The gloves are off now when it comes to fraudulent data manipulation, as the powers that be will do flat-out anything to disguise the gangrenous cadaver that is the U.S. economy. Sadly, the rot is concentrated among young people. who are now taking on huge amounts of educational debt—debt that cannot be discharged in bankruptcy—that would more properly be called welfare. This situation cannot sustain itself for very long, and won’t.
Basically all of our country’s ills are due to a monetary system predicated on fraudulent interest-bearing debt. Jefferson is rolling in his grave. Full Story
By: Steve St. Angelo, SRSrocco Report - 1 February, 2019
According to the World Gold Council 2018 Yearend Gold Demand Trends, Russia funded most of the 274 metric tons (mt) of its official gold purchases with sales of its U.S. Treasury holdings. Furthermore, the next two countries with the largest increase in gold acquisitions in 2018 were Turkey with 51.5 mt and Kazakhstan at 50.6 mt.
These three central banks accounted for 58% of the total gold purchases last year. However, the World Gold Council stated in their yearend update that several European central banks were also increasing their gold reserves, such as Hungry and Poland. Full Story
By: Peter Schiff, President and CEO Euro Pacific Capital - 1 February, 2019
While some may have been confused by Fed Chairman Powell's circular statements in yesterday's press conference, the takeaway should be abundantly clear: the period of Fed tightening, is over. The Fed will now hold steady on interest rates, and when they move again, they are more likely to lower rates than to raise them. And while the Fed's program of balance sheet reductions is technically still underway, Powell made it clear that the program is no longer on "automatic pilot" and that the $50 billion per month of bond sales will likely diminish, and ultimately, conclude much earlier than anyone had predicted just a few weeks ago. Full Story
Last year was admittedly a tough one for emerging markets. A number of currencies were under considerable pressure, with some of them falling to record or near-record lows against the strong U.S. dollar. Global trade tensions, threats of sanctions, rising U.S. interest rates and higher oil prices—before they began to crater in October, that is—also contributed to the selloff. From its 52-week high set in January 2018, the MSCI Emerging Markets Index sunk into bear market territory by the end of October. Full Story
By: Stefan Gleason, Money Metals - 31 January, 2019
Telfer remarked in 2018, “In my life, gold produced from mines has gone up pretty steadily for 40 years. Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down… We’re right at peak gold here.”
We’ll soon find out whether his call for gold production to fall in 2019 pans out. If it does, the implications for precious metals investors are enormous.
The concept of peak gold is controversial, to be sure. Full Story
Dial in to today. The Fed has rolled over at the direction of the 2yr Treasury yield. The stock market is relief rallying and despite this the gold price is rising and maintaining its constructive stance vs. SPX and many other cyclical, risk ‘on’ markets.
Personally, I am positioned in several quality gold miners and royalty plays (as reviewed each week) but not yet locked and loaded for the really big gains. It sounds like the writing of an old fart, but slow and steady really does win the race. There remain technical resistance obstacles for the gold stock indexes/ETFs, gold and silver. Also, leading indicators like the HUI/Gold ratio have not yet triggered a trend change. Full Story
The Fed’s major course change, then, can only be due to seriously deteriorating economic conditions. The course has downshifted from autumn’s expected 3-4 rate increases in 2019 of its targeted Fed-funds rate to zero interest increases; and it shifted its balance-sheet-reduction from auto-pilot at full speed to manual pilot under a carefully watched speed. Today it doubled down on all of that.
If such a face-losing change of course is due only to economic data, the Fed has surely put us all on economic watch (sort of like hurricane watch or storm watch). After all, auto-pilot was supposed to be as boring as “watching paint dry” according Janet Yellen when she started us down that path. Full Story
By: Steve St. Angelo, SRSrocco Report - 31 January, 2019
As the demand for precious metals shows some life once again, sales of the U.S. Mint Silver Eagles jumped in January. Not only have Gold, and Silver Eagle sales increased, so have the precious metals prices. In the past two months, gold and silver prices have gained 7% and 11% respectively. Today, gold reached $1,320, while silver topped $16. While January sales of Silver Eagles fell to a low last year at 3.2 million oz (Moz), down from 5.1 Moz in 2017, they picked up this month surpassing 4 Moz. According to the U.S. Mint’s most recent update, Silver Eagle sales totaled 4,017,500 versus 3,235,000 last year: Full Story
West Virginia legislator Delegate Pat McGeehan (R-01) has introduced the West Virginia Sound Money Act, House Bill 2684, to eliminate all tax liability on gold and silver in the state.
Following in the footsteps of the Wyoming Legal Tender Act, which passed in Wyoming overwhelmingly last year, the West Virginia Sound Money Act is a similar measure that will remove all taxation against gold and silver, including sales and use tax, property tax, individual income tax, and corporate income tax. Full Story
The mis-pricing of money and credit has also driven a terrible misallocation of capital and kept unproductive zombie debtors alive for too long. Saxo Bank, “Beware The Global Policy Panic”
“Mis-pricing of money and credit” refers to the ability of the Fed to control interest rates and money supply. Humans with character flaws and conflicting motivations performing a role that is best left to a free market. After the market’s attempt in December to re-introduce two-way price discovery to the stock stock market, the Fed appears ready to fold on its “interest rate and balance sheet normalization” policy, whatever “normalization is supposed to mean. Full Story
“The rich” don’t need to be taxed any higher. They and many Americans who make far less than $1 million a year already pay the vast majority of the income taxes that feed the federal leviathan. And not only do “the poor” pay little or no income taxes, they receive tax refunds from the government of money they never paid in via refundable tax credits. I think the problem is rather that the Congress spends too much money. The national debt is not $22 trillion because “the rich” haven’t been taxed enough. Full Story
Two years ago at a conference during which I both presented and attended, a Keynote speaker, "Rich Dad" Robert Kiyosaki, introduced me to a different way of looking at things. He posed the question, "How many sides does a coin have?"
The correct answer is "three." The front (obverse), back (reverse) and… the edge! Full Story
By: James R. Cook, Investment Rarities - 29 January, 2019
Let’s consider some of the many reasons that silver should go up. The fact that JPMorgan has used unsavory tactics to hold the price of this important mineral down has created some powerfully bullish consequences. The historically low price has discouraged mining for silver. Many discoveries have been made that have never been mined because of the low level of profitability. Furthermore, prospecting, drilling and exploring for silver deposits has diminished greatly. A lot less silver has been mined and consequently much less exists above ground. In fact, so little currently exists that a surge of investment buying on top of the existing industrial demand would likely lead to a shortage. Full Story
"THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph." Full Story
Two big questions have been front and center for Fed watchers in recent months...
The first is just how high rates could go before stimulus-addicted markets would falter. The second is whether our central bankers would bow to pressure once markets faltered and politicians began calling for the Fed to resume easy money policies.
Gold finally appears poised to break through $1,300. Friday’s futures closed at $1,298; however, cash gold continued to trade higher closing over $1,300. That suggests that gold should open higher on Monday above $1,300 on the futures. Initial resistance would be up to about $1,320. Firm support held at $1,280. Above $1,320 gold has the potential to rise into the $1,350/$1,370 major resistance zone. We expect the first approach to that zone will be met with stiff resistance and a pullback, possibly a sharp one. Once that is out of the way, we expect that this time gold should break up through major resistance at $1,370 and take out $1,400. Major bottoming patterns suggest that gold has the potential to go eventually as high as $1,725 later this year. However, before we get ahead of ourselves, first things first, and that centers on a move towards $1,350. Support is at $1,280; however, only below $1,250 would we be concerned that something has gone amiss.
With the ending of the shutdown, at least temporarily, we might finally get a COT report. Hope to have one for next week. Our expectations are that the commercials have increased their short position. The question is by how much? Full Story
UBS analysts Giovanni Staunovo and Wayne Gordon wrote in a report this week that gold’s reaction to the stock market volatility in late 2018 has confirmed its role as a safe-haven asset. They write that gold “served investors well as a diversifier… and helped reduce portfolio swings,” and that “these qualities should remain highly relevant for investors this year as the business cycle matures further.” According to SkyBridge Capital, gold could become even more attractive in 2020, as a possible U.S. recession could lead the Fed to loosen monetary policy. Troy Gayseki, senior portfolio manager, told Bloomberg that “it is plausible that the next great monetary easing starts in later 2020, which of course would be very supportive for precious metals.” Full Story
As reviewed in the previous analysis in this series, which is linked here, the United States has experienced 34 cycles of expansion and recession since 1854. As explored in that analysis, the business cycle is an extremely reliable night and day cycle.
The sun has gone down 34 times, with those sunsets being the onsets of recessions. The sun has come up 34 times, with those sunrises being the beginnings of the expansions. Full Story
We are in the end time of an unprecedented era of financial expansion — the greatest expansion of the world’s money supply ever attempted, expansion of the Federal Reserve’s vast and unchecked powers far beyond what the Fed could do before the financial crisis, and super-sizing expansion of banks that were already way too big to fail.
I am calling this time in which we are now unwinding this monetary expansion the Great Recovery Rewind because I believe this attempt by the Federal Reserve and other central banks of the world to move us away from crisis banking is taking us right back into economic crisis. That is why this was the top peril listed in my Premier Post, “2019 Economic Headwinds Look Like Storm of the Century.” It is more potent in possible perils than all the trade tariffs in the world. Full Story
By: Keith Weiner, Monetary Metals - 28 January, 2019
We define inflation as the counterfeiting of credit. That is, fraudulently taking money from a saver. It is called borrowing, but the borrower hasn’t got the means or intent to repay. Additionally, when everyone thinks that the government’s debt paper is money, the saver doesn’t even know or consent to the borrowing.
There are lies, damn lies, and statistics. Then there are a few pugnacious, in your face, gaslighting make-you-believe-in-unreality cargo cults. We will explore this in full, below.
During World War II, the US military set up operations on certain Pacific islands. They built landing strips, where they landed planes bringing in supplies and men. They hired the local tribesmen as labor, and paid them stuff that was ordinary to Americans, but wondrous to the islanders. Like canned food. The islanders really looked forward to when a plane would land, and they would get some cargo. Full Story
There is an old adage in the market which says that "everyone is a genius in a bull market." What that really means is that as long as you keep looking to the long side in a bull market, you will be seen as a genius.
But, remember, one of the main perquisites for maintaining "genius" status is that we must be in a "bull market." So, how do you know when a bull market is coming to an end? Full Story
It is very significant that projections of a dovish Fed are in play, if the post-2015 relationship between financial markets and Fed policy is to hold true. From 2008 to 2015 the Bernanke Fed (w/ one year of Yellen) blighted financial markets, inflicting the ZIRP abomination as asset owners (including owners of stock certificates) were enriched while the real economy was drained (real savings is a necessary component of a real economy). Before and after the ZIRP era, the Fed Funds rate was positively correlated to stocks. Full Story
First it was the loudly broadcast convening of the Working Group on Financial Markets – aka “the Plunge Protection Team” – by the PPT’s el Jefe, Steven Mnuchin. This was followed the “mouse that roared” speech from Fed head, Jerome Powell, hinting that the Fed would moon-walk away from rate hikes.
Today was trial Hindenburg launched by the Wall St Journal suggesting that the Fed was considering curtailing the the FOMC’s balance sheet Weight Watchers program. The terminology used to describe the Fed’s actions is Orwellian vernacular. “Reserve levels” – as in, “leaving more reserves on the Fed’s balance sheet” – sounds mundane. In plain-speak, this is simply the amount of money the Fed printed and will leave in the financial system or risk crashing the stock market. Full Story
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