By: Stefan Gleason, Money Metals Exchange - 12 April, 2019
As gold and silver markets continue in choppy trading this spring, bulls are hoping a dovish Fed will sink the dollar and lift the metals.
Now that the Federal Reserve is on “pause” – presumably for the rest of 2019 – perhaps investors can stop obsessing over interest rate decisions by central planners. Perhaps markets can finally trade based on actual market signals and underlying fundamentals.
I want to end by sharing some excellent news from Metals Focus. The London-based commodities research group just released the 2019 edition of its widely-read Gold Focus report, and the big news is that global gold demand will climb to its highest level in four years. The uptick is expected to be driven by an increase in jewelry fabrication, with India, China and Italy leading consumption higher. Full Story
If the American people fail to stand for Julian, then the nation – in time – will be truly lost, and it won’t be because of the horrors of a financialized economy and a paper currency alone.
Without open debate conducted under the auspices of a universally-supported First Amendment, the walls of what Americans thought was liberty’s fortress will crumble. The surveillance economy will prosper and eventually collapse into a dystopian reality.
I can’t say the inattentive and endlessly bickering Americans deserve better, but their posterity certainly does. Full Story
You are no doubt hearing quite a bit today about the arrest and likely extradition of Wikileaks publisher Julian Assange, who was literally sold out for the proverbial 30 pieces of silver (or in this case it was a $4.2 billion IMF loan to Ecuador approved just last month)! Vice President Mike Pence was in Ecuador last June to push a quid pro quo with the recently elected Ecuadorian president, Lenin Moreno: You hand us Assange and we'll make sure you get your loan. Full Story
So, the real danger for the Middle East will occur when oil production peaks and declines while domestic consumption continues to increase. This will be a double-edged sword for the Middle Eastern Governments as they will be forced to cut public spending as oil revenues fall. Full Story
The H&S was not my thing. I tend not to get overly excited about short-term patterns and surely do not announce them far and wide to stir people up. It was a product of the gold community, some members of which have been flipping in head spinning fashion between bullish and bearish views. I note it again because I don’t want that stink on me. The upside and downside parameters above were my stuff.
Per the NFTRH Trade Log, I shorted a chunk of GLD yesterday (while remaining long gold stocks and even more so, cyclical assets on balance) as gold poked the SMA 50 per the Futures chart below. Gold’s pullback today was not engineered by the Fed or da Boyz or da PPT, PtB, Trump, Mnuchin or some nefarious super algo. It’s normal. Okay conspiracy mongers? N.O.R.M.A.L. Full Story
Whatever the reason, history is clear. Around major bottoms in precious metals, Platinum tends to outperform and lead Gold. Since February Platinum has strongly outperformed Gold while registering an important positive divergence.
We will certainly keep abreast of the other leading indicators such as relative performance of the miners, Fed policy, a steepening yield curve and precious metals performance against the stock market. We will also keep an eye on Platinum as continued outperformance would be a strongly bullish signal for Gold for 2020 and beyond.
The weeks and months ahead should continue to be an especially opportune time to position yourself in this sector. Full Story
By: Richard (Rick) Mills, Ahead of the herd - 10 April, 2019
Gold is often criticized by Wall Street as being kind of a useless investment.
Institutional investors tend to prefer investments that are thought to contain the potential for growth, growth = sprouts. An investment has to produce a growing revenue stream - if it doesn’t grow it doesn’t compound. Gold is rejected as an investment because it doesn’t produce sprouts, meaning the steady income and systematic growth so sought after by institutional investors just isn’t there.
But gold performs two jobs that fiat currencies, or any other financial innovation, cannot do... Full Story
Inventories of all categories of semiconductors are extremely high because the demand for the end-user products (smartphones, autos, electronics) is plummeting, which means the inventory of those products is soaring as end-user demand contracts. The best news is for shorts looking for contrarian signals is that Cramer has been on his CNBC show recently pounding the table on chip stocks. This can only mean that his Wall Street sources are trying to move big blocks of stock out of their best institutional clients. Full Story
During the course of the past few weeks, we have heard much about the inverted yield curve in three-month and ten-year Treasuries as a harbinger of recessions. Missed in the press reports is the fact that it has also been a harbinger of higher gold prices. In the chart above, please note the upward surges in the price of gold in the five-year periods following the two most recent yield inversions in 2000 and 2006. The first occurred with gold trading in the $300 range. It subsequently rose to the $600-650 level in 2006. The second occurred with gold priced in the $600-650 range. It subsequently rose to over $1900 per ounce in 2011 – its all-time high.
“Ominously,” writes Robin Wigglesworth and Joe Rennison in a recent Financial Times editorial, “the US yield curve has now inverted once again, with the 10-year Treasury yield on March 22 dipping below the three-month T-bill yield for the first time since 2007. Combined with the length of the post-crisis expansion — this summer it will become the longest growth spurt in US history — and deteriorating economic data, the inverted yield curve has stirred fears that the countdown to the next downturn has already begun.” Full Story
It may be a question of timing; if a number of the top six currencies collapsed at once then gold could well be the last man standing and become a fallback position during a period of utter economic and social carnage. However, if one of the top currencies failed then business would quickly move to conduct trade in another currency. This would be an inconvenience but not a disaster.
The possibility of one Fiat currency failing exists, but for the majority to all fail simultaneously is a remote a possibility and therefore would not cause us to edit our portfolio.
Fear is an ugly thing and can bring too much negativity into our lives, our thinking, and our investing... Full Story
VXXB has witnessed a decline of over 45% since the highs that were struck in December and into the most recent lows. This 45% move has not come in a straight line as we have seen several strong upward moves during the decline. None of these moves have seen much follow-through however and ended up merely being corrective waves in a much more significant drop to lower levels. Full Story
Zero Interest Rate Policy (ZIRP) helped the banks rebuild their balance sheets as they borrowed vast amounts of money from the Fed for free and used it to buy Treasuries yielding 2-3%. And they took full advantage of QE by dumping huge quantities of toxic mortgage backed securities on the Fed.
Bankers love inflation because they can make sure they are first in line as the troughs fill with freshly printed cash. The last decade was MMT-lite, and they loved it. It is no surprise whatsoever they are eager now to get the party started with full-blown MMT. Full Story
Ronald-Peter Stoeferle, managing partner at Incrementum AG, says that gold is poised to rally to $1,450 to $1,500 per ounce by year end if it breaks through the $1,360 to $1,380 per ounce resistance level. Stoeferle says that one of the drivers will be demand from pension funds, high-net worth individuals and wealth managers. Bloomberg writes that Stoeferle also cities his fund’s own inflation indicator to support his bullish gold view, which is currently showing increasing momentum. Goldman Sachs is also bullish on the yellow metals as it expects a rebound in ETF holdings to continue due to late-cycle worries and negative German 10-year real rates. Full Story
Central banks also play a role in the rise of stocks markets over the past several years. The massive injection of liquidity through quantitative easing (QE) from the Federal Reserve, the ECB, and the BOJ has seen their balance sheets explode from just over $3 trillion back in 2007 to roughly $14 trillion in 2019. As the chart below demonstrates, the S&P 500 rose almost in lockstep with the rise in the Fed’s balance sheet. As reductions began that eventually moved from QE to QT, the S&P 500 and other markets faltered. Given the anticipation that surrounded the announcement from the Fed of no more interest rate hikes, coupled with the ending of QT, the stock market has been rising since.
Despite all this liquidity that has been poured into markets over the past several years, GDP growth has been largely below previous recovery periods. Now the global economy is beginning to falter and central banks around the world are noticing it and have expressed a higher level of concern. The world economy is expected to grow only 3.3% in 2019, according to forecasts from the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD). (See the chart below.) The Fed has expressed its concern by becoming more dovish. Interest rate hikes for 2019 have been dropped and, as noted, QT ends in September. Full Story
What I really want to do is utterly destroy the Federal Reserve’s unmerited credibility and, with that, its centralized planning and manipulation of the global economy as well as its rigging of stock and bond markets. I want to see Capitalism rise again from the Fed’s ashes. To that more important goal, I think a big, fat recession in 2019 could be the best thing that every happened, even though it would be the worst thing that ever happened.
So, bet on the Goliath Fed, or bet on this little David. The Federal Reserve went down hard last year even as each of my little stones hit their mark (stock-market crash, Carmageddon, Retail Apocalypse, and Housing downturn). So, the Fed bears some disgrace by lying flat on its face already. Now, it’s time to cut off its head, which it will do for me when the 2019 recession starts to undo the whole well-Fed world, and Father Fed is helpless to prevent it. Full Story
Six Other States Now Weighing Their Own Bills to End Taxes on Gold & Silver Before the ink could even dry on West Virginia Governor Jim Justice’s signature on a repeal of sales taxation on gold, silver, platinum, and palladium bullion and coins, legislators in Wisconsin and Maine introduced similar measures in their own states.
All told, 39 states have now reduced or eliminated sales taxes on the monetary metals, and Wisconsin, Maine, Kansas, Arkansas, Minnesota, and Tennessee are all actively considering bills of their own this month. Full Story
By: Richard (Rick) Mills, Ahead of the herd - 8 April, 2019
Mining is all around us, though invisible to urban dwellers, so it’s easy to forget that we live in a world of finite resources. Unlike forestry or agriculture, whose crops are renewable, once ore comes out of the ground and is processed into metals, it’s gone for good. Some industrial metals are recycled after mining, like copper, but this only extends the life of the resource; it doesn’t renew it.
We know this intuitively, yet we continue to mine. The reason, of course, is because we need the materials, and companies with the expertise and money are eager to prospect and extract, especially high-value minerals like diamonds, battery metals and heavy rare earths.
We are facing a supply crunch for copper, zinc and lead - all crucial to the functioning of a modern economy. Imagine a world without copper? Full Story
By: John Mauldin, Thoughts from the Frontline - 8 April, 2019
- Unwise Investment - Zombie Companies - Gummed-Up Economy - Uncreative Destruction - The Drive for Scale - Helicopter Governments - Cleveland, Chicago, Dallas, and SIC Full Story
Under “modern monetary theory,” currency is a public monopoly for the government, and unemployment is evidence that the monopoly is choking off the needed supply. So print the money necessary to get to rising wages, full employment and a booming economy.
To achieve Bernie Sanders’ Socialist America, the filibuster would have to be abolished, easily done, and the Constitution altered, requiring the support of three-fourths of the states, not so easy. Full Story
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