Economics

Economics
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Updated: 4 hours 35 min ago

VICTORY IS OURS: Gold & Silver REFUSE to Drop a Handle

22-Sep-2017

Silver Doctors Friday Wrap: Sure, they have succeeded in smashing price lower on the week, but gold & silver refuse to drop a handle! WE GET THE VICTORY, and that will bother them even more than today’s closing prices…

First this (queue Rocky theme song):

 

 

Gold ain’t having $1200 and silver says get that $16 outta here!

Both precious metals hold, and close on the day both higher and above the key whole numbers.

Last Friday we put out this very scary silver chart:

 

 

It turned out to not be that scary of a movie at all. It was more like your typical teen-age slasher flick.

Still, it was pretty disgusting to watch:

 

 

In the above chart, it is easy to see that more and more selling volume is needed to keep the silver price suppressed. So far, 2017 has been nothing more than a monkey-hammering on the weekly, but looking at the volume of the last few weeks, compared to the last price attack, and compared to the attack before that, it looks like the volume is ready to pick up even more from here, but the more paper that gets thrown at silver, the more they can only get sideways choppy price action.

Here’s what the volume looked like as they knocked exactly $1.00 off the price from the high to the low. The cartel was smashing the juice out of the hamburger all week long:

 

 

 

Let’s just do some quick math. Pick your premium, we’ll go with $.50 on some generic (even though SD Bullion had new generic rounds for $.39 over spot all week).

An investor who spends $1000 on physical silver:

$1000 spent with a spot price of $17.87, [1000 / (17.87 + .50)] could purchase 54.43 ounces of silver.

$1000 spent with a spot price of $16.87, [1000 / (16.87 + .50)] could purchase 57.57 ounces of silver.

Said differently:

An investor who bought the dip this week was able to buy 5.75% more silver thanks to the desperate silver price suppression. 

The good news is that there is reason to be optimistic with the silver price moving forward. There are still two weeks left before the non-farm payrolls report, which Eric Sprott said are one of the two main price smashing events that the manipulators look forward too. We happen to agree with that. Since we’ve got a couple weeks until then, we could see a nice silver price rise over the next couple of weeks.

Either way, The take-downs dips just mean we can get more bang for our US debt based fiat currency buck. 

Recall that for the month of August, the amount of paper gold trading was off the charts. It stands to reason that the cartel would be throwing a bunch of paper at gold too on FOMC day, and sure enough, they did not disappoint.

The volume in the gold smash post-FOMC was quite impressive:

 

 

If anybody wants to do the math on how much “gold” was “traded” post-FOMC, here’s a spoiler: It was $3,287,500,000 in paper gold.

Gold continues to look worrisome. We have been rooting for the silver price to catch-up to the gold price, but more and more, it’s looking like the gold price could pull-back to the silver price on the analog in terms of performance and closing of the divergence.

Especially with this little bad omen:

 

 

All year long, if the gold price has stayed above the 50-day moving average (end of January and again in early August), price has recovered. But, and it’s a big but, if the gold price falls below the 50-day, we have gone lower before recovering in price.

 Of course, we could totally blow that call, but here’s a close up of the 50-day to see just how critical that blue line is:

 

 

The gold cartel sees this exact same line, and they know what the significance of it is. In the short term, a break down in price would be more of the same old frustrating stuff, but, it is good news for us as this is a line in the sand for the cartel, and they don’t really know if they want to cross it.

If gold comes down in price to converge with silver on this latest price smash:

 

 

Then when price recovers, silver is poised to outpace gold on the upside. That is the problem the cartel has right now. Said differently, they can win the short term battle for the 50-day, and they can push the gold price temporarily lower, but they will back themselves into a corner because they will have set-up silver for the lead on the next move.

Ahh, the beauty of being backed into a corner. Not team Gold & Silver Community, but team Precious Metals Price Suppression. They are backed into a corner. They can’t win the long-term no matter what they try, and if they push gold down to silver, will they then simply send both metals even lower? They may be full of hubris, but their vaults are not full of gold and silver.

Most likely playing the short game on the gold price, by smashing the percentage move to fall down to silver, this would set-up their only move left on this chess-board if they are to keep the precious metals prices down. If their move is then to smash the price of both metals with the intentions of keeping silver from taking the lead, they seriously risk blowing up the physical market because there is a price where buyers will storm into the retail coin market with a fury. This is a fury from which the cartel may never recover.

The question is, what’s that price in silver? $16.50? $15.50? What about gold? $1275? $1225?

This is why we get the moral victory this week. It’s not about getting a trophy for second place either. We get the moral victory because we know the cartel has no chance of winning this race. They are out of gas, the engine is smoking, and they just blew a tire, just at the time we’re fresh out of a pit-stop.

The dollar looks to be running out of steam if this channel going back over the last three months is any indication:

 

 

Notice how we drew that resistance line. It is very generous. in reality, the drop could be even more imminent if we had lowered the line to very short term tops back in mid-August and then just a couple weeks ago in early September.

Regardless, as has been the case all year, the trend has not been full of sharp declines in the dollar, but rather, just a slow-grind down. This is indicative of a bear market, meaning the dollar could weaken from here. In bear markets, the sharp moves are to the upside (assuming we’re not talking about an all-out crash, which is not out of the realm of possibility either). Conversely, when the sharp moves are to the downside, such as with gold and silver since bottoming at the end of 2015, that is the generally viewed as a tell-tale technical chart pattern of a bull market.

The yield on the US Treasury 10-Year Note has risen for 10 of the last 11 days:

 

 

On top of that, the yield is starting to roll over and fall, even though yield may be closing higher at the end of the day. If you’re looking for higher yields, that’s not a good sign. As Yellen succeeded in flattening yield curve post-FOMC, and as the Fed decided to hold on interest rates, for now, the only go-to tool is once again to “jawboning” because they have only “talked” about “balance sheet normalization”, but the Fed has literally done nothing. Treasury yields are not buying the “interest rate hiking cycle” meme.

Crude oil continues to show that it is slowly but surely rising after bottoming in early 2016:

 

 

We are only beginning to see the effects of all the natural disasters and how it relates to the price of oil, and the various oil derived ground level products such as diesel and gas. If demand has been stable to low for years, one can only imagine demand would have to go up.

Just like a car requires more fuel to start from a stop and get up to highway speed, once it’s up to speed it is more efficient and requires less fuel. Well, zooming out and thinking not about a car but about, say, an island like Puerto Rico, which has been thrust back into the 18th Century, on a fundamental and technical level, the island must get up to speed from a stand still. Now add in the rest of the Caribbean, Florida, parts of Georgia and South Carolina, Texas, Parts of Louisiana, Central Mexico, Southern Mexico, and any other place in North American that has been affected by Mother Nature, and we can clearly see that vast areas of developed, power grid requiring land must get up to speed from a stand still. Just like our car, all of those places are going to need more fuel to do it.

Copper seems to catch Mother Nature’s drift, and looks like to be signaling a reversal on the weekly:

 

 

For the copper bears out there, this is was not a good week. The price action on the chart is holding. As we talked about bull markets having scary pull-backs, copper certainly had one over the last couple of weeks. This week the price action was all over the board, but copper has closed up slightly on the week. Perhaps a bullish reversal is shaping up? Regardless, volume has been slowly picking up all year.

The iPhone 8 has nothing on the new American Palladium Eagle:

 

 

Now might be about the lowest price the Palladium Eagle will be, in a way that people kick themselves in the foot for not being gold or silver buyers back in the year 2000. That channel looks a lot like the US dollar channel with one striking difference: Palladium is riding into town on a bull!

Could palladium dip from here? Of course, but there is no mistaking it, this long-term super-cycle precious metals bull market is on!

Slow and steady wins the race, and palladium has already dipped outside of the channel, so it could start picking back up as early as next week.

Here’s the MSM approved question of the week:

Where’s the line? Apple’s #iPhone8 & #iPhone8Plus are being released today…but where are all the @Apple fans? Thoughts? @ABC7 pic.twitter.com/P1UZZlceYh

— Chelsea Edwards (@abc7chelsea) September 22, 2017

The line is on that chart below. Just don’t look for them to ask what it means:

 

 

probably nothing…

 

 

 

 

 

The Demise of the Dollar: Don’t Hold Your Breath

22-Sep-2017

The demise of the U.S. dollar has been a staple of the financial media for decades. The latest buzzword making the rounds is de-dollarization, which describes the move away from USD in global payments.

De-dollarization is often equated with the demise of the dollar, but this reflects a fundamental misunderstanding of the currency markets.

Look, I get it: the U.S. dollar arouses emotions because it’s widely seen as one of the more potent tools of U.S. hegemony. Lots of people are hoping for the demise of the dollar, for all sorts of reasons that have nothing to do with the actual flow of currencies or the role of currencies in the global economy and foreign exchange (FX) markets.

So there is a large built-in audience for any claim that the dollar is on its deathbed.

I understand the emotional appeal of this, but investors and traders can’t afford to make decisions on the emotional appeal of superficial claims–not just in the FX markets, but in any markets.

So let’s ground the discussion of the demise of the USD in some basic fundamentals. Now would be a good time to refill your beverage/drip-bag because we’re going to cover some dynamics that require both emotional detachment and focus.

First, forget what currency we’re talking about. If the USD raises your hackles, then substitute quatloos for USD.

There are three basic uses for currency:

1. International payments. This can be thought of as flow: if I buy a load of bat guano and the seller demands payment in quatloos, I convert my USD to quatloos–a process that is essentially real-time–render payment, and I’m done with the FX part of the transaction.

It doesn’t matter what currency I start with or what currency I convert my payment into to satisfy the seller–I only hold that currency long enough to complete the transaction: a matter of seconds.

If sellers demand I use quatloos, pesos, rubles or RMB for those few moments, the only thing that matters is the availability of the currency and the exchange rate in those few moments.

2. Foreign reserves. Nation-states keep reserves for a variety of reasons, one being to support their own currency if imbalances occur that push their currency in unwanted directions.

The only nations that don’t need to hold much in the way of currency reserves are those that issue a reserve currency–a so-called “hard currency” that is stable enough and issued in sufficient size to be worth holding in reserve.

3. Debt. Everybody loves to borrow money. We know this because global debt keeps rising at a phenomenal rate, in every sector: government (public), corporate and household (private sectors).(see chart below)

Every form of credit/debt is denominated in a currency. A Japanese bond is denominated in yen, for example. The bond is purchased with yen, the interest is paid in yen, and the coupon paid at maturity is in yen.

What gets tricky is debt denominated in some other currency. Let’s say I take out a loan denominated in quatloos. The current exchange rates between USD and quatloos is 1 to 1: parity. So far so good. I convert 100 USD to 100 quatloos every month to make the principal and interest payment of 100 quatloos.

Then some sort of kerfuffle occurs in the FX markets, and suddenly it takes 2 USD to buy 1 quatloo. Oops: my loan payments just doubled. Where it once only cost 100 USD to service my loan denominated in quatloos, now it takes $200 to make my payment in quatloos. Ouch.

Notice the difference between payments, reserves and debt: payments/flows are transitory, reserves and debt are not. What happens in flows is transitory: supply and demand for currencies in this moment fluctuate, but flows are so enormous–trillions of units of currency every day–that flows don’t affect the value or any currency much.

FX markets typically move in increments of 1/100 of a percentage point. So flows don’t matter much. De-dollarization of flows is pretty much a non-issue.

What matters is demand for currencies that is enduring: reserves and debt.The same 100 quatloos can be used hundreds of times daily in payment flows; buyers and sellers only need the quatloos for a few seconds to complete the conversion and payment.

But those needing quatloos for reserves or to pay long-term debts need quatloos to hold. The 100 quatloos held in reserve essentially disappear from the available supply of quatloos.

Another source of confusion is trade flows. If the U.S. buys more stuff from China than China buys from the U.S., goods flow from China to the U.S. and U.S. dollars flow to China.

As China’s trade surplus continues, the USD just keep piling up. What to do with all these billions of USD? One option is to buy U.S. Treasury bonds (debt denominated in dollars), as that is a vast, liquid market with plenty of demand and supply. Another is to buy some other USD-denominated assets, such as apartment buildings in Seattle.

This is the source of the petro-dollar trade. All the oil/gas that’s imported into the U.S. is matched by a flow of USD to the oil-exporting nations, who then have to do something with the steadily increasing pile of USD.

Note what happens to countries using gold as their currency when they run large, sustained trade deficits. All their gold is soon transferred overseas to pay for their imports. So any nation using gold as a currency can’t run trade deficits, lest their gold drain away.

Nations aspiring to issue a reserve currency have the opposite problem. They need enough fresh currency to inject into the global FX markets to supply those wanting to hold their currency in reserve.

This means any nation running structural trade surpluses will have difficulty issuing a reserve currency. Nations shipping goods and services overseas in surplus end up with a bunch of foreign currencies–whatever currencies their trading partners issue. This is opposite of the global markets need, i.e. a surplus (supply) of the reserve currency.

Any nation that wants to issue a reserve currency has to emit enough currency into the global economy to supply the demand for reserves. One way to get that currency into the global system is run trade deficits, as the world effectively trades its goods and services in exchange for the currency.

A reserve currency cannot be pegged; it must float freely on the global FX exchange. China’s currency, the RMB, is informally pegged to the USD; it doesn’t float freely according to supply and demand on global FX markets.

Nobody wants to hold a currency that can be devalued overnight by some central authority. The only security in the realm of currencies is the transparent FX market, which is large enough that it’s difficult to manipulate for long.

(Global FX markets trade trillions of dollars, yen, RMB and euros daily.)

This is why China isn’t keen on allowing its currency to float. Once you let your currency float, you lose control of its exchange rate/value. The value of every floating currency is set by supply and demand, period. No pegs, no “official” rate, just supply and demand.

If traders lose faith in your economy, your ability to service debt, etc., your currency crashes.

So let’s look at currency flows, reserves and debt. In terms of currencies used for payments, the euro and USD are in rough parity. Note the tiny slice of payments made in RMB/yuan. This suggests 1) low demand for RMB and/or 2) limited supply of RMB in FX markets.

The USD is still the dominant reserve currency, despite decades of diversification. Global reserves (allocated and unallocated) are over $12 trillion. Note that China’s RMB doesn’t even show up in allocated reserves–it’s a non-player because it’s pegged to the USD. Why hold RMB when the peg can be changed at will? It’s lower risk to just hold USD.

While total global debt denominated in USD is about $50 trillion, the majority of this is domestic, i.e. within the U.S. economy. $11 trillion has been issued to non-banks outside the U.S., including developed and emerging market debt:

According to the BIS, if we include off-balance sheet debt instruments, this external debt is more like $22 trillion. FX swaps and forwards: missing global debt?

Every day, trillions of dollars are borrowed and lent in various currencies. Many deals take place in the cash market, through loans and securities. But foreign exchange (FX) derivatives, mainly FX swaps, currency swaps and the closely related forwards, also create debt-like obligations. For the US dollar alone, contracts worth tens of trillions of dollars stand open and trillions change hands daily. And yet one cannot find these amounts on balance sheets. This debt is, in effect, missing.

The debt remains obscured from view. Accounting conventions leave it mostly off-balance sheet, as a derivative, even though it is in effect a secured loan with principal to be repaid in full at maturity. Only footnotes to the accounts report it.

Focusing on the dominant dollar segment, we estimate that non-bank borrowers outside the United States have very large off-balance sheet dollar obligations in FX forwards and currency swaps. They are of a size similar to, and probably exceeding, the $10.7 trillion of on-balance sheet debt.

So let’s wrap this up. To understand any of this, we have to start with Triffin’s Paradox, a topic I’ve addressed numerous times here. The idea is straightforward: every currency serves two different audiences, the domestic economy and the FX/global economy. The needs and priorities of each are worlds apart, so no currency can meet the conflicting demands of domestic and global users.

Understanding the “Exorbitant Privilege” of the U.S. Dollar (November 19, 2012)

So if a nation refuses to float its currency for domestic reasons, it can’t issue a reserve currency. Period.

If a nation runs trade surpluses, it has few means to emit enough currency into the FX market to fulfill all three needs: payment, reserves and debt.

As for replacing the USD with a currency convertible to gold: first, the issuer would need to emit trillions for the use of its domestic economy and global trade (let’s say $7 trillion as an estimate). Then it would need to issue roughly $6 trillion for reserves held by other nations, and then another $11 trillion (or maybe $22 trillion) for those who wish to replace their USD-denominated debt with debt denominated in the new gold-backed currency.

source

So that’s at least $24 trillion required to replace the USD in global markets, roughly three times the current value of all the gold in existence. Given the difficulty in acquiring more than a small percentage of available gold to back the new currency, this seems like a bridge too far, even if gold went to $10,000 per ounce.

Personally, I would like to see a free-floating completely convertible-to-gold currency. Such a currency need not be issued by a nation-state; a private gold fund could issue such a currency. Such a currency would fill a strong demand for a truly “hard” currency. The point here is that such a currency would have difficulty becoming a reserve currency and replacing the USD in the global credit market.

Issuing a reserve currency makes heavy demands on the issuing nation. Many observers feel the benefits are outweighed by the costs. Be that as it may, the problem of replacing the USD in all its roles is that no other issuer has a large enough economy and is willing to shoulder the risks and burdens of issuing a free-floating currency in sufficient size to meet global demands.

Of related interest:

How Dangerous Is Emerging Markets Dollar Debt?

$10.5 trillion in dollar-denominated debt

The Fed’s Global Dollar Problem Borrowers around the world have gone on a dollar binge. This makes them vulnerable when interest rates rise. 

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Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms

22-Sep-2017

– £1 trillion crisis looms as pensions deficit and consumer loans snowball out of control
– UK pensions deficit soared by £100B to £710B, last month
– £200B unsecured consumer credit “time bomb” warn FCA
– 8.3 million people in UK with debt problems
– 2.2 million people in UK are in financial distress
– ‘President Trump land’ there is a savings gap of $70 trillion
– Global problem as pensions gap of developed countries growing by $28B per day

Editor: Mark O’Byrne

There is a £1 trillion debt time bomb hanging over the United Kingdom. We are nearing the end of the timebomb’s long fuse and it looks set to explode in the coming months.

No one knows how to diffuse the £1 trillion bomb and who should be taking responsibility. It is made up of two major components.

  • £710 billion is the terrifying size of the UK pensions deficit
  • £200 billion is the amount of dynamite in the consumer credit time bomb

How did the sovereign nation that is the United Kingdom of Great Britain and Northern Ireland get itself so deep in the red?

This is not a problem that is bore only by the Brits. In the rest of the developed world a $70 trillion pensions deficit hangs heavy.

We are all in this boat because we apparently didn’t learn from the massive man made crisis that was the 2008 financial crisis.

The ‘we’ is referring to UK individuals who are on average holding £14,367 of debt. It refers to the pension fund managers who are ignoring the fact they hold more liabilities than assets. It refers to banks and mortgage and loan providers who give loans to people who are already indebted and who will struggle to pay the debt back. It refers to a compliant media who do not have ask hard questions about irresponsible lending practices and cheer lead property bubbles due to getting significant revenues from the banking and property sectors.

And,  ultimately the ‘we’ is the government who peddled such terrible monetary policy that it has brought us as close to nuclear financial disaster as we have been since 2008.

In the red, everywhere

In the United Kingdom we are running a deficit not only in our day-to-day lives but also in our future lives.

Unsecured consumer credit is now at 2008 levels. There is £200 billion of unsecured credit. The FCA’s Andrew Bailey has put this dangerous issue at the top of the regulator’s agenda.

However it is not just for the FCA to be dealing with. There is no one organisation responsible for the huge levels of personal debt that will eventually cause this financial system to implode.

Click here to read full story on GoldCore.com.

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

Loving Our Debt-Serfdom: Our Neofeudal Status Quo

21-Sep-2017

I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term:

1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers.

2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations.

3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs.

Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy–the best and brightest rise to the top, if they have pluck and work hard– and America is all about identity politics: whomever doesn’t make it is a victim of bias.

Both narratives neatly ignore the neofeudal structure which disempowers the workforce in the public sphere and limits the opportunities to build capital outside the control of the state-corporate duopoly.

The book The Inheritance of Rome: Illuminating the Dark Ages 400-1000 shed some light on the transition to a feudal society and economy. While the author is a fine writer, the subject matter doesn’t lend itself to light reading. The transition from the Roman legacy of centralized governance (empire, monarchy, theocracy, etc.) to feudalism (governance by local lords / aristocracy) was complex and uneven, and the author takes pains to describe the process and many variations that arose in a highly fragmented post-Roman Europe.

(Note that the Eastern Roman Empire, a.k.a. Byzantine Empire, endured until 1453 AD. I’ve written often on both the western and eastern Roman empires: The “Secret Sauce” of the Byzantine Empire: Stable Currency, Social Mobility (September 1, 2016)

Don’t Diss the Dark Ages (October 26, 2016)

In the Footsteps of Rome: Is Renewal Possible? (July 24, 2017)

Neofeudalism is not a re-run of feudalism. It’s a new and improved, state-corporate version of indentured servitude. The process of devolving from central political power to feudalism required the erosion of peasants’ rights to own productive assets, which in an agrarian economy meant ownership of land.

Ownership of land was replaced with various obligations to the local feudal lord or monastery–free labor for time periods ranging from a few days to months; a share of one’s grain harvest, and so on.

The other key dynamic of feudalism was the removal of the peasantry from the public sphere. In the pre-feudal era (for example, the reign of Charlemagne), peasants could still attend public councils and make their voices heard, and there was a rough system of justice in which peasants could petition authorities for redress.

Of course peasants usually lost to the aristocracy and monasteries, but at least the avenue of redress was at least partially open. This presence in the public sphere was slammed shut in feudalism.

From the capitalist perspective, feudalism restricted serfs’ access to cash markets where they could sell their labor or harvests. The key feature of capitalism isn’t just markets– it’s unrestricted ownership of productive assets–land, tools, workshops, and the social capital of skills, networks, trading associations, guilds, etc.

Our system is Neofeudal because the non-elites have no real voice in the public sphere, and ownership of productive capital is indirectly suppressed by the state-corporate duopoly. Various studies have found that politicians ignore the bottom 99.5% who don’t contribute to their campaigns or crony-capitalist wealth (five quick speeches for $200,000 each is $1 million. Rinse and repeat.)

The vast majority of incumbents are re-elected, as they leverage their power to vacuum up enormous sums of campaign contributions that then buy the compliance of a cowed public.

As for ownership of assets— small business startups have been crushed by soaring costs, heavy regulations and the dominance of cartels and quasi-monopolies enforced by the state.

Income growth is now the exclusive domain of the Financial Aristocracy:

The so-called middle class owns little to no productive capital; what it “owns” is a house, which is ultimately a form of consumption. I say “owns” for two reasons: one, most households have a mortgage, so their ownership is still contingent on making monthly payments to a lender, and two, the government collects property taxes on the home regardless of the owner’s income or ability to pay.

Compare this to taxes levied on business income: if the business has no net income, it owes no taxes. Not so with property taxes–they are the modern equivalent of “rent” paid to the feudal lord.

Note that the aristocracy owns productive assets while the serfs own housing and debt. This is not a flaw in the system, it’s a feature of the system.

Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. This is Neofeudalism in a nutshell.

“Under a scientific dictator education will really work — with the result that most men and women will grow up to love their servitude and will never dream of revolution.”

“The nature of psychological compulsion is such that those who act under constraint remain under the impression that they are acting on their own initiative. The victim of mind-manipulation does not know that he is a victim. To him, the walls of his prison are invisible, and he believes himself to be free. That he is not free is apparent only to other people. His servitude is strictly objective.”

Aldous Huxley

video interview of Aldous Huxley

source of quotes (read the entire thread) 

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BREAKING: U.S. Senators Introduce Bill in DIRECT ATTACK ON U.S. Gold & Silver Mining

21-Sep-2017

Physical gold and silver in one’s own possession is the ultimate hedge against uncertainty.

The Federal Government’s Own Report Acknowledges the EPA Was Responsible for the Disaster Mentioned in This Bill:

On the morning of August 5, 2015, mine reclamation activities led by the U.S. Environmental Protection Agency (EPA) onsite project team triggered an uncontrolled rapid release of approximately 3 million gallons of acid mine water from the Gold King Mine located about 5 miles north of Silverton, Colorado.

Straight from one of the senators who introduced the bill himself [Editor’s Note: bold emphasis ours]:

Senators Introduce Bill to Reform Antiquated Hardrock Mining Laws

Hardrock Mining and Reclamation Act will ensure mining companies pay their fair share and prevent future disasters like Gold King Mine blowout

WASHINGTON — Today, U.S. Senators Tom Udall (D-N.M.), Martin Heinrich (D-N.M.), Michael Bennet (D-Colo.), Ron Wyden (D-Ore.) and Edward J. Markey (D-Mass.) introduced the Hardrock Mining and Reclamation Act of 2017, legislation to modernize the nation’s antiquated hardrock mining laws. The bill requires companies to pay royalties for the first time for the ability to extract mineral resources like gold, silver, and copper from public lands, helps ensure that taxpayers aren’t on the hook for cleaning up abandoned mines, and seeks to prevent another toxic spill like the Gold King Mine disaster of 2015. The Gold King Mine blowout spilled 3 million gallons of toxic wastewater into the Animas and San Juan rivers, and communities in New Mexico and Colorado are still waiting for compensation for the damage to their businesses and farms.

Click here to read the rest of the story of Silver Doctors

 

 

Gold Investment “Compelling” As Fed May “Kill The Business Cycle”

21-Sep-2017

Gold Investment “Compelling” As Fed Likely To Create Next Recession

– Is the Fed about to kill the business cycle?
– 16 out of 19 rate-hike cycles in past 100 years ended in recession
– Total global debt at all time high – see chart
– Global debt is 327% of world GDP – ticking timebomb…
– Gold has beaten the market (S&P 500) so far this century
– Safe haven demand to increase on debt and equity risk
– Gold looks very cheap compared to overbought markets
– Important to diversify into safe haven gold now

by Frank Holmes via Gold.org

Global debt levels have reached unprecedented levels, pension deficits are rising and the US interest rate cycle is on the turn. Frank Holmes, chief executive of highly regarded investment management group US Global Investors, believes that investing in gold is a logical response to current, unnerving conditions.

For centuries, investors and savers have depended on gold in times of economic and political strife, and its investment case right now is as compelling as it’s ever been.

As I write this, gold is trading above US$1,330 an ounce after a strong rally that took the metal to its highest levels since August 2016. Tensions over North Korea, a weakening US dollar, political uncertainty in Washington, an overvalued US stock market, surging public and private debt and negative interest rates around the world have all boosted demand for gold as a reliable and time-tested store of value.

I often refer to this as the ‘Fear Trade.’ For centuries, investors and savers have depended on gold in times of economic and political strife, and its investment case right now is as compelling as it’s ever been.

Let’s look at debt for the moment. Most market-watchers are aware that US government debt currently stands at just under US$20 trillion, an unfathomably large figure that will only continue to climb as the interest compounds.

Click here to read full story on GoldCore.com.

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

“This Is Where The Next Financial Crisis Will Come From”

20-Sep-2017

By Zero Hedge

In an extensive, must-read report published on Monday by Deutsche Bank’s Jim Reid, the credit strategist unveiled an extensive analysis of the “Next Financial Crisis”, and specifically what may cause it, when it may happen, and how the world could respond assuming it still has means to counteract the next economic and financial crash.

In our first take on the report yesterday, we showed one key aspect of the “crash” calculus: between bonds and stocks, global asset prices are the most elevated they have ever been.

With that baseline in mind, what happens next should be obvious: unless one assumes that the laws of economics and finance are irreparably broken, a deep recession and a market crash are inevitable, especially after the third biggest and second longest central bank-sponsored bull market in history.

But what will cause it, and when will it happen?

Needless to say, these are the questions that everyone in capital markets today wants answered. And while nobody can claim to know the right answer, here are some excerpts from what DB’s Jim Reid, one of the best strategists on Wall Street, thinks will take place.

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

What Is Real Wealth?

19-Sep-2017

What is real wealth? Money, right? Currency, gold, quatloos, you name it.Money is real wealth because you can use it to buy whatever you want.

I would argue money in any form is only the means to acquire real wealth, which is the agency, opportunity and time to pursue your life’s work.

The conventional view that wealth is money and leisure has it all wrong. Let’s imagine the owner of a vault of conventional treasure: jewels, gold coins, etc.

If the “wealth” stays in the vault, what’s the point of owning this “wealth”? The secret satisfaction of being “wealthy”?

If “wealth” is only an internal state, then let’s measure friendship and being needed/wanted as the metrics of “wealth.” You see the point; if “wealth” is merely an internal state of satisfaction, then a vault full of “money” is a poor metric.

What money buys that is real wealth is freedom and control of one’s life. This control over one’s life is called agency. Agency is defined as “the capacity of an actor to act in a given environment.” This may not seem like a profound concept, but another way to describe agency is that agency is the opposite of powerlessness.

People with agency define themselves and their identity; they shape the world they inhabit rather than passively await whatever circumstances deliver up.

In the real world, people with agency move on when things no longer work for them in a particular situation. Agency is not just the opposite of feeling powerless; it’s also the opposite of victimhood, i.e. the state of being in which others are held responsible for all of one’s travails and difficulties.

Agency and responsibility are two sides of the same coin: each manifests the other.

Opportunity is a form of wealth–and so is the wherewithal to take opportunities that arise. Though there is a random element to opportunity–i.e. getting lucky–the wherewithal to take the opportunity is not a matter of luck. It requires a specific appetite for risk, perseverance, the ability to discern how best to use the opportunity, and access to the capital required to exploit the opportunity.

Capital is a type of wealth that isn’t limited to “money”: Character traits are capital, social networks are capital, experience is capital, knowledge is capital. All of these forms of capital are often more important than “money” capital.

As for “money” buying leisure–leisure in abundance is a disaster for the vast majority of people. Humans are designed to be needed by others, to be part of something greater than themselves, and to gain dignity and pride by doing useful work–whether they are paid “money” for this work or not.

This is why so many of those with the “money” to have endless leisure are miserable. Their lives are an endless treadmill of frivolous consumerism, neurotic pettiness, hypochondria, expressing their infinity of heartaches to counselors, and saddest of all, medications in abundance to relieve the ennui and the dead weight of their purposeless existence.

“Money” is only useful if it is a means to acquire real wealth, which is the agency, opportunity and time to pursue your life’s work. There are many people who can spend $600,000 a year on various things (i.e. their “lifestyle”) who don’t feel “wealthy”–and if they don’t have agency and time for work that’s meaningful to them, they aren’t wealthy: they’re as impoverished as the person earning a fraction of their income.

Real wealth doesn’t actually require a vast horde of “money.” It requires some money, but how much depends on the cost of agency, opportunity and time. For those with few needs and the right priorities, the cost of agency, opportunity and time needn’t be all that high.

As for acquiring capital–the most important types of capital don’t require much money; determination, self-discipline, organization, a voracious appetite for knowledge and work, an insatiable curiosity, a generous heart, a knack for friendship, the purposeful pursuit of goals– these are the tools to acquiring real wealth: agency, opportunity and time to fulfill one’s life work.

I explain how to amass the most empowering forms of capital in my book Get a Job, Build a Real Career and Defy a Bewildering Economy

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Global Debt Bubble Understated By $13 Trillion Warn BIS

19-Sep-2017

– Global debt bubble may be understated by $13 trillion: BIS
– ‘Central banks central bank’ warns enormous liabilities have accrued in FX swaps, currency swaps & ‘forwards’
– Risk of new liquidity crunch and global debt crisis
– “The debt remains obscured from view…” warn BIS

Global debt may be under-reported by around $13 trillion because traditional accounting practices exclude foreign exchange derivatives used to hedge international trade and foreign currency bonds, the BIS said on Sunday.

Bank for International Settlements researchers said it was hard to assess the risk this “missing” debt poses, but that the main worry was a liquidity crunch like the one that seized FX swap and forwards markets during the financial crisis.

The $13 trillion unaccounted-for exposure exceeds the on-balance-sheet debt of $10.7 trillion that data shows was owed by firms and governments outside the United States at end-March.

The fact these FX derivatives do not appear on financial and non-financial institutions’ balance sheets under current accounting rules means little is known about where the debt lies.

“The debt remains obscured from view,” Claudio Borio, head of the BIS’s monetary and economic department, and two colleagues, Robert McCauley and Patrick McGuire, said in its latest quarterly report.

“Accounting conventions leave it mostly off-balance sheet, as a derivative, even though it is in effect a secured loan with principal to be repaid in full at maturity,” BIS said.

Explaining the risk they added: “In particular, the short maturity of most FX swaps and forwards can create big maturity mismatches and hence generate large liquidity demands, especially during times of stress.”

When buying a foreign asset, a domestic investor has three choices: buy a currency forward, undertake an FX swap or do a repurchase transaction.

Click here to read full story on GoldCore.com

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

All Cartel Fingers at the Ready: The Assault on Gold & Silver Is GOING TO BE NASTY

18-Sep-2017

Last night did not go that well as we saw constant pressure on the precious metals throughout the night:

Constant, steady pressure to the downside. This is in light of “Rocket Man” comments, many Floridians still without power as 3 new threats are swarming in the Atlantic, Venezuela pricing oil in yuan, bitcoin erratically, Syria heating up again, and any number of “pick your poison” doubleplusbad fundamental news. However, we knew this would happen, which can be seen in the following ominous chart for silver:

When we look at silver, we see there is some minor support around$17.15. Major support is at $17:

Let’s hope we really don’t fall through $17 at this point, though we are quite certain the cartel will push as hard as possible on price to the downside over the next two days. Once $17 is lost, there is no consolidation anywhere on that daily, and momentum would most likely carry the white metal even lower, so a $16 handle before 2:00 p.m. EST on Wednesday is where they will indeed try to push the silver price down to. If there was a great time to scrape-up some extra cash and grab the change jar to put in an order, it seems like the best time would be over the next two days.

The MSM and the Fed are still in lock-step, singing to the same tune, and cheer leading the “everything is awesome” meme. Come Wednesday afternoon, however, this could all change, and there could serious move in the gold and silver “market”. The MSM feels the Fed can do no wrong, but the Fed has zero margin for policy error, and on top of that, if Yellen has a Freudian slip, the movein gold and silver prices could be violent to the upside.

Let’s see all the different scenarios that could cause a big move in the markets:

  • No more balance sheet reduction talks
  • Talk of balance sheet expansion
  • Talk of “hurricanes” which will be combined with over-use of “transitory”
  • Rate Hike
  • Rate Cut
  • Comments on bubbles or equity valuations

There are more reasons than that, but you get the point. The Fed is already juggling six balls, and Yellen can’t give the illusion that she’s a juggler behind closed doors this time. Perhaps there is a journalist who prefers honor, integrity and duty over the MSM rag he or she works for, and that journalist will ask a real question at the risk of being Pedro Da Costa’ed?

For now, however, the markets are assuming an interest rate hold. If there is any movement in interestrates, there is a slight biased towards cut, but it is basically as it has been for months now, at least according to CME Group probability:

And if things look downright scary in silver, gold looks queasy at best:

Gold has been dealing with the latest assaults all week long. On top of that, is is more likely that silver will finally catch-up to gold on the analog, which we have been rooting for over the last several months, or is it now looking more like gold will catch-down to silver?

There is support at $1300, but by no means would it be called “major support”. Sure, it’s a nice number and everything, but gold could blow right through it to the downside, just like it did to the upside. If that is the case, are we talking about $1260? To catch down to silver, gold would have to drop in price to $1240, and that is assuming silver stays put, which it most likely will not.

That surely would be a punch in the face if gold peaked out at $1362 that Friday and ends up $100 down or more going into FOMC, though I wouldn’t put it past the cartel to dump as much paper gold as needed to get it there. Palladium looks like it may have found a short term bottom:

That’s a big bullish engulfing candle overnight and into the morning. Copper’s is big too, but so far it’s just a jumbled trading range. It looks like copper is going to play some ping-pong between $2.90 and $3.00.

If palladium and copper move up over the next couple days, but gold and silver move down, we will know the pressure on gold and silver is more important than ever to the cartel. We will be watching this closely.

Crude looks to be catching a bid:

We brought up the fact that sooner or later, crude oil and copper would converge on the charts, and it looks like they are both content with finding the middle ground. Crude’s push started before copper’s fall, and as people acclimate to a post-hurricane rebuild mode, that’s when things will get really interesting on those two charts.

Copper and oil can also serve to be a gauge on inflation since we know the official statistics are propaganda, the Fed is determined to devalue the dollar with their 2% per year “inflation target”, and the US dollar has been weakening all year. It is time to start looking to more reliable indicators to understand what is going on with inflation rather than what we are told by officialdom.

Speaking of a weak dollar:

It would not be surprising one bit if the dollar looks like it is moving, but really it’s just churning in place waiting to see what happens on Wednesday. If that churning turns into a monkey hammering, however, that would be our first clue that there is uncertainty in the markets far beyond what the VIX is telling us.

That downward sloping channel is no joke. A weaker dollar means we are about to pay more for everything. The questions is, if President Trump and Mnuchin want a weaker dollar, will the Fed comply and just let it fall?

Or the 10-Year Treasury for that matter, because the signals from VIX are muted, and the massive jump in yield in the 10 year looks to be running out of steam:

The VIX saw a bunch of movement back in August, but over the last several days, VIX has been slowly drifting lower again because the central bankers have saved the world.

There is, however a curve-ball thrown into the mix this week:

The effects of Hurricane Harvey and Hurricane Irma must not be under-appreciated. The Fed knows this, so they are busy working on their bullet points and canned answers to any Hurricane related questions form the press.

On the other hand, it’s quite possible the MSM has been scripted to allow only the most softest of softballs on the topic. The Fed will be working overtime, however, and bringing in temp economists from other central banks to helpcook the books crunch the numbers.The problems arise, however because they have hard deadlines, and there are four housing market reports coming out before Yellen sits front-and-center.

The script for Wednesday’s theatrics was probably written months ago, but with Mother Nature coming in and throwing some hard questions where the “press” will not, rather than a policy error, there could be a serious “fundamental error” due to their rustiness on multiple hurricanes wreaking havoc over huge swaths of the United States.

So Yellen will be walking a tightrope, and last we checked, her balance is not that good.

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

Bitcoin Price Falls 40% In 3 Days Underlining Gold’s Safe Haven Credentials

18-Sep-2017

– Bitcoin price action shows cryptos vulnerable to commentary and government policies
– Bitcoin falls to low of $2,980, down by $1,000 in week as China flexes muscles
– Volatility major issue: In 3 days btc fell 40% before bouncing 25% off lows
– BIS state risks of cryptos cannot yet be fully assessed and says technology still unproven
– Apple and Google developing a payment API for cryptos – may give governments full oversight
– Bitcoin and cryptos current volatility and exposure to governments underlines gold’s safe haven status

Courtesy of CoinDesk

Even for bitcoin last week was an eventful week. The price hit a recent low of $2,980, falling 40% and recovering by nearly 25% in the space of three days.

Last week was a good example of the vulnerabilities in the cryptocurrency space to government announcements regarding the infrastructure the ecosystem.

This last year has seen unprecedented progress and development in the bitcoin and crypto arena. From the price reaching new highs to an explosion in Initial Coin Offerings.

The fall in price by over $1,000 should serve as a reminder that markets will stumble when they try to run before they can walk. As much as early adopters like to declare bitcoin the new currency and declare is true safe haven, the last week has shown that gold is a far better long-term safe haven.

Government meddling

Reasons for bitcoin’s (and other cryptos’) fall last week was mainly thanks to further crackdowns on bitcoin exchanges by the Chinese government. On Thursday bitcoin fell 16% against the U.S. dollar as the Chinese announced they were closer to shutting down cryptocurrency exchanges.

This week commentators believe crypto traders have now priced in the negative news from the East, however last week’s performance was yet another example of how vulnerable bitcoin still is to government announcements.

This weekend and this morning the price has begun to recover following a report from the Bank of International Settlements.

Click here to read full story on GoldCore.com

 

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

[KR1124] Keiser Report: ‘Big Data’ Leaks

18-Sep-2017

We discuss ‘big data’ making the case for crypto by allowing for single point of failure leaks of vital, private information. Max interviews James Howard Kunstler of Kunstler.com about the hot mess of US climate change policy and infrastructure spend.

4 Disruptions from Cryptocurrencies that Banks Won’t See Coming

16-Sep-2017

Digital currencies such as Bitcoin and Ethereum are here to stay, and there’s practically nothing that can be done to stop the revolution. Critics, governments, and traditional financial institutions have all tried to slow down the growth of digital currencies without much success. Many individuals and organizations have started warming to the idea of digital currencies as the future of money, a potential first step towards the demise of fiat currencies. It is worthy of note that fiat currency displaced gold and silver as means of payment.

A recent study by Cambridge University estimates the current number of unique cryptocurrency wallets in active use between 2.9 million and 5.8 million. Interestingly, many experts believe that digital currencies will displace fiat money; yet, there’s a strong conviction that such a change is still long on the horizon. Unfortunately, while the traditional financial industry is fixated on the future of money, the market is losing sight of some disruptive changes already underway.

Traditional financial institutions are already waking up to the realities of the massive disruption that digital currencies are facilitating. Now, banks are finding ways to offer cashless alternatives in order to keep their customers from jumping ship to nimbler startups. However, the traditional financial institutions are enmeshed in some legacy traditions, technology, and worldview that rather sabotage their efforts at embracing digital money. This piece looks at four ways digital currencies are already disrupting the global financial industry.

Alternative reserve currencies

People in economically weak countries usually protect their wealth against socioeconomic uncertainties by holding a part of their wealth in the currency of traditionally strong countries such as U.S. Dollars, Euro, and Swiss Franc. In recent times, people have started using cryptocurrency as alternative reserve currencies. Cryptocurrencies, particularly Bitcoin has proven to be financial lifelines for people in Venezuela after the South American’s economy suffered an economic malaise of epic proportions.  

Inflation has jumped almost 130% this year. Whatever the amount of Bolivars that you had at the start of the year, it is worth practically nothing today. Unfortunately, the government is trying to clampdown on the influx of foreign currencies as part of efforts to prop up the Bolivar. However, the digital nature of Bitcoin makes it easy for Venezuelans to find an alternative means of payment that they trust.

Venezuela has already made a strong case for the value proposition of Bitcoin in times of economic uncertainty. Hence, you can expect investors to start hedging their exposure to economic meltdown by buying up digital currencies instead of buying specific currencies that are often tied to the economic fate of a single country.

Facilitation of cross border payments

International money transfers are one of the areas of financial transactions in which banks have the strongest monopoly. Banks use the SWIFT network to move money around globally, but such transfers often command a hefty price tag and they take a couple of days to process. Some online companies offer international money transfer services but the transfers often have to pass through the traditional banking system.

Thankfully, cryptocurrencies are setting the stage to facilitate international money transfer at a relatively cheaper price and with faster processing time than the traditional banking system. Ripple for instance, prides itself as being a frictionless solution for sending money globally by providing connectivity across payment networks for instant, on-demand settlements. Ripple payments are also significantly better than SWIFT transfers because you can trace the funds in real-time while maintaining low operational and liquidity costs.

Efficiency in financial transactions

Cryptocurrencies are opening up the financial services industry in order to make payments more secure, faster, and easier to process at both ends of the transaction. For instance, CryptoPay provides users with an online Bitcoin wallet that you can use to buy, sell, and store cryptocurrencies without worrying about price fluctuations. With a CryptoPay account, you can have your cryptocurrency holdings in EUR, GBP and BTC to provide you with a semblance of stability that is currently lacking in the pricing mechanism of cryptocurrencies.

CryptoPay also provides users with a Bitcoin debit card that serves as a tool for converting your Bitcoin into USD, Pound Sterling and Euro. Hence, while traditional financial institutions are still dragging their feet to provide support for cryptocurrencies, CryptoPay is already looking for ways to make it easier to withdraw your cryptocurrency into fiat currency in order to drive the mass adoption of cryptocurrencies.

Interestingly, CryptoPay is open to investors by the way of an upcoming ICO.  CryptoPay’s ICO for the sale of CPAY tokens provides you with a chance to buy into the bridge between cryptocurrencies and conventional assets. It is worthy of note CryptoPay is a proven tool that has been in operation since 2013, it created its Bitcoin payment gateway in 2014, and it opened its Bitcoin wallet and Bitcoin exchange in 2015.

Full democracy in financial industries

One of the biggest disruptions that cryptocurrencies are currently pushing is the erosion of governments’ control on fiscal and monetary systems. Governments all over the world are guilty of fiscal irresponsibility in which they are mostly printing out money without considering its effect on the purchasing power of their currencies. Digital currencies now provide a decentralized financial system that empowers the people by eliminating the need for intermediary services that banks provide. Digital currencies are also taking the control of monetary supplies out of the hands of the government.

A large part of the blame for the financial crisis that rocked the world in 2008 can be laid on the doorstep of banks because of their irresponsible banking actions. Market watchers believe that bankers are already setting in motion the mechanics that will trigger the next financial crisis. Central bankers are mostly trying to wind down their quantitative easing programs to draw money out of the economy.

Cryptocurrencies on the other hand are designed to run within the confines of the natural laws of demand and supply without the input of self-appointed custodians of monetary policy. The underlying code of any cryptocurrency determines the rules of measuring demand and supply and the blockchain ledger confirms compliance to the rules. In addition, blockchain’s public ledger provides transparency in the markets by being a source of truth that all users respect.

The Silver Chart is SCARIER Than The SCARIEST HORROR MOVIE

15-Sep-2017

The silver chart on the weekly has taken a page from the scariest of horror movies. We know what’s behind the door, and we know the fate it brings us:

When silver finishes making a run on the weekly, bad things happen. Said differently, get ready for the cartel to bring down the hammer on Sunday. Going back three years, we can see that every time that silver has a run-up, without fail, the next two weeks are lower, and more often than not, lower as in the start of the slow, unbearable grind down.

Putting it into perspective, we know that the primary silver miners did not fair well last quarter, but now First Majestic is off its lows and has found support at $7:

This is important because it shows that the smash move in silver is a little on the “too much” side at this point, even for the cartel. We would likely see the miners break down further next week, or a silver rally (which the ominous technical chart doesn’t support) or a silver price consolidation (which has been missing all year).

Just like we said on Monday, however, it was in the best interest of the cartel not to spook the markets, as indicated by the absence of Fed speeches, and the prepping of the markets (a.k.a. suppress gold & silver prices) to close the week exactly where they want them going into FOMC that ends with a Janet Yellen press conference.

This week – It was mission accomplished.

We do note the divergence is just as wide in the under-performance of silver relative to gold as it has been since April:

Both metals were pummeled with a steady barrage all week long.  Here’s how it looked in gold:

The cartel was even kind enough to serve up a “break-out fake-out” in gold on Tuesday and into Wednesday, with a spike up in price in evening trading, and overnight strength till morn. It worked, and we totally blew it in our midweek update Gold is now $37 off the high of $1362 (overnight Thursday into Friday Sep 8th), but things are looking bullish in the technicals. RSI is right smack dab in the middle of the over-sold to over-bought range, and the MACD is showing that gold has room to run here.

We are one Fed policy error away from the next leg-up in the gold & silver bull market, which could come as early as next week. This week, however, the cartel has won the battle and the metals have not just been capped, but beat-down. Seems all too easy with the help of Mother Nature and Man-made Terror on their side, though we can find it reassuring that complacency is a two-way street.

Platinum took it even worse than gold, with a drop some $60 off the highs, and while at first glance it appears we have another ominous sign, what we could really have is a short-term bottom in the precious metals, further supporting our next leg up thesis:

Just like gold, the RSI is very healthy, and that MACD looks to be signaling the bottom is in. This weekend will be an important one on the fundamental side. Certainly the Fed would love for the metals to take it again on Sunday night, especially since they are slashing their “forecasts” for GDP. Here’s the NY Fed droppin’ bombs on economic growth:

And Atlanta is not so sure anymore either:

Copper has been in the funk for 6 of the last 7 days:

The base metal is right at a major support line at $2.90, so it would be expected to tag it and (hopefully) bounce cleanly. The daily is looking like everybody who wants to sell has sold, so we shall see. Crude oil broke through $50 this week, and the trend is pointing to higher oil prices:

Either way you pump it, crude has finished the week up for the second week in a row, and the trend line is slowly forming since the $26 low in early 2016. If crude crashes through $45 to the downside, it may very well be the start of another trip down, but the tell-tale sign of higher-lows is in place, and while it is not easy to see on the chart, WTI just closed out the weekly with a higher-high. A weekly close somewhere north of $50.50 would not leave much room for doubt. In the meantime, we wait and see. The dollar looks to be rolling over now:

We have been warning about this all year long. Though it is not necessarily the dollar index that is problematic. Notice the US dollar/Japanese yen (USD/JPY). The divergence on the daily is getting wider, and either the dollar is going to catch up to everybody’s favorite FX carry-trade (which nothing signals it would), or the Japanese yen is going to strengthen against the dollar. If the yen strengthens to close the divergence, gold & silver would likely spike in price rather sharply when all other fundamental and technical data is placed into a Japanese currency wrapper. The Fed knows this, so we can only imagine the Fed and the Bank of Japan are sweating bricks to keep the yen from strengthening and providing the fuel for the precious metals fire.

Strange things are af00t at the 10-year yield:

Nothing about the yield on the daily chart say “higher interest rates”. and while the yield on the 10-year US Treasury Note has been slowly grinding lower all year, notice what happens when it picks up speed. If the yield rose from 1.54 to 2.62 in less than three months, things could get very nasty in the markets from here until the end of the year.

Drops in yield are bullish for gold & silver, though we would argue there is not much interest rate related smashing that could occur even as rates rise. The real rate of inflation on the things we spend our hard earned fiat on every day is negative, and the Fed has been behind the curve for so long, the rear-view mirror just fell into Yellen’s lap and Kashkari didn’t even notice because he was too busy changing the CD in the old Dodge Stratus to jam out to “We Built This City” by Starship.  

What more is there to say about the stock markets?

There’s a new record high on the SPX yet again:

If the Fed would love nothing more than to smash the precious metals up to and through their FOMC rate hike “decision”, they might not necessarily have wanted this melt-up in the stock market. Are the markets too complacent in thinking the Fed is going to hold next week? Or is the Fed going in and buying SPX via their dark pools to run it up just before pulling out the pin next week? While yes, the markets are at record highs, it is getting harder and harder what to make of it. We were confident this was coming with the VIX hysteria following the North Korea threat of several weeks back, but at this point they may must want to tap 2500 and call it a year.

Wouldn’t you know at 3:59 p.m:

Talk about a sick joke.

Bonus Chart: Bitcoin’s favorite jam is “Wild Thing” by Tone Loc:

Though all is not well in China…

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

Gold Up, Markets Fatigued As War Talk Boils Over

15-Sep-2017
  • North Korea threatens to reduce the U.S. to ‘ashes and darkness’
  • Markets becoming used to ongoing provocations from North Korea
  • Russia and China continue to support watered down versions of sanctions on Kim’s regime
  • Both NATO and Russia running war games on one another’s borders
  • Putin says Russia will give a suitable response” to NATOs threatening behaviour
  • Gold set to climb as fears over economy and war will drive safe haven demand

Source: Bloomberg

This year North Korea has launched a dozen missiles. With the latest one it has threatened the U.S. with ‘ashes and darkness’ as Kim believes it ‘should be beaten to death like a rabid dog.’

Russia and China continue to support watered down sanctions on the isolated country. Both have made it clear that they will not tolerate a war on their borders.

War talk is not just about North Korea anymore.  NATO and Russia have been or are currently carrying out war games on one another’s borders. Both parties feel the other one has acted unreasonably in doing so.  U.K. Defense Secretary Michael Fallon has accused Russia of deliberately provoking NATO, whilst Putin has said Russia has no other choice than to “give a suitable response to all of these actions,”

Russia has previously used military exercises as a cover for what has ultimately been invasions and war. See Georgia in 2008 and Ukraine in 2014 for the most recent examples.

Saber rattling is quickly looking like its going to become full-blown sword fighting at least somewhere in the world.

But few seem to be worried. Markets are not only apparently fatigued by the war cries of the world’s nuclear powers but are evidently ignoring the risks in the financial system.

Gold is currently up over 15% for the year, silver by nearly 12%. Both offer financial safe havens during times of war. All parties involved in the current geopolitical fracas are big holders of gold. Two of them, Russia and China are enabling the trade of the precious metal for key commodities.

Click here to read full story on GoldCore.com.

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

BREAKING: LBMA Silver to be PRICED in Russian Rubles and Chinese Yuan

14-Sep-2017


There are two parts to take into consideration on these sweeping changes.

First, there was a request for feedback on their proposed changes to the LBMA. Secondly, NOBODY made ANY feedback, and so the proposal will launch as stated on September 25th, 2017.

First there was a proposal:

Highlights from the Plan of Administration (link is to entire document) from new ICE Benchmark

This means that IBA proposes to make some changes to the process of setting the benchmark, in

summary:

 removing the Seller’s Premium

Currently, silver auction participants settle trades arising from the auction at a premium of USD 0.5 cents per ounce which is added to the benchmark price so that all trades settle at a higher price than the published benchmark. Participants settle amongst themselves at the auction price plus the Seller’s Premium without any additional spread. Participants settle with their clients at a spread around the benchmark price plus the Seller’s Premium. Participants each set a spread at which they will buy from clients and sell to clients. The spreads are agreed bilaterally between Participants and each of their clients. The supply chain for physical silver is linked together by a series of principal-to-principal transactions starting from miner to refiner before moving onto the banks that intermediate between producers and consumers. The actual USD per ounce value of many of the transactions between these market segments is linked to the London Silver Price. Firms in the market will typically buy and sell using this same reference price and will therefore tend to add a commission when selling in order to account for their value added.

 having a generic code of conduct and generic auction rules based on those currently applying
to the LBMA Gold Price

IBA currently publishes the “Code of Conduct for the IBA Gold Auction and the LBMA Gold Price Benchmark”. This represents the Practice Standards required under the FCA’s rules. IBA proposes to adapt the code to become the “Code of Conduct for the IBA Precious Metals Auctions and the LBMA Gold and Silver Price Benchmarks” as shown in Appendix 2. IBA also has auction rules for Participants and these will be similarly adapted to become the Precious Metals Auction Rule Book.

 hosting the auction on WebICE

IBA’s auction process is hosted on WebICE which will provide a facility for trading physical spot Silver at an equilibrium between buying and selling interests, subject to the Imbalance Threshold. This final price from the auction will be published to the market as the LBMA Silver Price benchmark. There will continue to be one Silver auction each day, at 12:00 London time.

 setting auction parameters specifically for the LBMA Silver Price, including an adjustment to
the Imbalance Threshold1

Pre-Auction Round Duration CURRENT 120 seconds (2 minutes) IBA 900 seconds (30 minutes)

 increasing the number of LBMA Silver Price currencies

The LBMA Silver Price is currently published in USD, EUR and GBP. The USD prices are published to 3 decimal places and the EUR and GBP prices are published to 4 decimal places. The price discovery in IBA’s Gold auction is in USD. At the end of the auction, the price for Gold in USD is converted into other currencies. These non-USD prices are published as indicative settlement prices at the end of the auction, or as benchmarks for reference in derivative contracts. The additional currencies in the LBMA Gold Price are Australian Dollars, British Pounds, Canadian Dollars, Euros, Onshore and Offshore Yuan, Indian Rupees, Japanese Yen, Malaysian Ringgit, Russian Rubles, Singapore Dollars, South African Rand, Swiss Francs, New Taiwan Dollars, Thai Baht and Turkish Lira. The LBMA Gold Price is available both in prices per ounce and in prices per gram. IBA intends to publish the LBMA Silver Price in the same currencies and in prices per ounce and prices per gram.

 

Click here to read the rest of the article on Silver Doctors

Dear Jamie Dimon: Predict the Crash that Takes Down Your Produces-Nothing, Parasitic Bank and We’ll Listen to your Bitcoin “Prediction”

14-Sep-2017

Dear Jamie Dimon: quick quiz: which words/phrases are associated with you and your employer, J.P. Morgan? Looting, pillage, rapacious, exploitive, only saved from collapse by massive intervention by the Federal Reserve, the source of rising wealth inequality, crony capitalism, privatized profits-socialized losses, low interest rates = gift from savers to banks, bloviating overpaid C.E.O., propaganda favoring the financial elite, tool of the top .01%, destroyer of democracy, financial fraud goes unpunished, free money for financiers, debt-serfdom, produces nothing of value to society or the bottom 99.5%.

Jamie, if you answered “all of them,” you’re correct. The only reason you have a soapbox from which you can bloviate is the central bank (Federal Reserve) saved you and your neofeudal looting machine (bank) from well-deserved oblivion in 2008-09, and the unprecedented, co-ordinated campaign by global central banks to buy trillions of dollars of bonds and stocks.

Central Banks Have Purchased $2 Trillion In Assets In 2017

This 8-year long central bank intervention has:

1) transferred billions in what were once interest payments earned by savers and pension funds to banks such as J.P. Morgan

2) boosted your sales by flooding the financial system with low-cost credit

3) lifted your stock far above its value in an unmanipulated market and thus

4) awarded you immense stock-option and bonus-based wealth for doing nothing but letting the central banks enrich J.P. Morgan and its peers.

In other words, your claim of “financial genius” is based solely on central bank intervention. J.P Morgan would have done very well in the past eight years if they’d replaced you with a crash-test dummy. In fact, the shareholders would have done much, much better if the crash-test dummy had a Post-It note on its chest reading “buy bitcoin.”

Compare the return for an investor who believed your shuck-and-jive claim to “financial genius” and “bought the dip” in J.P. Morgan stock (JPM) at $57 in early February 2016 and the investor who bought bitcoin (BTC) at $376 at the same time.

The buyer of JPM has certainly done well, earning a return of around 77% over the 19 months (JPM has risen from $57 to $91, a gain of $44, not counting dividends), but the buyer of bitcoin has earned a more than 10-fold increase, gaining $3,525 per bitcoin at the current price around $3,900. (A few weeks ago, the owner of BTC could have skimmed an additional $1,000 per coin.)

The buyer of 1,000 shares of JPM for $57,000 gained $44,000 plus dividends, yielding a total of around $93,000, while the buyer of $57,000 worth of bitcoin at $376 (roughly 150 BTC) gained $528,000 and has a total of $585,000.

The buyer of JPM could sell his shares, pay the capital gains tax and buy a modest mid-sized car with the gains. The buyer of bitcoin could sell his bitcoins, pay the capital gains tax and buy a very nice house or flat in all but the most over-valued markets with his gain, and buy a brand-new vehicle with whatever cash is left.

This is the begging-for-the-overthrow-of-a-corrupt-status-quo economy we have thanks to the Federal Reserve giving the J.P. Morgans and Jamie Dimons of the world the means to skim and scam the bottom 95%: an economy undermined by a vast and widening gulf between the Jamie Dimons (crony-capitalist toadies) and everyone else.

Dear Jamie: if you want us to listen to your incoherent ranting about bitcoin as “financial genius,” first predict the timing of the crash that takes down your parasitic bank. If you pull that off with amazing accuracy, then maybe we’ll pay attention to your “prediction” about bitcoin. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Truth Slip AWESOME FOR GOLD: MSM Anchor BUYS PHYSICAL GOLD

14-Sep-2017

Thank’s World Gold Council for the Tip:

Follow @JenSaidIt ‘s journey on @yahoofinance as she invested in gold for the first time: https://t.co/AhWWs8M3HZ pic.twitter.com/FYEIB9PI3m

— World Gold Council (@GOLDCOUNCIL) September 14, 2017

Here are some of the best parts:

I bought gold for the first time this year. Not a gold ETF like GLD or a gold miner stock like Barrick (ABX), but actual physical gold. I had a limited budget, but wanted it as a diversification and a small hedge against the coming zombie apocalypse or market crash, take your pick.

Jim Rickards, noted gold bug and author of numerous books on gold, including “The New Case for Gold,” recommended I buy…

–> Click here to read the rest of this article on Silver Doctors

Oil Rich Venezuela Stops Accepting Dollars

14-Sep-2017
  • President Maduro ‘ Venezuela will create a basket of currencies to free us from the dollar,”
  • Oil traders ordered to stop accepting U.S. dollar in exchange for crude oil
  • Order comes following calls from Russia and China to find alternatives to current reserve system
  • U.S. Dollar accounts for two-thirds of global trade
  • Venezuela has over ten-times more oil than United States
  • Super powers are gradually turning to gold to avoid using world’s main reserve currency
  • Are we seeing the beginning of the end for the U.S. dollar?

Source: The Burning Platform

The oil-rich country of Venezuela has stopped accepting the U.S. Dollar as payment for oil.

Last week President Maduro warned that the country would this week ‘free’ itself from the US dollar.

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,”

Yesterday Venezuela temporarily suspended the sale of U.S. dollars through its Dicom auction system. This (and other moves) was in response to U.S. sanctions put in place by the Trump administration.

Trump claims the sanctions are there to punish the country’s autocratic leaders. Maduro claims Washington’s move was part of an “economic war”.

This morning The Wall Street Journal reports that the Venezuela is already telling oil traders not to accept the US currency.

Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.

The state oil company Petróleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.

The decision to suspend dollar trading on Diacom and to no longer accept the the U.S. currency for oil is potentially a major blow for the world’s reserve currency.

Venezuela’s decision comes at a time when other countries (namely Russia and China) are already finding ways to avoid using the U.S. dollar.

History shows us that currency domination does not last forever. Are we seeing the cracks in the latest global currency reserve system? Will those who seek to come out of the shadows and force of the US begin to build up their own systems to survive outside of the U.S. dollar and how important will gold be?

Click here to read full story on GoldCore.com.

Important Guides

For your perusal, below are our most popular guides in 2017:

Essential Guide To Storing Gold In Switzerland

Essential Guide To Storing Gold In Singapore

Essential Guide to Tax Free Gold Sovereigns (UK)

Please share our research with family, friends and colleagues who you think would benefit from being informed by it.

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