The U.S. is $22 trillion in debt and burdened with $100 – $200 trillion more in unfunded liabilities. Just to pay the interest the U.S. must borrow. Debt is rapidly rising and cannot be paid unless “they” default or hyper-inflate the dollar.
Chairman Jerome Powell stated, “The U.S. federal government is on an unsustainable path.” Even the Fed admits what everyone should realize. Global debt is $250 trillion... Full Story
It’s hard to believe an educated person wrote that commentary (“Gold Prices Sink To 4-Month Low On Scant Risk Aversion” by Jim Wycoff). Honestly, that headline makes me chuckle. Well then, Jim, the Dow is now up 153 points as I write this 5 hours later, which by your logic would imply there’s even less risk aversion than the “scant” risk aversion at 8:39 a.m. How come, Jim, the price of gold rebounded to the level where it was trading when fear of “scant” risk aversion triggered someone to unload 16 tons of paper gold in less than 60 seconds if indeed fear of scant risk aversion was the catalyst for sell order? Full Story
Mainstream economics has one word to refer to rising prices, due to either cause. Inflation. And this biases gold analysis. If inflation is affecting the price of coffee in Seattle, then why isn’t it affecting the price of gold? The answer is simple, now that we have two clear concepts.
Inflation in this falling-interest rate cycle, is not monetary. Monetary forces are pushing prices down (due to falling interest rates). So if prices are rising, they are rising due to the increasing burden of useless ingredients.
But all the gold ever mind in human history is still in human hands. No one has the power to add useless ingredients to gold. So the price of gold does not go up from this cause.
This is one more reason why gold is the best way to measure declines in the dollar.. Full Story
That is precisely why Warren’s latest soak-the-rich scheme flunks freshman economics: It fails, even, to acknowledge incentives, let alone understand how they produce wealth. It also neglects to consider the bad signal it will send to those who have collectively borrowed more than $1.5 trillion to pay for college, as well as students who might conceivably borrow in the future. Full Story
One thing that always struck me as odd about both reports is the absolute precision implied about silver production and consumption in that there is hardly any rounding off (as I suppose I am inclined to do) – all data are reported to within 100,000 ounces or less. This strikes me as a bit odd for a market in which total production and consumption amount to one billion ounces annually. It gives the impression of precision almost to the point of infallibility. Yet in the category where one would assume the greater precision, annual mine production (as opposed to consumption), the difference between the two reports is quite wide. Full Story
The “money supply” number as provided by official Federal Reserve statistics, it turns out, is not the true money supply. The fractional banking system allows banks to lend money on its reserve capital at a rate of 90 cents for every $1 of reserve capital. Technically, a loan is not considered “money creation” because of the legal provision that a loan has to be paid back. Because of this legal “glitch,” the creation of credit is not considered to be part of the money supply. Full Story
Golds continue to do as we expected as they work their way lower towards potential targets down to $1,250. We note that the gold stocks as represented by the Gold Bugs Index (HUI) and the TSX Gold Index (TGD) broke down this past week. The HUI lost 4.7% while the TGD fell 3.5%. Both are now in negative territory for the year. What is concerning is that they both appear to have fallen below small top patterns. The HUI projects down to 144 while the TGD projects down to 171, a decline of roughly 9% from current levels. Our preference would have been for the gold stocks to lead.
Nonetheless, there are some positives. We note silver was flat this past week even as gold fell 1.5%. Gold has made new lows for the current move while silver has not. This is a potentially positive divergence. The commercial COT for both gold and silver jumped this past week with the gold commercial COT rising to 39% from 33% and the silver commercial COT jumping to 44% from 40%. While gold’s long open interest jumped higher more significantly the short open interest fell sharply, suggesting the commercials are covering shorts on this decline. For silver, long open interest rose even as short open interest remain relatively unchanged. Neither are at levels we would consider super bullish but the direction is positive and fits with our belief that once this down wave is complete, we could embark on a strong rally. Full Story
By: Chris Waltzek, GoldSeek Radio - 22 April, 2019
- Harry S. Dent Jr. brings fresh insights on the US financial markets in his latest appearance. - US equities remain one of a handful of stock bourses to make set new records since 2018. - The stock market resiliency may be due in part to approximately $16 trillion of monetary-stimulus. - Excessive liquidity injections could foment an epic financial bubble crescendo, culminating with Nasdaq 10,000. Full Story
Inflationary pressures are backing off, but deflationary pressure is more indicative of a recession than inflation as deflation happens when demand recedes and growth stalls. Lower inflation also presses the Fed back to interest reduction and more quantitative easing, which it doesn’t want to do, lest it underscore the fact that we are stuck forever in money-printing mode just to hold against a receding tide, and where the Fed doesn’t have much room to move. Full Story
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