By: Peter Schiff, President and CEO Euro Pacific Capital - 1 June, 2018
For now, the most interesting aspect of the drama is political. In a surprise move, Sergio Mattarella, Italy's largely ceremonial President, exercised one of his few powers to block the formation of the anti-euro coalition government. (J. Horowitz, The NY Times, 5/27/18) Populists howled that the president and his elitist sympathizers are thwarting the will of the people (but that is exactly the point of having a president that is not beholden to the legislature). This move risks an even bigger populist backlash when the Italians go back to the polls in September. If the same coalition emerges, the battle lines will deploy on the same territory. Sooner or later, the guns will start firing. Full Story
At the opening of GATA's Gold Rush 21 conference in Dawson City, Yukon Territory, back in August 2005, our friend, South Africa's "Mister Gold," the late Peter George, was already tired of the brazenness of gold price suppression.
"In the last 10 years," George said, "the central banks have effectively shown that when there is a real crisis, gold actually goes down -- and it's so blatant, it's a joke" Full Story
No doubt you’re aware of the massive fraud uncovered at Theranos, the high tech medical startup purported to be able to run any number of diagnostic tests from a single drop of blood. Theranos was a Silicon Valley upstart valued at $10 billion at its peak and headed by an attractive young woman modeled after the late Steve Jobs. Theranos’ diagnostic machines didn’t work as advertised and the whole fraud, said to be the largest since Enron, was uncovered by a sharp and determined reporter at the Wall Street Journal. The reporter, John Carreyrou, was instrumental in the fraud’s demise. Full Story
Serious gold investors know that May has historically been a weak month for the price of the yellow metal. For the 10-year and 30-year periods, the month delivered negative returns. The general decline in enthusiasm comes before the late summer rally in anticipation of Diwali and the Indian wedding season, when gifts of gold are considered auspicious. In the past, the fifth month has provided an attractive buying opportunity. Full Story
It’s simple math — an equal and opposite reaction. After a long spell of QE took mortgage interest down to the lowest it has ever been, a long spell of QT (quantitative tightening) is going to take it back up again. That’s why I forecasted another housing collapse with confidence last year:
Rising mortgage rates will certainly cause housing sales to fall. Prices will follow for those houses that have to sell because, as mortgage interest rises, people won’t qualify for as large a mortgage as they do now. It’s all part of the developing Epocalypse in which multiple industries collapse into the final depths of the Great Recession as the fake recovery fades out of existence like a mirage. Full Story
I often say it’s not about which party is in power but rather the policies that matter. Whether the Republicans or the Democrats control Washington isn’t the point. There are ways for investors to make money in either case, and right now, government policy favors domestic small-cap stocks that have limited exposure to overseas markets. The trend is your friend, as they say, and with respect to small-caps, that certainly seems to be the case. Full Story
Despite the insistence of some, precious metals have not been in a bull market. After a big pop at the start of 2016, the sector has trended lower. Sure, Gold has traded up towards a major breakout but Silver and the gold stocks have trended lower. When the US Dollar corrected significantly, the stock market outperformed precious metals. Does that sound like a Gold bull market to you? Full Story
I think platinum has actually only been below the price of gold two times or so in the last 30 years and the last one was in the late 1990s or early 2000s and then now, where we are today. So generally platinum's almost like the opposite of gold. Gold thrives on volatility and uncertainty and the price of gold spike in those events, whereas platinum has traditionally thrived in stable economic environments. And one of the big reasons for this is the fact that platinum is a functional commodity, so it's used in building cars primarily. So in good environments, more people are buying cars and we're seeing more platinum be used. Full Story
David Smith: Well in the summer, there can be a double bottom in the miners, almost no matter what's going on with the trend that preceded it. There tends to be a primary bottom in late June, early July. And then the secondary bottom in late August, just before everybody comes back from their European vacations and gets back to the trading desk. And I suspect it'll look like that again this year.
It would not surprise me with the weakness we've seen in physical gold and silver and the demand domestically that we could see an attempt by the floor, so-to-speak, to drive prices down through recognizable support levels in gold and silver on the technical charts and shake out the last of the weak holders. Full Story
“The system of multilateral cooperation, which took years to build, is no longer allowed to evolve. It is being broken in a very crude way. Breaking the rules is becoming the new rule,” he said.
In addition to traditional forms of protectionism such as trade tariffs, technical standards and subsidies, nations are increasingly using new ways to undermine their competition, like unilateral economic sanctions. And nations which thought they would never be targeted by such measures for political reasons are now being proved wrong, Putin said. Full Story
The best performing metal this week was platinum, up 1.50 percent on expected Chinese demand for the metal, where demand for heavy-duty emission legislation will come into play by 2020. Bloomberg’s weekly survey showed that gold traders and analysts are divided on their outlook for bullion prices for next week. The yellow metal rose higher this week amid mounting geopolitical tensions and talks of tariffs on automobile imports. Full Story
First, let’s head off at the pass the objection that the majority of US government debt is held by foreigners. As of March this year, the US Treasury estimates that $6.3 trillion worth of Treasury bills and bonds are owned by foreign holders. This is not even close to the majority of it.
It’s also not the point. The nature of debt is what it is, whether the creditor is the People’s Bank of China or Uncle Ernie who puts 10% of his salary into US Savings Bonds.
The constituency of wrongness is headed by Paul Krugman... Full Story
Oh, for a chance to put critical questions to central bankers at forums where their refusal to reply responsively at least might embarrass them in front of an audience. (Of course that's why such forums are never held.)
That wish was prompted by an address given last week by the general manager of the Bank for International Settlements, Agustin Carstens, at a conference in Stockholm celebrating the 350th anniversary of Sveriges Riksbank, the Swedish central bank. The address is posted at the BIS' internet site... Full Story
Peter Schiff, head of SchiffGold, Euro Pacific Capital, and Euro Pacific Gold Fund (EPGFX) returns with market commentary. Our guest expects fireworks in the gold and silver shares market, as Fed policymakers backpedal on rate hikes. Bob Hoye of Institutional Advisors rejoins the show with comments on the global financial bubble. This could be the most exciting time in 400 years for investors, amid robust economic conditions in US equities as well as industrial commodities. Full Story
While today’s circumstances are different, there are similarities. China replaces Germany as the number one challenge to U.S. global hegemony with the Yuan challenging the supremacy of the U.S. Dollar. China is embarking on the creation of its own version of the World Bank, the IMF, and the SWIFT payments system. The Yuan would be the currency supplanting the U.S. Dollar. China is also embarking on building the new Silk Road that would connect 68 countries, 65% of the world’s population and one-third of global GDP. Full Story
Bloomberg News featured a story today that I find to be an outrage. It seems that some punk kid in Houston – Angelo Christian – has recreated the Jordan Belfort story (“The Wolf Wall Street”) using subprime quality, Government-backed mortgage. The Government now guarantees mortgages which require no money from the buyer’s pocket for a down payment, a 50% DTI (monthly total debt payments = 50% of pre-tax personal income), no income restrictions and will finance down to a 580 credit score. Full Story
For those that are familiar with American football, you would likely understand the strategy that the team that controls the clock usually controls the game. But, what happens if the clock is broken and the game just keeps going and going and going? Well, it is no different than when an analyst makes a claim that the stock market is going to crash, and makes this claim week after week after week, and does this for months or even years on end. Since there is no time limit to the game, eventually, this analyst can “win” the game. Full Story
My still-unfolding Train Wreck series is getting a lot of attention. It’s not exactly good news, but people at least appreciate the warnings. Thanks to all who sent thought-provoking comments. I always consider them carefully. A few readers characterized the crisis I foresee as being a repeat of the 2008 fiasco. That’s partly right, in the sense we will have a painful economic and market downturn, but the causes will be quite different. Full Story
I’ll try to keep things simple with this recap of the 3 of the 5 major food groups (leaving aside commodities and currencies) for investors. No confusing you today with too many inter-market ratios, overly technical language or cute metaphors like the 3 Amigos (although it is notable that Amigo #2 is stopping exactly as we’d forecast, as you’ll see in the Bonds segment below). Full Story
It’s always been understood that corporate executives make a lot more than rank-and-file workers. But the gap between top and bottom was hard to calculate, and therefore hard to turn into media sound bites, so it didn’t play much of a role in the US political process. But this year, for the first time, corporations are being required to calculate and publish a more accurate version their “pay ratio” – what their CEO makes relative to employees. Full Story
The following video is meant to provoke some thinking in the establishment regarding financial planning. Many investors that are fortunate enough to save choose to get help investing their money because they do not want the responsibility and subtly have someone to blame if things go wrong. For years I have approached the Financial Planning Industry only to be given the short shrift, which means even if some planners know how crucial gold is to properly diversify a portfolio almost all in the industry totally ignore gold entirely. Full Story
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