We are often directed to think that the market reacts in the same manner as Newtonian physics. We believe that a news event which accompanies a market move was certainly the “cause” of that market move. But, how often have we seen markets react in the exact opposite manner in which the substance of the news event suggests?
While science has moved away from Newtonian physics, stock market analysts have not.
Wednesday, we saw a perfect example of this conundrum. Full Story
Because gold does not rely on the performance of another party, it is detached from the matrix of interlocking counter-party risk and occupies a unique place on the financial balance sheet as an asset of last resort and the final arbiter of value. That is why nation states and central banks hold large amounts of it on their own balance sheets and why funds and institutions are more and more moving to it as an offset against other trading strategies.
Investors have always viewed gold as a reliable hedge against inflation and deflation. In the years to come, they might very well come to know it as an effective hedge against computer-generated financial mayhem as well. Full Story
This “consider collateral consequences to innocent 3rd parties” is what led to the bailout of the banks in 2008 and the absence of any criminal prosecutions against bank executives despite the overwhelming evidence of culpability. Oh by the way, Eric Holder just happened to be appointed Attorney General in 2009 by Obama to make sure that Section IX of Holder’s 1999 memo held up during the period of time when the banks and their CEO’s should have been held accountable and sent to jail. Full Story
As far as my longer-term target, well, for years we have had a minimum target of 3200SPX before this long-term rally off the 2009 lows completes. However, I am beginning to see signs that it can extend as high as the 4000-4100SPX region by 2022/23. Much will depend upon how the market takes shape over the rest of 2019, which should then provide us a more accurate perspective as to how high this final 5th wave can take us. Stay tuned. Full Story
By: Gary Christenson, The Deviant Investor - 13 March, 2019
The welfare people and the warfare people control congress, appropriations, corruption and national policies. Implications are grim.
If a nation subsidizes butter, it will get more butter. The U.S. and most other western governments subsidize welfare and warfare. Those expenses inevitably increase and are inescapable, like the mathematics of debt.
The U.S. federal and state governments created a huge network of government programs, giveaways, entitlements and public assistance. The welfare people have increased the number and cost of those programs every decade. Giveaways will expand next decade when the U.S. elects a welfare-oriented politician as President. She will push for Universal Basic Income, Medicare for all, guaranteed jobs, free tuition, wealth taxes and more. Full Story
A year ago, Republicans in control of Congress suspended the cap on federal borrowing. The limit was automatically re-imposed on March 1st. Politicians now have a few months to hammer out legislation to raise the cap as the Treasury employs “extraordinary measures” to fend off default.
The federal deficit is mushrooming once again. The 2017 tax cuts have taken a bite out of receipts at the IRS and economic growth has not met expectations.
This year’s borrowing to fill the gap between government tax revenue and expenditures may reach a trillion dollars for the first time since 2012. Full Story
And so it went on 60 Minutes on Sunday evening. I strongly recommend reading Kunstler’s entire essay: Ides and Tides…The Fed and the FOMC are not mandated to set monetary policy to stabilize employment and inflation. The Fed’s role is to help the banks maximize profits. That’s it in a nutshell.
The best way to fight and protect yourself from the Fed’s mandate is to own physical gold. Phil Kennedy of Kennedy Financial invited Bill “Midas” Murphy and I to discuss the gold market and where it’s going from here... Full Story
While Peak Gold or production difficulties do not affect the Gold price, they are hugely bullish for the companies that are making high margin discoveries or adding value to high margin deposits. Capital is flowing to the companies that are making these discoveries regardless of the trend in metals prices. When Gold fundamentals turn bullish, that is when massive amounts of capital will flow into juniors, creating a historic bull market.
Drawing on the work of Robert Lambourne, GATA's consultant on the Bank for International Settlements, the TF Metals Report's Craig Hemke notes at Sprott Money today that the recent monthly gold swapping reported by the Bank for International Settlements corresponds almost precisely with the simultaneous draining of gold inventory from the exchange-traded fund GLD.
Lambourne reported last week that about 56 tonnes of gold swaps were placed by the BIS in February Full Story
QE Forever, Shanghai SGE gold market, new Basel gold rules the last ten years have created the new global subprime bond -- USTreasury Bonds a perfect storm has developed with several dangerous sides numerous steps have begun, all in progress, where nothing can stop the procedure the global rebellion against the King Dollar has created a Dual Universe the East will drive the process, with many disruptive events assured expect Gold Trade Note introduction expect banking system failures, followed by monetization of the big banks expect discharge of USTBonds in banking reserves, in favor of purchased Gold bullion expect battles for global resources and derivative collapse the United States must conform to the new reality in an honest legitimate manner,or else face the risk of isolation, perhaps even falling into the Third World. Full Story
China grew its gold reserves for the third straight month to 60.26 million ounces, up from 59.94 million ounces in January, according to data on the People’s Bank of China website. Robin Bhar, head of metals research at Societe Generale SA said: “Ongoing efforts to diversify total reserves – away from the U. S. dollar – have prompted gold purchases by the PBOC, which we believe will continue.” Physical gold demand also picked up in major Asian hubs this week, as bullion was sold at a premium for the first time in more than three months in India, the world’s second largest consumer, according to Reuters. Full Story
The short position of the Big 4 traders in gold is down to 25.4 percent of the total open interest in gold...which is a big drop from last week -- and the traders in the Big '5 through 8' category actually increased their short position by a bit during the reporting week. But despite that increase, the short position of the Big 8 traders took a tumble last week, as the are now short 'only' 37.4 percent of the entire open interest in the COMEX futures market in gold.
Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more, as they sold 28,314 long contracts -- and they increased their short position by 18,998 contracts as well. It's the sum of those two numbers...47,312 contracts...that represents their change for the reporting week.
The difference between that number -- and the commercial net short position...47,312 minus 45,848 equals 1,464 contracts was made up almost entirely by the traders in the 'Nonreportable'/small trader category, as the 'Other Reportables' barely did anything on a net basis during the reporting week. Full Story
By: Chris Waltzek, GoldSeek Radio - 11 March, 2019
Best selling author and show Mentor, Dr. Stephen Leeb returns with an key insights on the coming precious metals bonanza. - As the world searches for alternatives to the reserve currency to avoid what is sometimes perceived as unfair trade practices. - The price of gold is destined to return to it's former lofty position as king among the 6 chief global currencies. - China has slowly started opting out of of the petrodollar arrangement, as nations line up for Yuan based oil transactions. - The blockchain revolution will facilitate the transition from the outdated fiat currency system dominated by one key player. - The new paradigm will restore individual sovereignty and personal freedoms by crushing antiquated barriers. Full Story
Financial analysis published two weeks ago by a major Italian newspaper, Il Sole / 24 Ore (The Sun / 24 Hours), asserted frankly that central banks have been using gold futures and derivatives to suppress the monetary metal's price so they can obtain more of the metal less expensively in advance of its remonetization under new rules promulgated by the Bank for International Settlements to take effect March 29.
Of course the new BIS rules, the "Basel 3" standards, declaring gold in the vault to be a superior asset, equivalent to cash and government bonds, are not news. What's news here is that a mainstream financial news organization has nailed the deception and intrigue of central banks and accused them of rigging the international gold market. Full Story
Sound money advocates rejoiced today as the West Virginia legislature overwhelmingly passed Senate Bill 502 and sent it to Governor Jim Justice for his signature.
First passed in the West Virginia senate unanimously last month, the measure removes state sales taxation of precious metals, specifically on gold, silver, platinum, and palladium bullion and coins. Full Story
Gold benefitted from the poor economic numbers seen on Friday but at the end of the week all gold could do was remain flat on the week. Silver managed to eke out a small 0.6% gain. Our view on gold hasn’t changed. After hitting a peak near $1,350 our expectations are a corrective period that could last into May and gold fall to around $1,250 with a worst case scenario down to $1,220. That would fit with a stronger US$. Nonetheless gold after falling from $1,350 to near $1,280 is due for a rebound. We note improvement in the commercial COT this week suggesting the commercials have knocked back on their short positions although they didn’t really add to their long positions. A gold rebound could take gold back to around $1,320 before it resumes its down trend. Once this correction is out of the way our expectations are that gold should embark on a multi month rally that should take it past $1,400 and up towards $1,500. Full Story
The European Central Bank joined all other major central banks in twirling away from the tightening it had just promised and rushing back to renewed rounds of easing via mega loans to banks because it got schooled in a hurry to the awakening that it cannot ever unwind its balance sheet. It made this stunning pivot when reality forced it to admit the European economy is stalling. The ECB forecast prerecessionary growth of just 1.1% for 2019. To finish the dance, reports came in after Chairman Draghi’s announcement that some ECB thinksters didn’t think their central bank downgraded the economy far enough!
And, so, the bank that once promised it would do anything to save the Franco-German Empire will return to doing what hasn’t worked so far. As happened in China, this new round of promised profligacy was not greeted with the now customary market ecstasy. Exasperated European investors dwelled, instead, on what the ECB’s flash reversal revealed about Europe’s economy. Full Story
By: Keith Weiner, Monetary Metals - 11 March, 2019
Money, or even an irredeemable currency, has a dual nature (in this article, we will do something we have never done before. Except where specifically said otherwise, we will treat money and currency the same, and when we say money, in this article, we also mean that the same applies to the dollar too).
We assume that readers are familiar with the income side of the duality. One earns $X. One can spend up to $X dollars. The purchasing power paradigm is based on this side of money’s nature. It even goes so far to think of all assets in terms of their liquidation value, and hence purchasing power.
The reason is simple. If the central bank has a mandate to devalue, then one would be a fool to hold a significant money balance for a long period of time. There is an expression that fits this idea perfectly. You put your money into something. It could be stocks, real estate, crude oil, bitcoin, etc. Whatever you expect will go up in purchasing power. We get comments all the time, asserting that the point of owning gold is that it will go up—you guessed it—in terms of purchasing power. Full Story
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