Dayton?....I believe...that the El Paso shooter was also a leftist, not a rightist. The shooter, Patrick Wood Crusius, 21, is certainly a racist who says that he concentrated his gunfire on 'Mexicans,' whom he saw as 'invaders.' But racism is not a 'right-wing' ideology. American conservatism believes in rugged individualism, in the unique worth of each person, regardless of race or other characteristics. Leftist ideology is collectivist, not individualist....Both racism and radical environmentalism are collectivist ideologies embraced by the left....Before the Enlightenment and American Revolution, feudal collectivist thinking ruled Europe and its colonies. As Nobel laureate economist Friedrich Hayek explains in 'The Road to Serfdom' the reactionary ideologies of Socialism, Marxism, Nazism, and Fascism are trying to return us to feudalism. The only truly 'progressive' idea remains free minds and free markets."
8.12.19- China Scoops Up More Gold for Reserves
Gold last traded at $1,517 an ounce. Silver at $17.07 an ounce.
NEWS SUMMARY: Precious metals prices rose Monday on geopolitical worry and safe-haven buying. U.S. stocks fell as the intensified Hong Kong protests soured investor sentiment already aggravated by the trade dispute between Washington and Beijing.
Hong Kong Protests Show 'First Signs of Terrorism' -Wall Street Journal
"Chinese authorities condemned violent weekend demonstrations in Hong Kong as 'deranged' acts that marked the emergence of 'the first signs of terrorism' in the semiautonomous city, vowing a merciless crackdown on the perpetrators. The escalating rhetoric from Beijing followed a day of heated protests in Hong Kong, including the hurling of petrol bombs, and came as thousands of protesters gathered at Hong Kong's international airport on Monday, prompting officials to cancel all flights for the rest of the day apart from those already en route to the air-travel hub. 'Radical Hong Kong protesters have repeatedly used extremely dangerous tools to attack police officers,' a spokesman for the Chinese government's Hong Kong and Macau Affairs Office told a news briefing on Monday, according to Chinese state media. 'The first signs of terrorism are starting to appear.' On Sunday, police in riot gear fired tear gas and rubber bullets to disperse crowds of protesters across Hong Kong, some of whom threw bricks and what police identified as Molotov cocktails and smoke bombs....Chinese state media, however, appeared to signal that mainland forces are ready to step in, if necessary."
Big Signals From Gold And Silver -Luongo/Zero Hedge
"Gold and silver are back. The global political picture is spinning out of control quickly. And the precious metals are here to tell us just how quickly....Markets hate chaos...And that's why gold and silver put in weeks to remember....Gold is the peoples' hedge against government run amok. At home we have Trump fighting with the Fed. Trump fighting with China, the EU, Venezuela, Iran, Russia while fending off domestic attacks built on a foundation made of equal parts fear, loathing and basic corruption. Every day more people pull back from this show and ask themselves, 'What should I do now?' That's part of where this energy comes from. It's been building for years. And enough people are saying to them the same thing, 'Buy gold.' And, slowly the worm turns....Chaos, once it's unleashed, is impossible to control. When politicians talk and no one listens what do you think happens next?"
China Scoops Up More Gold for Reserves During Trade War -Bloomberg
"There's a powerful constant amid the to-and-fro of the U.S.-China trade war as currency policy gets dragged into the standoff between the world's two top economies: Beijing wants more gold in its reserves. China’s central bank expanded gold reserves again in July, pressing on with a run that stretches back to December...In tonnage terms, the inflow was close to 10 tons, following the addition of about 84 tons in the seven months to June. Gold has rallied in 2019 to a hit a six-year high as global growth stutters, central banks including the Federal Reserve eased policy, and the festering trade war all combined to bolster demand. 'It is important for the country to diversify away from the U.S. dollar,' Philip Klapwijk, managing director at consultant Precious Metals Insights Ltd., said....Central banks continued to load up on gold this year, helping push total bullion demand to a three-year high in the first half, according to the World Gold Council. That trend is expected to continue, with a survey of central banks showing 54% of respondents expect holdings to climb in the next 12 months."
If China Is A 'Currency Manipulator', Then Every Country Is -Tamny/Forbes
"President Trump, Democrats like Sen. Chuck Schumer, along with countless other politicians, economists and pundits, believe that Chinese producers have gained a trade advantage by keeping the value of their currency (the yuan) artificially low. Supposedly this makes them more competitive. So if we ignore that the yuan has actually risen a fair amount against the dollar since 2005, it's easy to see why the accusations against the Chinese don't hold any water. They don't because money is a veil. It can't change the real price of anything....Chinese producers, like all producers, require voluminous imported inputs in order to manufacture the goods they aim to sell. If the Chinese are devaluing, any presumed competitive advantage gained by them is eroded by increased production costs....Not only is it naively asserted by the uninformed that the Chinese keep the value of the yuan artificially low, it's also said that they 'manipulate' their currency. In truth, China does what just about every country in the world does: it strives to maintain a tight relationship between the yuan and the dollar. The why behind the above is simple: the dollar is the world's currency....When the U.S. devalues the dollar, the tight relationship between the world's currencies and the dollar means that a devaluation stateside is generally a global event. Applied to President Trump, presidents mostly get the dollar they want, and Trump has been busy of late communicating to the markets his desire for a weaker dollar. This has revealed itself through a soaring gold price. Unsettling about all this is that it could get worse. Talking to reporters recently about further devaluation, Trump made plain that 'I could do that in two seconds if I wanted to.' Ok, but a weak dollar is tantamount to a weakening of currencies around the world....With his talking down of the dollar President Trump is introducing corrupted, faked returns and contracts into the world that producers can't fully protect themselves from, and the markets are responding. Devalued money is bad for investors, which means it's bad for growth. Someone should alert Trump to this."
8.9.19 - Investors Rushing To Gold
Gold last traded at $1,508 an ounce. Silver at $16.93 an ounce.
NEWS SUMMARY: Precious metal prices rose Friday on safe-haven buying and a weaker dollar. U.S. stocks traded lower amid renewed trade war fears as Wall Street concluded a wild week of losses.
Investors Rushing to Gold And Bonds As Stock Market Continue Tumbling -Newsweek
"Investors are turning to gold and bonds as stock markets continue tumbling amid increased trade tension between the United States and China. Trump's threat last week to impose tariffs on $300 billion more Chinese imports sparked investor fears. Beijing's decision to let its currency fall below the symbolic ratio of seven yuan to one dollar, which the U.S. responded to by labeling China a currency manipulator, has further sparked fears about the escalating trade war. After stocks registered their worst week of year and the Dow Jones Industrial Average suffered its sixth-largest point drop in history on Monday, investors are spooked and looking for a safe investment haven. As the stock market has slid, the value of gold has risen sharply. Spot gold is now priced above $1,500 per ounce, up from about $1,440 per ounce last Thursday. Goldman Sachs predicted that the price of gold, a more stable but less profitable investment than stocks, could rise to $1,600 per ounce. The price of spot silver is also rising and reached a 13-month high of $17.01 per ounce."
Loose Money, Big Deficits, and the Iceberg Ahead -Spectator
"Donald Trump accuses China of currency manipulation as he pressures the Federal Reserve to do the same thing. If you can't beat 'em, join 'em. 'Our problem is not China,' the president tweeted on Wednesday. 'We are stronger than ever, money is pouring into the U.S. while China is losing companies by the thousands to other countries, and their currency is under siege - Our problem is a Federal Reserve that is too proud to admit their mistake of acting too fast and tightening too much (and that I was right!). They must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW.'....The Fed, which just lowered interest rates, does not partake in quantitative tightening and has not done so for some time. It likely lowers rates further as the year progresses. Trump knows this, and the market expects this. So why continue carping on the Fed when it did, and likely continues to do, what you wish it to do (just not at the degree you wish it to)? Donald Trump faces a tight reelection bid next year....To squeeze whatever juice remains from the few undecideds who decide the race, the president requires the economy to move full speed ahead....An economy that booms does not require loose money and massive deficit spending. The fact that voices more extreme than the president's on this matter call for another round of quantitative easing, the Fed gobbling up securities to prop up the economy, makes this economic silly season even more farcical. Gross domestic product continues to grow at a healthy clip, the unemployment rate remains below 4 percent, and the Dow, despite its rough week, registers about 8,000 points higher than it did on Election Day 2016. Yet paranoia encourages all manner of gimmicks to boost an economy not in the doldrums....It makes some sense to borrow, loosen the money supply, and perhaps engage in quantitative easing when recessions, particularly those along the lines of 2008 or 1929, hit. Doing all this during periods of prosperity not only makes no sense, but also makes it more difficult to rely on such remedies once the economy really needs it. We may not control whether an iceberg lies ahead. We can restrain ourselves from placing it there."
Recession odds rise as economists cut growth estimates- MSN/Bloomberg
"The likelihood of a U.S. recession in the next 12 months rose to 35% in an August survey of economists, from 31% forecast previously, as global trade tensions fuel economic uncertainty. Growth in the world's biggest economy will average 2.3% this year, down from 2.5% seen in a July survey. Gross domestic product expansion is forecast to slow to a 1.8% annualized pace in the third quarter, from 3.1% in the first three months of the year and 2.1% in the second quarter. 'Trade tensions are needlessly roiling financial markets, which could eventually destabilize a stable economy,' Parul Jain, chief investment strategist at Macrofin Analytics LLC in Wayne, New Jersey, said in comments attached to her survey response....Economists moved up expectations for the next Fed interest-rate cut to September from December and now see a 25-basis-point reduction in the benchmark rate, to a range of 1.75% to 2%, at the next meeting, according to the poll. Global growth forecasts for 2019 were also cut, to 3.2% from 3.3%. Bloomberg's survey was conducted Aug. 2 to Aug. 7."
Now The Dollar Is Everyone's Problem -Zero Hedge
"Investing is hard enough that there isn't much room for unforced errors, yet many investors allow themselves to get distracted and miss important things. For long-term investors this mistake often manifests itself by getting caught up in day-to-day news stories and losing perspective on key structural factors. One such key factor is the global monetary system....Asset purchases by major central banks are especially powerful in boosting liquidity because they create base money from which even more money may be created through bank lending and other activities. As a result, asset purchases have a multiplier effect and can therefore be powerful tools for avoiding existential market risks due to lack of liquidity....Financial channels are driven by the US dollar as Martin Wolf points out in the FT, 'One traditional issue is the reliance on the US dollar in the global monetary system.' When dollars are easily available bubbles form, but when dollar liquidity dries up so too does associated economic activity. Wolf forecasts a continuation of negative trends....As a result, factors affecting dollar liquidity can pop up in lots of places. This presents a very different situation than in the early 1970s when Treasury Secretary John Connally famously (and arrogantly) told complaining European finance ministers, 'The dollar is our currency, but your problem.' Today, US dollar still reigns supreme relative to other fiat currencies (and therefor crucial for funding growth), but the US economy is a smaller part of the global total. At the same time, the Fed has considerably less control over US dollar liquidity which feeds back into lower global growth when it contracts. Now the dollar is everybody's problem."
8.8.19 - Gold Outperforms Stocks in 2019
Gold last traded at $1,518 an ounce. Silver at $17.06 an ounce.
NEWS SUMMARY: Precious metal prices hovered near 6-year highs Thursday amid market uncertainty. U.S. stocks rose as global bond yields rebounded while investors digested better-than-expected trade data out of China.
Gold surges above $1,500, now has a better return than stocks this year -CNBC
"Gold rose to its highest level in more than six years on Wednesday as concerns about the global economy made the precious metal and other traditional safe havens more attractive than riskier assets like stocks...Wednesday marked the first time since April 2013 that gold traded above $1,500. The gains brought the metal's gains to more than 18%. That return is higher than the S&P 500's 14.3% year-to-date gain....Investors turned to gold at a time when the amount of debt trading at negative yield increases. Currently, there is $15 trillion worth of bonds with negative rates. This makes gold more attractive since it retains its value even in times of slower economic growth. Concerns over the global economy come as the U.S.-China trade war intensified with Chinese authorities allowing the country's currency, the yuan, to depreciate against the dollar while several central banks around the world cut interest rates....Jeffrey Gundlach, CEO of Doubleline Capital, sees further gains for the precious metal moving forward as yields keep falling. 'At this point, I think the way to think about it is, as long as the volume of negative interest rate bonds outstanding increases, it's quite likely that gold moves higher in a similar vein,' Gundlach told Yahoo Finance."
Buy More Gold Now, Societe Generale Says -Barrons
"The price of gold hit its highest point since May 2013, and it could keep rallying...Societe Generale's Alain Bokobza reiterated a bullish view on gold in a note on Tuesday, writing that three major factors could sustain a 'gold fever.' 1. The current stage of the economic cycle - Societe Generale's asset-mapping framework is currently signaling a higher allocation into gold, according to Bokobza....2. Safe-haven assets are scarce - Bokobza believes the U.S. is nearing an economic slowdown or an outright recession, which would make portfolio protection a prudent move....3. Central bank purchases - Central banks, which are seeking diversification away from the dollar, are building gold reserves that could 'sustain steady growth for a prolonged period,' Bokobza noted....The growing threat of a currency war in recent days could add to this momentum and prove an overall tailwind for gold."
What the U.S. Government Isn't Telling You About the Trade War With China -Bonner/Bonner And Partners
"The whole ball of trade wars, Federal Reserve rate cuts, currency manipulation, inverted yield curves, and negative yields is so tangled up in deception and claptrap it is almost impossible to unravel....China is a key player in the whole worldwide bamboozle, wringing fake money out of debt-drenched consumers in Europe and America and spinning it into stocks, bonds… cement, steel… and even more factories and empty towns. Bringing China to its knees may be good for tweet-o-rama politics. It might even be doing the Chinese a favor… But it would be very bad for a world economy with $250 trillion of debt. It's Inflate or Die. And the China trade is a key part of the inflation program. Both the U.S. and Chinese economies are built on debt. The U.S. creates fake money and lends it out; Americans spend it on Chinese-made goods; the Chinese economy, thus stimulated, builds more factories and produces more goods, further undermining U.S. manufacturing industries. When China goes down, most likely, the U.S. and Europe will too....This 'manipulation' charge is a good illustration for the whole fandango. Everything is manipulated, up is down, tomorrow is yesterday. Nothing is true. Nothing is straight. Nothing is what it pretends to be. How do you untangle this mess? What's real? What's going on?....If we're right, real capital - gold - will become more valuable. Anti-capital - debt and wealth-destroying companies - will fall in value. And the Greed/Fear index will continue down until it finally completes its historic rendezvous with destiny. Then, you will once again be able to buy the entire Dow for five ounces of gold… or less."
Shooting stars -Ponte/WND
"A madman pens a manifesto, travels to El Paso, with a rifle murders at least 20 and wounds many others at a shopping mall, then surrenders, apparently intending to become a famous martyr, a shooting star. Will we let this madman - and the politicians eager to exploit what he did - kill America's future as a free nation? History sometimes turns on singular events. We need a careful, prayerful national perspective on which events should change history....This coming Saturday, Aug. 10, the wheels in the sky are bringing us other wonders and woes to contemplate. This weekend will bring Mother Nature's own Fourth of July fireworks, at least one shooting star per minute lighting the heavens in the annual Perseid meteor showers. The calendar is a map charting where our planet is in its annual orbit around the Sun. Aug. 10 is a place in space that Earth visits every year during that journey that defines a year....The typical Perseid shooting star is actually the size of a grain of sand and the density of cigarette ash. But it can hit our upper atmosphere traveling at 133,200 miles per hour, instantly heating from the friction of rubbing against gas molecules. At 90 miles above our heads, the shooting star starts to incandesce. A heartbeat later, around 60 miles up, it burns out as a cinder. And these shooting stars will appear to have their 'radiant,' their origin, in the northeast sky near the constellation Perseus, hence the meteor shower's name Perseids. Enjoy not only the science but also the wonder of the Perseids. Ancient peoples made a wish or prayer whenever they saw a shooting star. They believed that the heavens were behind an invisible window in which a door momentarily opened to let a shooting star messenger come to Earth; a quick wish or prayer, they believed, could enter into heaven before that door closed."
8.7.19 - Gold Prices Top $1,500 -Wall St. Journal
Gold last traded at $1,519 an ounce. Silver at $17.19 an ounce.
NEWS SUMMARY: Precious metal prices lurched to fresh 6-year highs on safe-haven buying. U.S. stocks fell sharply, adding to the month's steep losses, as a drop in global bond yields raised concerns about a slowing global economy.
Gold Tops $1,500 -Wall Street Journal
"Gold prices topped $1,500 a troy ounce for the first time in six years, driven higher by a drop in bond yields and investors’ flight from global stocks...Prices traded as high as $1,522.70 a troy ounce earlier in the session. Stoking the gains are renewed concerns that an intensified trade war between the U.S. and China will hurt already fragile global growth. Recent economic data has further fueled those fears - German industrial production figures for June, reported Wednesday, were much weaker than analysts expected, a sign that Europe's largest economy continues to struggle. U.S. stocks were down sharply in recent trading, with the S&P 500 falling around 0.8%. Government bond yields around the world slid further on Wednesday after interest-rate cuts by three central banks exacerbated investors' fears of slowing growth around the world, with the yield on 10-year Treasurys breaking below 1.6% earlier in the session....A popular destination for nervous investors, gold tends to attract buying during times of economic or political uncertainty. Prices are up more than 18% this year....'The collective mood is one where the trade war has taken on a different life,' said Ira Epstein, a strategist with Linn & Associates. 'There’s a lot of fear out there.'"
'Quantitative Failure' Gives Gold A Chance At $2,000, Says BofAML -Kitco
"Gold's rally has room to run with Bank of America Merrill Lynch (BofAML) projecting that the yellow metal hits $1,500 an ounce next year with the potential to get as high as $2,000....'We see scope for gold to rise towards $2,000/oz,' BofAML said in a report published on Friday. A big supporter of gold prices going forward will be the effects of 'quantitative failure,' the bank pointed out. 'Successive rounds of monetary easing have had a series of side effects...This has been a key driver behind the recent gold rally and with more easing to come, the dynamic will likely sustain a bid for the yellow metal,' BofAML wrote....Central banks will also continue to support gold with more buying as many now prefer to diversify their reserves to hold more gold, BofAML pointed out. 'The motivation behind the respective reserve strategies varies, with the historical positioning, the long-term store of value, gold's role as an effective portfolio diversifier and lack of default risk...De-dollarization features as well as a motivation,' the report noted."
When You Get An Email Like This From The Fed, It May Be Time To Panic -Zero Hedge
"Yesterday, in a lengthy article referencing the ongoing dollar and funding liquidity collapse as a result of the aggressive rebuild of the Treasury's cash balance from $133BN to $350BN in the aftermath of the debt ceiling deal, we said "Forget China, The Fed Has A Much Bigger Problem On Its Hands." As we explained in detail, the main reason why the Fed should be concerned, is that according to a research report from BofA's Marc Cabana which we used extensively in the report, the Fed may be forced to launch Quantitative Easing as soon as Q4 to provide the market with the much needed liquidity, or else suffer the consequences of a major liquidity shortage. To wit, in describing the various steps the Fed can engage in, this is what the BofA strategist said: 'Outright QE: after OMO dealer capacity is exhausted the Fed may need to start permanently expanding its balance sheet. The Fed would likely describe this as offsetting bank reserve demand and growth in other non-reserve liabilities'. Well, it appears that the Fed paid attention, because moments ago we received an email from a Federal Reserve researcher which should make everyone very, very nervous. Specifically, the 'rather urgent request' from a Fed staffer seeks the full Cabana report whose gist is that the Fed will have to launch QE4 in very short notice to offset the upcoming liquidity drain. Based on the Fed's email, we wonder if it means the Fed is now seriously contemplating following through on Cabana's recommendation, and if so, does the market crash first, or is it about to price in QE4 and soar. We expect to find out very soon."
Is an aging population actually bad for the economy? -The Week
"Birth rates have been falling for decades, not only in America but around the world, which now means the amount of older people is growing in proportion to many nations' working-age populations. Pretty much everyone on both sides of the aisle assumes that's bad for national economies. Conservatives rely on this assumption to argue for higher birth rates, liberals rely on it to argue for more immigration. But what if the assumption is wrong? It turns out the evidence that aging populations harm economic growth is far from conclusive...In 2017, the economists Daron Acemoglu and Pascual Restrepo looked at how rapidly GDP per capita grew between 1995 and 2015 in a whole bunch of countries and compared it to how much the ratio of old people to working-age people changed over the same period. Contrary to the prevalent assumption, they found basically no relationship at all. Another recent study out of Australia looked at rates of population growth across countries. The nations with slower population growth - up to and including negative population growth - actually saw faster growth for both GDP per capita and worker productivity. The mainstream assumption seems to be largely driven by the example of Japan...but Japan is at the extreme end of the overall global pattern. Within American specifically, there's also a historical problem with this story. It turns out that our dependency ratio - the number of non-working age persons relative to working age persons - was higher in the 1950s and 1960s than it is today. The reason was children...made up for the smaller proportion of old people....The theory that more old people means more saving relative to investment opportunities also makes a hash of how the economy really works....At any rate, while there is evidence out there that older populations are a problem for economic growth, it's hardly dispositive. There's plenty of reason to doubt it, and plenty of evidence in the opposite direction."
8.6.19 - Ditch the Dollar, Buy Gold -JP Morgan
Gold last traded at $1,484 an ounce. Silver at $16.44 an ounce.
NEWS SUMMARY: Precious metal prices rose to fresh 6-year highs on safe-haven buying. U.S. stocks struggled to rebound from their worst day of the year as trade tensions continue to dampen market sentiment.
Ditch the Dollar, Buy Gold and Other Currencies: JP Morgan -Kitco
"Investors should diversify away from the U.S. dollar and increase their exposure to other major currencies and gold, according to a report from JP Morgan. In a recent market note, the bank stated that it sees the U.S. dollar losing its status as the world's dominant currency, and consequently depreciating in value. 'There is nothing to suggest the dollar dominance should remain in perpetuity,' the note said. 'In fact, the dominant international currency has changed many times throughout history going back thousands of years as the world’s economic center has shifted.'....'Of the estimated $30 trillion in middle-class consumption growth between 2015 and 2030, only $1 trillion is expected to come from today’s Western economies,' Cohen said....'In currency space, this means the USD will likely lose value compared to a basket of other currencies, including precious commodities like gold.' Recent data on currency reserve holdings revealed that central banks were increasingly diversifying away from the U.S. dollar, increasing their gold reserves at a record pace while also selling their dollars and buying euros, Cohen pointed out."
Trade War Becomes Currency War -Wall Street Journal
"President Trump claims trade wars are easy to win, but that boast looks worse than ever amid the financial carnage from his latest threat of tariffs on Chinese goods. His trade war has now become a currency war, which raises the potential economic harm to another level. That was the ugly message Monday in financial markets, which sold off world-wide after China devalued the yuan following Mr. Trump's threat of 10% tariffs on $300 billion in Chinese goods. Emerging-market currencies plunged, equity markets dropped 3% or so on the day, gold and the U.S. dollar soared as safe havens, and the 10-year Treasury yield fell to a stunningly low 1.74%. The washout followed China's decision Monday to set its yuan-dollar peg below 7 to 1, its lowest level since 2008. Mr. Trump tweeted that this is 'currency manipulation,' but what did he expect? Late Monday the U.S. Treasury escalated the clash by officially calling China a currency manipulator, which could trigger more tariffs. But Beijing has an incentive to prevent any further devaluation to prevent capital flight....Where this currency convulsion ends is anyone's guess. One of Mr. Trump's trade conceits is that he can manipulate markets at will by dialing tariffs up or down. But currency markets have a tendency to overshoot and create unexpected casualties. Markets don't know how much financial strain a company in Shenzhen can bear before it defaults on its dollar bonds, and Mr. Trump doesn’t know either."
A second market sell-off could be 'Lehman-like' -Nomura/CNBC
"Investors shouldn't take much solace from Tuesday morning's slight rebound, says Nomura. They are warning the next sell-off could resemble a crisis-level plunge like the one that followed Lehman Brothers' collapse. This view is much more catastrophic than the rest of Wall Street with most firms predicting a stock market correction (down 10%) at most and likely just a slight pullback. Nomura is basing its view on data showing hedge funds fleeing the market and said more are set to exit when their algorithms are triggered by rising volatility....'At this point, we think it would be a mistake to dismiss the possibility of a Lehman-like shock as a mere tail risk,' Nomura macro and quant strategist Masanari Takada said in a note on Tuesday. 'The pattern in US stock market sentiment has come to even more closely resemble the picture of sentiment on the eve of the 2008 Lehman Brothers collapse that marked the onset of the global financial crisis.' The market plunge could arrive as soon as late August, Nomura predicted, as trend-following algo traders still have many bullish trades to unwind. 'We would expect any near-term rally to be no more than a head fake, and think that any such rally would be best treated as an opportunity to sell in preparation for the second wave of volatility that we expect will arrive in late August or early September,' Takada said. 'We would add here that the second wave may well hit harder than the first, like an aftershock that eclipses the initial earthquake.'"
The Ideology of Hate and How to Fight It -Brooks/New York Times
"Many of today's mass murderers write manifestoes. They are not killing only because they've been psychologically damaged by trauma. They're not killing only because they are pathetically lonely and deeply pessimistic about their own lives. They are inspired to kill by a shared ideology, an ideology that they hope to spread through a wave of terror....The struggle between pluralism and antipluralism is one of the great death struggles of our time, and it is being fought on every front. We pluralists do not believe that human beings can be reduced to a single racial label. Each person is a symphony of identities. Our lives are rich because each of us contains multitudes. Pluralists believe in integration, not separation. We treasure precisely the integration that sends the antipluralists into panic fits. A half century ago, few marriages crossed a color line. Now, 17 percent of American marriages are interracial....Pluralism is not just having diverse people coexist in one place. It's going out and getting into each other's lives. It's a constant dialogue that has no end because there is no single answer to how we should live. Life in a pluralistic society is an ever-moving spiral. There are the enemies of pluralism ripping it apart and the weavers of community binding it together...Pluralism is about movement, interdependence and life. The struggle ahead is about competing values as much as it is about controlling guns and healing damaged psyches."
8.5.19 - Global Markets in Panic Mode, Gold Rises
Gold last traded at $1,477 an ounce. Silver at $16.44 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on safe-haven buying and a weakening dollar. U.S. stocks plummeted as a trade war with China intensified with new sanctions and devaluation of the Yuan.
Stocks Slide as Trade Battle Intensifies -Wall Street Journal
"Stocks were pummeled by selling Monday, pushing indexes from New York to Shanghai lower, as the yuan reeled and fresh trade threats between Beijing and Washington raised fears of an economic slowdown. Stocks elsewhere retreated, with benchmark indexes in Europe, Japan and Hong Kong falling at least 1% apiece. The latest wave of selling started, investors and analysts said, after reports showed Chinese and U.S. officials ratcheting up pressure on each other in their prolonged trade fight....'Global stocks had been priced for perfection,' said Kenny Polcari, managing principal at Butcher Joseph Asset Management. 'Now people are realizing we may not get a deal.' Monday’s selling appeared to heighten traders’ bets on the Fed lowering interest rates multiple times by the end of the year."
Global markets are in panic mode - sparking a wave of investment into gold, bonds and currencies -CNBC
"Global growth worries and an intensifying trade war between the world’s two largest economies sparked a stampede into perceived 'safe-haven' assets on Monday. Gold prices jumped more than 1% to hit their highest level in over six years on Monday, while the Japanese yen and core government bonds also rallied. It comes at a time of heightened volatility in financial markets, with the pan-European Stoxx 600 falling almost 2%. That's on top of the 2.5% it lost on Friday - its worst day so far in 2019. The CBOE volatility index - known commonly as the VIX or Wall Street's 'fear gauge' - climbed to its highest level since mid-May, while Europe's equivalent reached its highest since early January. At times of market turbulence, investors tend to flee to assets expected to either retain or increase in value - such as gold...Safe-haven assets are typically sought to limit one’s exposure to losses in the event of a sharp market downturn."
Currency War Begins: Chinese Yuan Crashes Past 7 To New Record Low -Zero Hedge
"China is firing all the big guns because just an hour after Beijing effectively devalued the yuan, when it launched the latest currency war with the US, Bloomberg reported that the Chinese government has asked its state-owned enterprises 'to suspend imports of U.S. agricultural products after President Donald Trump ratcheted up trade tensions with the Asian nation last week.' China's state-run agricultural firms have now stopped buying American farm goods, and are waiting to see how trade talks progress. Translation: trade talks, even the fake kind, is now over, dead and buried, and the only question is how Trump will react... and sure enough, just a few hours alter in a dramatically unsettling move for global stability, China's offshore yuan just collapsed below 7/USD - after the PBOC fixed the onshore yuan below 6.90 for the first time in 2019 - the currency plunging a stunning 12 handles to its weakest on record against the dollar as countless stop losses were triggered and thousands of traders were margined out....China's central bank has confirmed...saying that it is able to keep the yuan exchange rate at a reasonable and balanced level - whatever that means - while acknowledging that the Yuan plunging beyond 7 per dollar is due to market supply and demand, trade protectionism and expectations on additional tariffs on Chinese goods. The carnage from yuan volatility is starting to spread... Chinese bond yields are tumbling."
The superrich are selling stocks, buying properties and keeping cash ready -Marketwatch
"The superrich blueprint to navigating this hairy stock market: Tap the brakes and get ready to pounce when it all goes to hell. And by the looks of Monday's action, hell might not be too far away. In the first quarter, Tiger 21, a coalition of 750 members worth in excess of $75 billion, raised cash to levels not seen since 2013....These deep-pocketed investors are continuing to move away from equities and build up their positions in real estate. As Tiger 21 President Michael Sonnenfeldt previously told MarketWatch, the stock market is 'priced to perfection' and rising economic inequality leading to greater polarization in America and elsewhere.'"
8.2.19 - Middle Class Dives Deeper in Debt
Gold last traded at $1,457 an ounce. Silver at $16.24 an ounce.
NEWS SUMMARY: Precious metal prices rose this week on safe-haven buying and a weaker dollar. U.S. stocks fell as President Trump stoked U.S.-China trade fears with the announcement of more tariffs while investors digested U.S. employment data.
Gold's Mission: Revisit Resistance At $1,700 An Ounce -Bloomberg Intelligence/Kitco
"The gold market is set up to continue its bull run after a pause, according to Bloomberg Intelligence (BI). 'Gold's advance appears to have among the strongest foundations,' BI senior commodity strategist Mike McGlone said in the latest commodity outlook. 'Gold prices should continue to advance. Fed easing is a tailwind.' The gold bull run is projected to continue this year as gold's mission is to revisit its resistance at $1,700 an ounce, last seen in 2013, McGlone highlighted. 'A potential increase in hedge fund positions supports our view that gold's initial mission is revisiting resistance near 2013's peak at $1,700 an ounce,' he said. 'Hedge funds' net-long futures positions are a bit extended, but indicate that gold is in the early days of a bull market.' The only headwinds strong enough to hold gold back from the $1,700 an ounce level is a higher U.S. dollar and weaker equity volatility, warned McGlone. 'The extent to which Fed easing can reverse the appreciation of the dollar should be the primary factor behind gold's showing vs. U.S equities,' he wrote."
Adding More Tariffs on Chinese Goods Seems Like a Great Way to Torpedo the Economy -Slate
"On Thursday, Donald Trump announced that starting in September he would impose a new 10 percent tariff on goods from China, after trade talks with the People's Republic apparently failed to make progress. He announced the tariff in a series of tweets... The new border taxes will apply to the $300 billion worth of Chinese goods that, until now, had not faced a tariff. Another $250 billion will continue to be tariffed at a 25 percent rate. This move comes at a sort of odd time. The U.S. economy has been looking fragile lately - bond markets are screeching in panic, GDP has slowed a bit, and business investment is drying up. Just about everybody agrees that the trade war is contributing at least somewhat to the uneasiness, though it's hard to say precisely how much. When the Federal Reserve cut interest rates on Wednesday, Chairman Jerome Powell emphasized that the central bank was doing it in part to make sure that the trade war didn't accidentally capsize the economy. (Or, as he put it, the move was meant to 'ensure against downside risks to the outlook from weak global growth and trade tensions.' Gotta love Fed speak.)....It will almost certainly be bad for the overall health of the economy, if only marginally so. So, what's going on? One possibility is that Trump simply isn't worried about the effect that his tit-for-tat with China is having on the economy and just wants to keep fighting it to the bitter end...But it's also possible that this move is partly meant to scare the Fed into taking more action than it did Wednesday. Many investors (as well the president) were hoping that Powell would signal that the Fed intended to pursue an aggressive series of rate cuts. Instead, the chairman hinted that the central bank might only cut rates further if the outlook for the economy got worse and said that 'trade tensions' were one of the important factors that policymakers would monitor....When the Fed cuts, it tends to push down the value of the dollar, which makes Chinese imports more expensive to Americans and U.S. exports more affordable to the world. If increasing tariffs leads the Fed to cut rates and devalue the dollar as a result, it's basically a two-for-one strike against Beijing."
Families Go Deep in Debt to Stay in the Middle Class -Wall Street Journal
"The American middle class is falling deeper into debt to maintain a middle-class lifestyle. Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy. Consumer debt, not counting mortgages, has climbed to $4 trillion - higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding. Student debt totaled about $1.5 trillion last year, exceeding all other forms of consumer debt except mortgages. Auto debt is up nearly 40% adjusting for inflation in the last decade to $1.3 trillion. And the average loan for new cars is up an inflation-adjusted 11% in a decade, to $32,187....The debt pile is also an accumulated ledger of economic risk. It should be manageable so long as unemployment remains low. If job losses begin to rise, it would become unsustainable for some share of borrowers, raising chances of an increase in missed payments and lenders writing off unpaid balances....In case of a broad economic downturn, people's debt levels could weigh on the economy for an extended period, because people who carry a lot of debt into a downturn tend to rein in their spending for years afterward."
Is it time to take Marianne Williamson seriously? -Yahoo News
"The first night of CNN's two-part Democratic presidential debate series featured strong moments from top contenders like Bernie Sanders and Elizabeth Warren, but it was an unlikely candidate who drew the loudest support from the audience. Marianne Williamson spoke just nine minutes during the two-hour-plus debate, but may have left a lasting mark with her impassioned statements on race and the purpose of government. The famed self-help writer has up until now been known as a wellness advocate who keeps company with celebrities like Oprah, Cher and Kim Kardashian. But on Tuesday, she turned heads with reasoned arguments on reparations for the descendants of slavery and the causes of the Flint, Mich., water crisis, while invoking New Age-y concepts like the 'dark psychic force' of racism. She was the most-searched candidate during the debate, according to Google Trends, despite regularly polling at - or below - 1 percent. Before the Tuesday event, Williamson's campaign had been seen by many as a fun but ultimately frivolous oddity of the 2020 primary cycle. Statements like her plan to 'harness love for political purposes' led to significant online reaction, the tone of which varied somewhere between admiration and mockery....Williamson's chances of actually contending for the Democratic nomination are still quite small. She'll have to improve her polling numbers and donor base just to make the stage for the next debate in September. She reportedly hasn't said whether she'd stay in the race if she failed to reach the debate or if she intends to run for office in the future."
8.1.19 - 2019: Will Silver Outperform Gold?
Gold last traded at $1,451 an ounce. Silver at $16.35 an ounce.
NEWS SUMMARY: Precious metals rose Thursday on bargain-hunting and a flat dollar. U.S. stocks rose as investors increased bets on the Federal Reserve cutting rates for a second time later this year.
Why Silver Will Be a Better Bet Than Gold if the Precious Metals Rally Continues -TheStreet
"Anyone bullish on precious metals should consider silver...The white metal tends to see far more volatility, which is an advantage for traders in an up-trending market. Plus, silver prices are still playing catch-up with gold based on historical price analysis...In a bull market, volatility is okay as long as it is upward trending volatility, which is exactly what we see right now in the precious metals market. In such a case, savvy traders should take a more volatile route....Silver tends to outperform gold when the market is moving up, just like small caps frequently outperform large caps in an equity bull market....Silver production is overwhelmingly the result of miners pursuing other minerals such as gold and copper. In 2018, 74% of silver production was the result of this so-called secondary production, according to the Silver Institute....Silver prices are also low now when compared to gold using something known as the gold-silver price ratio. Currently one ounce of gold trades for 87 times the value of one ounce of silver. Historically, that ratio has been in the range of 40 to 80, says Matthew Miller, a mining analyst at New York-based research firm CFRA. Or in other words, gold is now trading at a premium valuation to silver based on history."
Will Silver Outperform Gold? -Swiss America Report
In July 2019, silver prices rose above $16.00/oz. as the historic Gold-to-Silver Ratio peaked at 93-to-1. Since then, the ratio has rapidly fallen back to the mid-80s. We feel strongly that the ratio could continue dropping toward a more normal range near 60-to-1, or lower - which could push silver prices up as much as 25%-50% to $20-$25/oz. - regardless of whether gold prices rise or not! Right now the Gold-to Silver ratio may present an excellent opportunity to convert a portion of your physical gold or Precious Metal IRA gold holdings into physical silver to maximize growth potential. Discover the simple "Ratio Trading" strategy, used by precious metal traders for thousands of years as a smart means of increasing metals holding over time. In The Silver Report we examine the five major drivers that are propelling silver prices in 2019. Now is the time to rediscover silver! Get a complimentary copy of The Silver Report today. Call 800-289-2646 or register HERE.
The Capital One Breach: What It Means for You -Wall Street Journal
"In this latest massive consumer-data breach, a hacker accessed the personal information of 100 million Capital One credit-card customers and applicants in the U.S. and six million in Canada. The breach stands to be one of the worst for U.S. consumers because of the type of financial information that was accessed. This valuable consumer financial information can be used to figure out the identities of the most creditworthy or affluent consumers and open a card or loans in their names. Here's what you need to know if you have a Capital One credit card or have applied for one in the past, and how to protect your accounts and information. Sensitive identity information about consumers and small businesses who applied for Capital One credit cards between 2005 and 2019 was exposed. So if you have a Capital One credit card, or have applied for one in that time frame, your information is part of this data breach. The information leaked includes names, addresses, ZIP Codes, phone numbers, email addresses, dates of birth and self-reported income, the bank said. Consumer data including credit scores, credit limits, balances, payment history and some transaction data are also part of the breach. Also exposed were about 140,000 Social Security numbers and 80,000 linked bank account numbers....There are three things those who either have a Capital One credit card or applied for one should do immediately. First, freeze your credit....Then, change your passwords....After that, set up two-factor authentication for all your financial profiles and online accounts."
How "Free Money" Has Changed Baltimore -Bonner/Bonner And Partners
"Baltimore used to be the richest and most sophisticated city in America. And still today, there are many honest, fair, and noble bipeds in the 7th district; the rest commute to Washington. The typical Trump tweet is a jolly mix of fantasy and claptrap. But on Sunday, there was more truth in the tweet that took aim at the 7th congressional district and its representative. Trump’s opportunity came when Rep. Elijah Cummings took on the U.S. Border Patrol, yelling at its chief during congressional hearings. Trump counterattacked: 'If he spent more time in Baltimore, maybe he could help clean up this very dangerous & filthy place'....By the mid-20th century, the self-reliance and small government ideas that had built Baltimore were giving way to new ideas. People were beginning to think that the federal government could make life better for everyone - by spending money....The Heritage Foundation claims that $22 trillion has been spent on anti-poverty programs over the last half-century (adjusted for inflation). Much of that money must have gone to Baltimore...But free money is an attractive nuisance. Whether you give it to the poor or to the rich, it has the same effect. The Federal Reserve's free-money lending rates, for example, encourage savers not to save and risk-takers not to take up the risks and hard work of satisfying real customers. They lure businesses not to do more business; instead of investing in new plants, new equipment, and new employees, they make their shareholders wealthy by manipulating stock prices with ultra-low-interest loans....Poverty programs work the same way. When you pay people to be poor… they don't exactly get up at 6 a.m… bright-eyed and bushy-tailed, eager for another day of work and innovation. Instead, like people on the federal payroll everywhere, they waste time and money… confident that the next checks will come, no matter what they do."