Mainstream economics uses a fairly simple equation when it comes to public policy: More government spending equals more growth, which is just about always a good thing. The problem is with the “just about always” part. At the bottom of recessions, tax cuts and higher government spending can indeed stop the shrinkage and get things going again. And fiscal stimulus might be relatively harmless when an economy has minimal debt and can therefore handle a bit of deficit spending without negative side effects. Full Story
The next major expense facing governments and their central banks is a future credit crisis, likely to tip the inflation story into hyper-drive. Possibly, it will be a modern Diocletian moment, the final act of debasement before the lights go out, and we (only metaphorically, one hopes) leave the cities to forage in the country. A credit crisis is always the culmination of a credit cycle, endemic to economies destabilised by central banks trying to stimulate consumption by monetary cheating. Full Story
OBOR - also known as the Belt and Road Initiative – is drawing supplies of commodities to it across the board, like iron filings to a magnet. Concrete, iron, zinc, copper... silver and gold. Silver, as a critical ingredient in the electronics and communication build-out; gold (+ silver) because of rising incomes for China's middle class – larger than the population of the U.S. – which will continue the historical habit adding to its precious metal holdings. Full Story
The global economy is booming again after years in the doldrums, commodities are back in a big way, and metals prices are for the most part, way up. In our last article showing how commodities are the place to be in 2018, we looked at five drivers: inflation, the low dollar, economic growth, the relative undervalue of commodities versus other sectors, and tightness of supply. This article expands on the economic growth argument, and explains how commodity prices are being moved by a bevy of infrastructure projects around the world – all demanding “yuge”, as Donald Trump would say, amounts of metals. Full Story
Gold is faring quite well today technically, though you sure wouldn’t know it from the rampant bearish sentiment. Gold’s price is in a strong uptrend over a year old, high in both its current upleg and young bull market. Gold isn’t far from breaking out to its best levels since September 2013, a really big deal. The stock markets even finally sold off after years of unnatural calm. Yet traders are still down on gold. Full Story
Andy Schectman of Miles Franklin Institute is partnering with Sprott Asset Management via a physical gold-backed, distributed ledger at the Royal Canadian Mint. Many pre-mined cryptos have early deep-pocket investors that own 80% or more of the tokens outstanding, diminishing the much touted decentralization aspects. The Sprott / Franklin gold blockchain is equally distributed, albeit somewhat centralized. Full Story
Governments and central banks inevitably inflate the supply of currency units (devaluation) more rapidly than the underlying economy grows. They add to the unpayable debt load, pretend $230 trillion in global debt is normal, reduce the value of existing dollars, (euros, yen, pounds) as they create more currency units, and support the narrative that “all is well.” Full Story
Bill Murphy of GATA.org, returns with his perspective on the PMs and Bitcoin. After soaring to 20k and then plunging to less than 6k, investors are searching for safe haven assets with lower volatility, such as gold and silver. Bitcoin recently eclipsed 10k, due in part to anticipation surrounding the lightning network upgrade, where developers seek to reduce Bitcoin fees and vastly improve transaction rates. Full Story
Sometimes the volatility of daily price movement causes traders to lose sight of what is really happening. This video gives a refreshing view of the bigger picture for a number of markets using their weekly charts. Full Story
About a year ago, I read The Great Beanie Baby Bubble by Zac Bissonnette. It details how basic human greed, an artificial sense of scarcity and newly created technology like eBay, were used to artificially inflate re-sale prices and convince otherwise intelligent humans to sink their life savings into plush toys that were being created by the millions at a price-point measured in the pennies. In fact, it isn’t all that dissimilar to the current bubble in crypto-currencies—another asset class with; thin trading volume setting the market price and new technology that enraptures investors, that is likely to prove entirely worthless at some point in the not too distant future. Full Story
Stocks dove late in Wednesday’s session on news that the minutes from the January FOMC meeting were more than a little hawkish. From where we were sitting, the selloff looked like a brazen shakedown. It amounted to a 475-point reversal in the Dow, but that’s the kind of plunge that Wall Street’s thimble-riggers engineer whenever they are hungry for shares at bargain prices. For their part, the Fed governors seem convinced that U.S. economic growth is strong enough to handle who-knows-how-many more rate hikes without trouble. Full Story
Eventually a real bear market will shred the duct tape and chewing gum that’s holding the public pension machine together. And several trillion dollars of obligations will migrate from state and local governments to Washington, which is to say taxpayers in general, at a time when federal debts are already soaring. Full Story
Remember how mining stocks soared on Valentine’s Day and how we wrote that a rally is not necessarily bullish? Guess what – this rally has been more than erased. Miners not only closed below the February 14th opening price, but also below the February 13th and 12th closing prices. Mining stocks big rally turned out to be nothing more than just a regular 50% retracement during a decline – something that we saw many times in the past and that we described as likely. But, since the rally was rather inconsequential, then perhaps the decline is inconsequential as well? Full Story
A colleague of mine pointed out that Trump has not been tweeting his flatulence about the economy recently. This thankful hiatus is after he just passed a tax cuts and a spending budget that is supposed to be stimulative. As it turns out, the economy is hitting the headwinds of marginally higher interest rates and a consumer that is bulging from the eyeballs with debt. Windfall tax rebates to large corporations will not fix this nor will rampant Government deficit spending. Full Story
A position in physical gold and silver should be viewed as a core long-term holding. However, there are some times in the commodity cycle that are more favorable than others for buying. Right now the cycle appears set to pressure metals prices higher. How much higher is unknowable. If renewed inflation fears drive investors into gold and silver markets for safety and later, speculation, prices could easily exceed the 2011 cycle highs by significant margins. Full Story
This video examines the current cyclical setup of both the US Dollar and gold and details specific time and price projections for each in the upcoming 4 weeks. Full Story
Last Friday marked the first day of the Chinese Lunar New Year, also known as the Spring Festival, China’s most important holiday. The fire rooster struts off-stage, clearing the way for the loyal earth dog. According to CLSA’s tongue-in-cheek Feng Shui Index, health care, consumer and paper products are favored to outperform early this year, followed by internet, utilities and tech leading into the summer. Full Story
With the recognized top in the US dollar, it appears clear that renewed bull markets have begun across the commodity sector. Copper, crude oil and even gold are showing rallies and breakouts that promise much higher prices in the months ahead. But what's the matter with silver? Full Story
The precious metals sector is on a long-term buy signal. Short term is on sell signals; a pullback is in progress. The cycle is down. COT data is supportive for overall higher metal prices. We are holding gold-related ETFs for long-term gain. Full Story
We buy gold for many reasons—as monetary insurance, a crisis hedge, and even for simple diversification. And another one of those reasons is coming to the fore right now: as a hedge against overvalued stock and crypto markets. We’ve been saying for some time that sooner or later these two markets had to correct—and that gold would serve as a buffer against those inevitabilities. It’s a short and simple message, but one that is crucial for investors to address: Are you sufficiently hedged against overvalued equity and cryptocurrency markets? Full Story
Join Mike Maloney in Acapulco for an update on the gold/silver ratio, which has recently hit extreme levels. How does Mike trade this to his advantage? Watch the video to find out. Full Story
It is my privilege now to welcome in Chris Powell, Secretary-Treasurer at the Gold Anti-Trust Action Committee, also known as GATA. Chris is a long time journalist and a hard money advocate and through his tireless efforts at GATA he is working to expose the manipulation of the gold and silver markets. Through GATA's work over the years some important revelations have come to light, which quite honestly should concern everyone. Full Story
Jerome has tax cut inflationary wind at his back, and I expect most market gurus (mainstream and gold) to find themselves shell shocked when Jerome shows them on March 21 just how focused he really is on reversing US money velocity. Let’s hope the entire world gold community is as focused as I am on accumulating key gold stocks in my $23 - $18 buy zone for GDX, in preparation for a major league bull market in US money velocity! Full Story
The best performing metal this week was palladium, up an impressive 7.17 percent after having been trending down since the middle of January. The weekly Bloomberg survey showed gold traders are overwhelmingly bullish after being bearish last week as the yellow metal is set for its best week since April 2016. A falling U.S. dollar has boosted demand for bullion as an alternative asset. Gold futures also had a big week, surging the most in 11 months, reports Bloomberg. Full Story
By: Jordan Roy-Byrne CMT, MFTA - 20 February, 2018
Gold has been on the cusp of a major breakout but someone forgot to tell the gold stocks. Gold is right back at resistance levels yet the various gold stock indices are off their September 2017 highs by 11% to 16%. The relative weakness in the gold stocks (and Silver) is a signal that Gold is unlikely to breakout now. In fact, if Gold were to correct here the gold stocks could threaten support and perhaps make new lows. While that sounds quite bearish, history shows that a break to new lows in gold stocks would be a massive buy signal. Full Story
It is partially true that silver outperforms gold during precious-metals bull markets. In particular, it’s true that silver tends to achieve a greater percentage gain than gold from bull-market start to bull-market end. It’s also the case that silver tends to do better during the final year of a cyclical bull market and during the late stages of the intermediate-term rallies that happen within cyclical bull markets. However, the early stages of gold-silver bull markets are characterised by relative strength in gold. Full Story
Before diving into the topic, let’s be clear about one thing: The economic definition of “inflation” is the increase in money supply relative to the marginal increase of wealth output (GDP) in the economic system for which money supply is created. This is differentiated from “price inflation,” which is “a general rise in prices.” Full Story
The gold market is setting up for a perfect storm as the top mining producers’ supply is forecasted to decline right when demand is likely to surge. The surge in gold demand will occur as the broader stock markets roll over and begin their inevitable massive correction. Due to the tremendous amount of leverage in the system, the coming market correction will be quite violent at times. If investors believe the correction is over, and high times are here again, then they haven’t learned anything about the cyclical nature of markets. Full Story
Over the last several years, beginning in 2013 I’ve made post titles like ‘Semi Bullish‘ in response to the bullish leading edge economic cycle indicator, the Semiconductor Equipment sector and its implications for broad stocks and the economy. Those implications of economic acceleration were along these lines… Semi Equipment Book-to-Bill (b2b) → Broad Semi → Manufacturing → Employment → Firm Economy. Full Story
On the heels of news that nearly 1000 trapped gold miners were rescued from an underground labyrinth, Peter Grandich of Peter Grandich and Company and Pete Speaks returns. Our guest notes he is a "Real gold bull... haven't been this bullish on gold in 34 years." Expect a new record gold price to unfold in less than two years. Arch Crawford, head of Crawford Perspectives, continues to caution US equities investors that the correction could continue in 2018. His analysis indicates summer could present the most market volatility. The opening salvo began with the Carillion fiasco in the UK (figure 1.1.). Full Story
Yes, all investment opportunities compete against each other, but not all of them have to compete against central banks, creators and dispensers of infinite money. After all, might not gold trade more positively if it was not constantly being jostled by a gold derivatives position of nearly 600 tonnes being managed aggressively every day by the Bank for International Settlements on behalf of its member central banks? Full Story
For most retirees age 65 and over, the spending power which they rely on from government retirement programs is their Social Security benefits after their Medicare Part B premiums have been withheld. Because Social Security is in theory supposed to be fully inflation indexed, many people believe their standards of living in retirement will be fully protected from inflation. However, when we look at what matters the most, which is the purchasing power of Social Security net of Medicare premiums - that particular number has never been intended to keep up with the rate of inflation, as a matter of design. Full Story
For those that follow me regularly, you will know that I have been tracking a set-up for the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX), which I analyze as a proxy for the metals mining market. I believe that GDX can outperform the general equity market once we confirm a long-term break out has begun, and I still think we can see it in occur in 2018. This week, I will provide an update to GDX, but want to also discuss the SPDR Gold Trust ETF (NYSEARCA:GLD), which is an ETF that attempts to mirror the movements of gold. Full Story
In the past few weeks, we have argued that interest rates will not rise. We have made our arguments based on observable cases of soft credit demand that falls with rising rates, and analysis of the incentives on creditors and debtors. Ours is a case that rates can’t go up much, for long, because demand for credit won’t chase rates up. In the postwar period up to 1981, borrowers chased rates all the way up the moon. But not since then. Full Story
While I do not think that the world is going to collapse tomorrow or a solar flare will cause an EMP event that will fry all the computers I do find a little comfort in knowing that a part of my wealth is in real hard precious metals assets that I can hold and touch and is in no way connected to the electronic world. Full Story
Gold continues to prepare to break out of its giant Head-and-Shoulders bottom pattern. As we can see on its 8-year chart below, this base pattern has been developing for getting on for 5-years now, so it has major implications. Upside volume has been building for a long time, driving volume indicators higher, a sign that a breakout and new bullmarket is simply a matter of time, and not much at that now. Full Story
Federal Reserve officials like to say their policy course is “data-dependent.” That sounds very cautious and intelligent, but what does it actually mean? Which data and who’s interpreting it? Let’s ask a few questions. First, how could their policy choices not be data-dependent? The only alternatives would be that they made decisions randomly or that there was an a priori path already determined by previous Fed policymakers that they were forced to comply with. A predetermined path would, of course, eventually be leaked, and then everybody would know the future of Fed policy. Until they changed it. Full Story
As I watched Wednesday's CPI (inflation) number reported by the Commerce Department, I was immediately reminded of that classic scene from legendary WWII flick "Casablanca," where Claude Rains, playing police Captain Renault, shuts down Humphrey Bogart's casino/nightclub with the immortal words, "I shocked—SHOCKED—to find out that gambling is going on in here!" The croupier hands him a wad of bills—"Your winnings, sir"—to which he says, "Oh thank you very much. Now everyone out of here!" Full Story
Gold spiked in January, and looked to be headed even higher. But there were some problems. First, futures speculators – as tracked by the Commitment of Traders (COT) report – had gone overwhelmingly long, and since they tend to be wrong at emotional extremes, this was a red flag. Second, gold was approaching the $1360 level that had, since 2014, been the place where upward momentum went to die. For the relevant charts, see Gold Jumps To Crucial Technical Level. Important Action Coming Up. Full Story
Despite a tough week for stocks into Friday, February 9, three big picture macro indicators have continued to support a risk ‘on’ backdrop. Many of the shorter-term indicators we watch, like Junk bond ratios and the Palladium/Gold ratio say the same thing. Junk/Treasury and Junk/Investment Grade are threatening new highs and as we have noted in NFTRH updates all through the recent market volatility, Palladium (cyclical) got hammered vs. Gold (counter-cyclical), but only to test its major uptrend. Full Story
Stocks have only recently broken above a 20 year long consolidation period. Price may now enter a parabolic phase or be beginning another long term bull market. In either case, this video explains why stocks are not presently in a bubble. Full Story
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