Economics

Economics
Max and Stacy give you all the financial news you need as the Global Insurrection Against Banker Occupation gathers pace. Occupy Wall Street, Crash JP Morgan, Buy Silver and DEFINITELY visit MaxKeiser.com!
Updated: 4 hours 39 min ago

[KR1118] Keiser Report: Economic War With China?

3-Sep-2017

Max and Stacy discuss Germany repatriating €24 billion worth of gold from New York and the US administration finally realizing it is already at economic war with China. They also discuss ‘enlightened’ Silicon Valley sorts who ‘feel’ they are inclusive despite the data proving they are not.

Biggest Crypto Campaign Ever. #DASH sponsors $500,000 “Great American Pilgrimage”

2-Sep-2017

Dash Sponsors $500,000 Keiser Report Tour, Largest Sponsorship in Cryptocurrency Historyhttps://t.co/txJCkyDKnt#DashForceNews #DASHpay pic.twitter.com/kOhi7wj2cy

— Dash Force News (@DashForceNews) September 1, 2017

Silver Kisses Summer Goodbye as Gold Leaves the Cartel in the Dust

1-Sep-2017

What a week in the metals!

 

 

If anybody is out there saying that gold and silver are going to significantly drop from here, it might be smart to turn from that person and run away as fast as possible, because the only thing going down is gonna be ego and the positions of everybody that fed the bear.

Gold and silver have shown the strength we have been looking for. We knew it wasn’t going to be an easy week even though we all know these metals are just way too undervalued right now. After the massive gold dump last Friday, we knew the cartel was trying their hardest to keep gold and silver below critical levels going into options expiry. They had plenty of help from the MSM, and the Fed may have just taken the cake for the most anti-gold hit piece ever.  They even had the help of a gold and silver “Wednesday Night Flash Crash Lite”, and while it kept gold at bay for a couple hours, it didn’t even keep the price of silver down for more than 14 minutes. Look at that strength in the white metal:

 

 

 

Coming off the heels of that fight, gold & silver had a late afternoon surge on Thursday, and then this morning, going into the BLS Nonfarms Payrolls Report, seems like the BLS hesitated and couldn’t decide which one to click send with:

 

Here is the thing about market manipulation and price suppression. There is only so much downward price pressure they can apply before the manipulators have to let up, or they risk the gold and silver markets shattering and breaking into pieces.

Click here for the full story on SilverDoctors.com.

Why We’re Doomed: Stagnant Wages

1-Sep-2017

Despite all the happy talk about “recovery” and higher growth, wages have gone nowhere since 2000–and for the bottom 20% of workers, they’ve gone nowhere since the 1970s.

Gross domestic product (GDP) has risen smartly since 2000, but the share of GDP going to wages and salaries has plummeted: this is simply an extension of a 47-year downtrend.

Last month I posted one reason Why We’re Doomed: Our Economy’s Toxic Inequality (August 16, 2017). The second half of why we’re doomed is stagnant wages. Why do stagnating wages for the bottom 95% doom our status quo? As I noted yesterday in Why Wages Have Lost Ground in the 21st Centuryour system requires ever-higher household incomes to function–not just in the top 5%, but in the top 80%.

Our federal social programs–Social Security, Medicare and Medicaid–are pay-as-you-go: all the expenditures this year are paid by taxes collected this year. As I have detailed many times, the so-called “Trust Funds” are fictions; when Social Security runs a deficit, the difference between receipts and expenses are filled by selling Treasury bonds in the open market–the exact same mechanism ther government uses to fund any other deficit.

The demographics of the nation have changed in the past two generations. The Baby Boom is retiring en masse, expanding the number of beneficiaries of these programs, while the number of full-time workers to retirees is down from 10-to-1 in the good old days to 2-to-1: there are 60 million beneficiaries of Social Security and Medicare and about 120 million full-time workers in the U.S.

Meanwhile, medical expenses per person are soaring. Profiteering by healthcare cartels, new and ever-more costly treatments, the rise of chronic lifestyle illnesses–there are many drivers of this trend. There is absolutely no evidence to support the fantasy that this trend will magically reverse.

Costs are skyrocketing and the number of retirees is ballooning, but wages are going nowhere. Do you see the problem? All pay-as-you-go programs are based on the assumption that the number of workers and the wages they earn will both rise at a rate that is above the underlying rate of inflation and equal to the rate of increase in pay-as-you-go programs.

If 95% of the households are earning less money when adjusted for inflation, and their wealth has also declined or stagnated, then how can we pay for programs which expand by 6% or more every year?

The short answer is you can’t.

The budgets of state and local governments also expand every year as citizens demand more services, infrastructure requires costly maintenance and upgrades, and the overall costs of providing government services rises (soaring healthcare premiums are a major driver of higher government expenses). How can households pay higher property and sales taxes if their incomes are going nowhere?

Stagnant wages = stagnant income tax revenues.

Then there’s the consumer economy that depends on ever-higher consumer spending. If wages are stagnant, how can households spend more money? The conventional answer is: we’ll blow asset bubbles in stocks, bonds and housing, and households can spend this newfound wealth.

Nice theory, but only the top slice of American households own enough of these assets to matter. Feast your eyes on these two charts of skyrocketing income and wealth inequality. This chart shows that the majority of income growth is now concentrated in the top 1/0th of 1%, and most of what’s left has gone to the top 5%. This is the only possible outcome of financialization and central-bank inflated asset bubbles.

Here’s another look at the same dynamic, but excluding capital gains, which flow to those who own most of the assets, i.e. the top 1%: the bottom 90% lost 10% in the decade 2002-2012, the top 5% gained 6% and the very top of the wealth-power pyramid, the top 1/100th of the 1%, gained 76%.

The conclusion is sobering: wages/salaries are no longer an adequate means to distribute income or paid work. Our system is broken at the deepest levels–not just economically broken, but socially broken as well. Clinging to this broken model and filling the widening gap between the super-wealthy and everyone else with more debt will doom the system.

This is why I’ve proposed a new way to organize production, consumption, work and income in my book A Radically Beneficial World: Automation, Technology & Creating Jobs for All.

The point is the present system cannot endure. Borrowing trillions of dollars to paper over this failure won’t work for much longer. We need a new system, or we’re well and truly doomed. 

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.

Precious Metals Outperform Markets In August – Gold +4%, Silver +5%

1-Sep-2017

– All four precious metals outperform markets in August
– Gold posts best month since January, up nearly 4%
– Gold reaches highest price since US election, climbs due to uncertainty and safe haven demand
– S&P 500 marginally higher; Euro Stoxx, Nikkei lower for month

– Platinum is best performing metal climbing over 5%
– Palladium climbs over 4% thanks to seven year supply squeeze
– Fear, uncertainty and political sanctions are amongst biggest drivers for precious metals
– Never been a better time to diversify and rebalance portfolios with stocks and bonds near record highs and looking vulnerable

Editor: Mark O’Byrne

Market Performance in August (Finviz.com)

All four precious metals have made gains in the month of August.

Whilst platinum and palladium’s leading performances can largely be attributed to industrial factors they have also benefited from the safe haven demand which is driving gold and silver prices.

Safe haven demand really came into its own this last month. Issues with North Korea have stepped up a level whilst markets have finally begun to question the complacency they have been feeling in regard to the US political and financial situation, geopolitical risk and the increasingly uncertain outlook for the global economy.

Ultimately very little is known about what will happen with the US debt ceiling, increasingly overvalued stocks (both the NASDAQ and  the S&P500), Trump’s plans for corporate tax, dealings with North Korea and (not forgetting) Venezuela.

We are living in very uncertain times indeed and investors decided to allocate funds to the ultimate safe havens – the precious metals.

Gold shines as investors rush into safe havens

This week gold rose to its highest point so far in 2017 as tensions between North Korea (but really, the rest of the world) and the US ramped up. For the month of August the price is up 3.59%.

Silver was also up thanks to safe haven demand, but its 5% climb was also in part due to manufacturing demand. Currently, about 55% of all silver consumed is for industrial use.

Gold has so far risen in every month, bar June.

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.

4 Reasons Why “Gold Has Entered A New Bull Market” – Schroders

31-Aug-2017

– 4 reasons why “gold has entered a new bull market” – Schroders
– Market complacency is key to gold bull market say Schroders
– Investors are currently pricing in the most benign risk environment in history as seen in the VIX
– History shows gold has the potential to perform very well in periods of stock market weakness (see chart)
– You should buy insurance when insurers don’t believe that the “risk event” will happen
– Very high Chinese gold demand, negative global interest rates and a weak dollar should push gold higher

This week gold broke through the key resistance of $1,300. For some time market commentators have been signalling this level as the point of entry for a new bull market.

Often price can be distracting when it comes to trying to figure out what is going on. Two Schroders fund managers called the new bull market in gold about a week before the price broke through the key level.

Gold has entered into a new bull market. As we have discussed previously, there are four main reasons for our stance:

  1. Global interest rates need to stay negative
  2. Broad equity valuations are extremely high and complacency stalks financial markets
  3. The dollar might be entering a bear market
  4. Chinese demand for gold has the potential to surge (indeed, investment demand in China for bar and coin already increased over 30% in the first quarter of 2017, according to the World Gold Council)

Click here to continue reading on GoldCore.com 

Systemic Uncertainty, Meet Fragility

30-Aug-2017

Life is inherently uncertain, but systems that were once considered certainties have increasingly become uncertain. Social Security is one example; recent polls reflect widespread doubts among Millennials and Gen-Xers that there will be any Social Security benefits left for them by the time they reach retirement age.

This doubt is fact-based; as the number of retirees swells, as Medicare costs soar ever higher and the number of full-time jobs paying into Social Security/ Medicare stagnates, these pay-as-you-go programs break down; Social Security is already paying out billions more than it collects from employers and employees.

Uncertainty is one thing, fragility is another. The socio-economic systems we rely on are also becoming increasingly fragile and prone to failure, for an entirely different set of reasons than those driving uncertainty.

Changing fundamentals drive uncertainty. The nation’s demographics and stagnant wages for the bottom 95% are extremely unfavorable for pay-as-you-go programs like Social Security and Medicare; their future is uncertain because the inputs and outputs are changing.

Fragility is a function of systems being thinned by cronyism, self-serving insiders, fraud, lack of transparency, lack of competition, monopolies, profiteering and a decline of quality. Systems that become too costly due to the above dynamics are hollowed out as everyone seeks some way to reduce the costs. Redundancies are stripped out, staff is slashed to the bone, senior managers with the most experience are pushed out to lower payroll costs, quality control is whacked, and inferior inputs are presented as equal to the higher quality inputs that they replace.

When these weakened systems are under pressure or face a crisis, they crumble. Shoddy materials fail, inexperienced managers make hasty, ill-informed decisions, the barebones staff is overwhelmed, equipment that wasn’t properly maintained to save money breaks down, and so on.

We’re assured by financial authorities and the media that our banking system is now monstrously resilient and robust, and it is impervious to financial crisis. You’re kidding, right? So when all the subprime auto loans go bust, and all the overleveraged commercial real estate loans go bust, and all the developing-world debt in U.S. dollars goes into default, and all the consumer debt issued to marginal borrowers goes bust, the hundreds of billions in losses are all going to be absorbed, no problem.

This is fragility writ large. You can bet the entire financial sector is making the same faulty, fragility-creating assumptions as a means of maximizing profits: only one auto loan in a hundred will go into default, near-zero commercial real estate loans will blow up, every dollar-denominated loan in the developing world will be paid in full, blah blah blah.

In other words, if we assume FantasyLand perfection of marginal borrowers–that once a global recession guts their opportunities to refinance and the income needed to service their loans, they will still magically make all payments in full and on time–the financial system is resilient.

Beneath the reassurances, the system is increasingly fragile because all the resilience has been stripped out of it to maximize profits in the current quarter. And as for the financial authorities–who believes the financial sector is serving the interests of the bottom 99.5%? Based on what evidence? Who believes the mainstream media is reporting the deteriorating fundamentals and the increasing fragility of our society’s core systems?

All we need is a few overlapping crises to reveal the structural fragility and lack of trust/certainty in our core systems. Profiteering, cronyism, self-serving insiders, a decline in quality, gaming the system, fraud, opacity, propaganda, and the erosion of competence all seem like good clean fun when the weather is calm and the sun in shining. But the true nature of our systemic failure will only be revealed when multiple storms arise and the system is pushed to the limit.

That’s the problem with fragility: everything looks fine on the surface until a crisis applies pressure. Then the whole rickety contraption collapses in a heap.

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.

SD Midweek Update: Score Tied at Halftime but Gold & Silver MUST STEP-UP THEIR GAME

30-Aug-2017

The fundamental news is all over the place this week. On the one hand, we have Hurricane Harvey coverage 24/7. On the other hand, we have North Korea and everything else. This week everything else does not include the sharp political, racial and social divides that are wreaking havoc in the streets on America. We speculated this would be the case last Friday.

Either way one looks at the fundamental news on the week, none of it is good. Lives and property are ruined out west, and tensions are heating up in the far East. If the fundamental news was not bad enough, it is about to get even trickier. On the economic calendar, we have the ADP Employment Report, the first revision of Q2 GDP, and the EIA Petroleum Status Report. Rest assured all eyes will be on the petroleum report today as analysts are all offering their $.02.

The rest of the week is full of data releases as well. Friday is September 1st, so we are getting the earliest release of a Nonfarms Payroll Report as possible. If the fundamentals have moved the markets so far, they will move them even more as this data is released. While we will not see the effects of Harvey on employment until at least next month, how the disaster affects the employment situation in the US is just as significant as how it affects oil. One could even argue this is more important, because with oil we are discussing a commodity, but with employment, we are talking about people.

Also stated last Friday, we posed the question if Harvey was the black swan the analysts have been up early every morning bird-watching for? Seeing as how Harvey is still doing damage, and the fact that damage assessment hasn’t even started, it looks more and more with every passing day that it is, and if this is the case, it would be more like a flock of black swans in a flyover more than one single bird swooping in.

Since Texas is Oil Country, let’s start with crude. We can throw copper in for good measure. We are going to take it way back this week and throw up a 3-year, weekly chart:

Since the end of 2014 crude oil has gone nowhere. It has been drawing out a long, multi-year bottom and it looks like it is finally turning up, based on the performance of other commodities. If this is the case, and if the new bull run in commodities has begun, crude needs to catch up to copper, and we could be staring down much higher oil prices as the weeks play out.

Copper is on a tear. Most do not believe in the start of a new bull market, though trying to fight it could be costly. It is hard to find a nicer, rounded bottom (on a chart) than on copper. It almost has a reverse head-n-shoulders forming on the weekly. Copper is right up at 3-year highs going back to September, 2014. If the bull run in copper is not the case, copper would fall down to crude on the cart above, however, does anybody really think crude is going back to $26? Especially considering dollar weakness all year?

Speaking of the dollar:

On the daily we can see that the US dollar and the Japanese yen are severely decoupled. If USD/JPY falls on the chart, that means the Japanese yen is strengthening against the dollar. Do dollar bulls really think the dollar is about to turn the corner and strengthen? We have a debt ceiling to look forward to, and now, how many hundreds of billions in federal aid is going to be borrowed to pay for Harvey damages? Well, apparently Goldman Sachs thinks it is going to turn. So we know there is at least one dollar bull left. Just be careful. He could be a wolf in sheep’s clothing looking to sell dollar with nobody wanting to buy them.

Our stellar performer in the precious metals is our good friend Palladium:

Palladium has a very nice, round bottom of its own too. Palladium is back at 3-year highs. Hmmm. Kinda makes you wonder doesn’t it? Copper is at 3-year highs, palladium is at 3-year highs, the dollar has been falling all year, but still, nobody is ready to call the turn in gold, silver or copper.

It would be fun to throw a trick question out there and ask an analyst if palladium is in a new bull market.If the answer is “yes”, that would be admittance of a new precious metals bull market, because palladium is a precious metal, and it would also be admittance of a new base metals/commodities bull market, because palladium is also an industrial metal. Write that question down on a 3×5″ note-card and put in in the back pocket for later.

GOING FOR GOLD!

We are all pleased with the performance of the yellow metal in the month of August. You can rest assured, however, there are forces at work trying to make sure gold does not put in a weekly but more importantly a Monthly close above $1300.

TODAY AND TOMORROW MIGHT BE GUT-WRENCHING.

The is also this nasty little issue to deal with all the way from $1310 to $1350. Last Friday we said gold needs to break-out BIG-TIME. This is as true going in to the rest of the week as it was back then. What we really need is to bust through $1350 very heavy-handily, but we must not count ourselves in the clear just yet. Gold is still trying to tread water above $1300 on the week. There are many things that could happen over the next three trading days, so we all really need to keep a solid head on our shoulders and not get too far in front of our skis.We’ve been let down so many times this year, or pushed down, however you want to call it, but that does not mean we are not confident.

Then there’s silver:

There is actually good news in silver. Silver is right back to punching through that early June high on the daily. Silver is now well above the 50-day and the 200-day moving averages. The immediate need is for silver to close out the week strong, and higher than the June 6th close of $17.70. It seems like we have gone through so much junk this year that it almost seems like a feat of strength, and I won’t even mention the fact that last year in September, the white metal was sitting over $20. Oops. I just did.

Last and certainly least is every central banker’s favorite stock market bubble, the S&P 500. Dow can come along too. Here they are for your enjoyment:

From the looks of the rounding up there in the nose-bleed section of the stadium, I would not want to be a buyer here. The only question is how far and how fast? I’ll let you decide the direction.

So get ready for the second half. We are going to need an even better performance than the first.

Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards

30-Aug-2017

– Trump could be planning a radical “reboot” of the U.S. dollar
– Currency reboot will see leading nations devalue their currencies against gold
– New gold price would be nearly 8 times higher at $10,000/oz
– Price based on mass exit of foreign governments and investors from the US Dollar
– US total debt now over $80 Trillion – $20T national debt and $60T consumer debt
– Monetary reboot or currency devaluation seen frequently – even modern history
– Buy gold eagles, silver eagles including monster boxes and gold bars 

– Have a 10% allocation to gold, smaller allocation to silver

Editor: Mark O’Byrne

Source: Agora Financial

A new monetary standard which will see the dollar “reboot” and gold be revalued to $10,000/oz according to best-selling author and Pentagon insider Jim Rickards.

A monetary ‘reboot’ is not unprecedented

Articles about an imminent return to the gold standard are not exactly infrequent in the gold world and it can be easy to become immune to them and dismiss them without considering the facts and case being made.

Many of the articles are not just based one ever-wishful daydreams. Much of it comes from information that is true about today and is then applied to situations that we have seen in the past.

Rickards makes this point himself. A monetary reset is not unheard of. Since the Genoa Accord in 1922 there have been a further eight reboots. The most recent was in 2016 in what Rickards refers to as the Shanghai Accord which purportedly saw deals done that would allow China to ease without leading to a sharp correction in the US stock market.

Rickards isn’t the only one who is speculating that there could be some big monetary changes on the horizon. In March intelligence service Stratfor wrote:

Trump may consider unilateral or, failing that, multilateral currency interventions to bring it back down…Negotiating a new coordinated monetary intervention

Click here to continue reading……

[KR1116] Keiser Report: Bitcoin bond

30-Aug-2017

As the bond market arrives for bitcoin, Max and Stacy discuss ‘high finance’ meeting cryptocurrency. Will this bring in more liquidity or more manipulation? Max continues his interview with Wolf Richter of WolfStreet.com about the latest in markets – from housing in San Francisco to driverless car dreams on corporate balance sheets.

The 5 Steps to World Domination

29-Aug-2017

World Domination–it has a nice ring, doesn’t it? Here’s how to achieve it in 5 steps:

1. Turn everything into a commodity that can be traded on the global market:land, leases on land, options to purchase land, houses, buildings, rooms in slums, labor, tools, robots, water, water rights, mineral rights, rights to air routes, ships, aircraft, political power, shares in corporations, government bonds, municipal bonds, corporate bonds, student loans that have been bundled into debt-based instruments, the income from city parking meters, electricity, software, advertising, marketing, media, social media, food, energy, insurance, gold, metals, credit, interest-rate swaps and last but not least, financial instruments that control and/or pyramid all the real-world goods and assets that have been commoditized (i.e. almost everything).

Why is this the essential first step in World Domination? Once something has been commoditized, it can be bought and sold in the global marketplace in fiat currencies–currencies that are not backed by any real-world asset and that can be created out of thin air by central and private banks.

You see the dynamic, right? Create credit-currency out of thin air, and then use this “free money” to buy up the real world. Quite a trick, isn’t it? Get a means of exchange for essentially nothing (i.e. money at near-zero interest rates) and then trade this for assets that produce goods and services everyone else needs or wants.

Now we understand steps 2 and 3:

2. Enable private banks to create money out of thin air via fractional reserve banking. You know the drill: banks can issue $15 in new loans for every $1 in cash they hold in reserve. (Depending on the current regulations, it might as little as $10 or as much as $35 that can be created and lent out for every $1 held in cash reserve.)

In the current zero-interest rate environment, this new money can be borrowed for near-zero carrying costs by corporations and financiers.

3. Establish a central bank with essentially unlimited ability to bring money into existence and use it to backstop the private banking sector. If the private banks get in trouble, no problem, the central bank is there to bail them out with unlimited lines of credit and an unlimited ability to create new money.

4. Undermine/destroy local economies’ ability to organize production and consumption without using credit and fiat currencies (i.e. money controlled and issued by central and private banks). Trading goods on barter? Get rid of that. Using social ties rather than cash or bank credit to organize production and consumption? Eliminate that capability. Locally issued currencies? That’s against the law. Using cash? bad, very bad–everyone must use banks and bank credit instead.

Once these four steps are in place, the 5th step is easy:

5. Buy up all the productive assets and income streams of the world with nearly free credit-money. No saver can compete with corporations and financiers with access to billions of dollars in nearly-free credit-money.

It doesn’t matter if you earn $1,000 or $100,000 a year–you will be outbid.

Once everything can be bought on the global marketplace, and you have nearly unlimited access to super-cheap credit, you don’t need an army to achieve World Domination; all you need is enough cheap credit to buy up everything that generates the highest value and/or income.

Now you understand why I say: if we don’t change the way we create and distribute money, we’ve changed nothing. 

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.

Gold Surges 2.6% After Jackson Hole and N. Korean Missile

29-Aug-2017

– Gold surges as N. Korea fires ballistic missile over Japan
– Safe haven buying sees gold break out to 10-month high after Jackson Hole and rising North Korea risk of attack on Guam
– South Korea’s air force dropped eight MK 84 bombs near Seoul;  simulating the destruction of North Korea’s leadership

– Gold rises from $1,291 to $1,325; Silver surges 3.2% from $17.05 to $17.60
– Volatility as seen in VIX surges as stocks fall; FTSE -1.1%
– Yen rises in short term but no safe haven in long term with gold haven risen 9.8% per annum in JPY (see chart)

– Gold was moving higher after Jackson Hole and had broken through crucial $1,300/oz level
– Asian geopolitical risk allied to U.S. political instability increasing safe haven bid
– $20 trillion U.S. debt ceiling storm looms

Editor: Mark O’Byrne

This morning the price of gold has rallied to its highest point since the Trump’s election. North Korea’s firing of a missile over Northern Japan which landed in waters off Hokkaido in the Pacific, has sharply escalated tensions in the Korean peninsula and in Asia.

This latest move by Kim Jong Un was intended to show that an attack on Guam is possible at any time, according to North Korea’s Mun-hwan.

Source: Yonhap via ZeroHedge

There had previously been concern that the war of words between Trump and Kim Jon-Un would result in others getting caught in the crossfire. This was confirmed this morning when Japan was made a clear target.

“North Korea’s reckless action is an unprecedented, serious and a grave threat to our nation”
– Japanese Prime Minister Shinzo Abe

Immediately after the missile launch was detected the Japanese government’s J-Alert system interrupted radio and TV to warn citizens of the possible missile and urged them to take refuge in solid buildings or underground shelters. Bullet train services were temporarily halted and warnings went out over loudspeakers in towns in Hokkaido.

Click here to read the 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.

Weekly Outlook: Gold & Silver Earn Top Scores in Breakout as the Dollar Clings to Life Support

28-Aug-2017

As we transition from August to September within the course of this trading week, we very well could have just experienced the Black Swan event over the weekend, and its name is Harvey. Gold & silver are breaking out right now, and the dollar, well, look out below…

After spending last week in “consolidation”, the metals are already making their moves.

We have been saying a move is imminent for weeks now, and while we have not seen the rises we have seen set up on the charts, we have not seen the big drops either, and this consolidation looks exhausted considering the lack of any on the year.

The smashing of late have had little effect on the gold price and silver price in the short term. Yes, they have been able to knock down prices, as evidenced by last Friday, but the prices have not stayed down for long.

On the daily, gold looks to be holding up and ready to punch through the stout resistance:

 

 

$1300 has acted as resistance, or the line in the sand, three times so far in 2017. The battle is not finished there, however. Going back a year, we can see that gold could have some more trouble in the $1310 – $1315 range. What we should really be hoping for is a break-out through that level, then coming back to bounce off it if we must. For this week, however, I guess we could settle for a close above $1300, but at this point, we should really be expecting more, unless the smashing will continue. There was calm overnight and no sneak attacks.

Silver is fighting resistance of its own:

 

Silver is having to deal with the 200-day moving average. Once we can take out the 200-day, next stop is $17.50. It seems like so long ago that we have seen that price. In fact, it was June 6 when the white metal closed at $17.70. Could we get to that level by the end of the week? Seeing as we have been “consolidating” with silver just like with gold, we will have a move, and if we set our sights on an up-week, we would be putting in another round of higher-highs, and then the technical traders would want to get in on the action, further adding to the move up. 

Moving on to the strongest performing metals of the year, copper and palladium, well, the hater-aide in both the MSM and the alternative media is strong. The two metals, however, have converged and they are moving in unison:

 

 

Granted, Texas is not even out of emergency mode. It is worth mentioning, however, that rebuilding in the aftermath of Hurricane Harvey is going to be very copper intensive. Most people don’t realize how much of the Internet relies on the base metal. Sure, there is fiber-optics and laser, but those are not cost effective, especially when we are talking about rebuilding and recovering from losses, not upgrading from normalcy. The bottom line is that based on fundamental issues, we could see continued strength in copper.

It is too early to tell the effects on crude. The technicals look ugly as crude is about to go down and test the 50-day moving average, and a close below $46.45 would put in a new lower-low, however, once damage assessment is done on the oil industry in Texas and in the Gulf, we could begin to see major movement to the upside.

 

 

RBOB (gasoline futures) traded up 7% at one point overnight, and if, for example, we see a 10% move in crude on the week, we are talking about a close above $52. If we combine a weak dollar, and increased consumption from the heavy machinery rebuilding in Texas mire than offsetting any drop in consumption from personal automobiles, it is not far fetched to see much higher prices from here.

The stock market is barely clinging to life. Perhaps in an effort to keep it propped up for last week’s Fedstravaganza, but the S&P is barely holding on to the 50-day moving average:

 

 

Bullish for gold is a drop in yields for US Treasury paper. The 10-year Treasury Note is dropping in yield even with all the “interest rate hiking cycle” hype:

 

 

 

In fact, the 10-year is clearly looking like the next move in yield is lower, not higher. There would be some support if indeed we find ourselves in a downward sloping channel, that would be around 2.4%, but we shall see how yields are doing by the end of the week.

Not helping the “America is great again” cause is a continued weakening dollar:

 

 

 

The last time we were below 92 on the DXY was the first week in May, 2016. In the second six months of 2014 is when the dollar took off. Within a year the dollar was at 98. Now, the dollar peaked out on the weekly nearly at 104, but what has happened in the first six months of 2017? We have gone steadily down hill all year. If we see continued dollar weakness, is the next stop 82 and A full 10 points lower than where we are now?

On the calendar this week, this one is going to be action packed. There will be no time to prepare for the Non-farms Payrolls, at September 1st is this Friday. Here are some of the highlights on the economic calendar to be watching for:

  • Monday: International Trade in Goods & Dallas Fed MFG Survey
  • Tuesday: Case-Shiller HPI (20 city home price index) & Consumer Confidence
  • Wednesday: MBA Mortgage Applications, ADP Employment Report & 2nd Estimate of Q2 GDP
  • Thursday: Challenger Job-Cut Report, Jobless Claims, Personal Income, Chicago PMI, Pending Home Sales, EIA Nat Gas Report
  • Friday: Motor Vehicle Sales, Nonfarm Payrolls Report, PMI Mfg Index, ISM Mfg, Consumer Sentiment, Baker-Hughes Rig Count

As we can see, in just this small sampling of data to be released this week, there is a ton of stuff going on this week. Analysts will also be looking to see what effects the hurricane will have on the oil rig count on Friday. We can rest assured that everybody will be scapegoating the hurricane for poor economic data. This is very valid, and not to say there is not impact on the economy, but just watch the government statisticians try to blame weak data in West Virginia on the hurricane in Texas. Either way, government statisticians will have to be on the ball more than ever if they are to produce the results of a vibrant, expanding economy.

Then again, it could all just fall apart too, and that would be the Black Swan that started it all. His name was Harvey.

 

Buy Gold As Washington “Stumbles” Advise Blackrock

28-Aug-2017

– Gold set to shine as Washington stumbles
– “Bet on gold’s diversifying properties rather than political stability”

– World’s largest asset manager believes Trump and political drama in the U.S. means gold likely to rise
–  Real rates flattening out and rising political instability – Blackrock’s Koesterich
– “For now my bias would be to stick with gold” – Blackrock

– U.S. debt ceiling issue to be fractious as bankrupt U.S. hits $20 trillion debt
– Investors will again turn to gold in coming political strife

“For now I would prefer to bet on gold’s diversifying properties rather than political stability” – Russ Koesterich, Blackrock.

Not for the first time this year, Blackrock’s Koesterich has spoken about his faith in gold during times of both financial and political instability.

Those times are now, the world’s largest money manager believes. Since the beginning of the year Koestrich has been adding to the gold position of the $39bn  Global Allocation Fund. Gold is now the fund’s second-largest position.

Gold’s performance, up 12% year-to-date, is particularly interesting. A hard-to-define asset, gold is often thought to perform best when either inflation and/or volatility is rising. This year has been notable for both falling inflation and record low volatility, raising the question: What is powering gold’s ascent and can it continue? Two trends stand out:

Real rates have flattened out

Political uncertainty has risen

Real rates – plateauing and boosting gold

Gold is most correlated with real interest rates (in other words, the interest rate after inflation), not nominal rates or inflation. While real rates rose sharply during the back half of 2016, the trend came to an abrupt halt in early 2017. U.S.10-year real rates ended July exactly where they began the year, at 0.47%. The plateauing in real yields has taken pressure off of gold, which struggled in the post-election euphoria.

Heightened political uncertainty

 

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.

[KR1114] Keiser Report: Never-ending Trump Surge in The Markets

27-Aug-2017

Max and Stacy discuss Democrats not looking forward to Hillary’s ‘blame everyone but herself’ book tour. In the second half Max interviews Wolf Richter of WolfStreet.com about the never ending Trump surge in the markets.

Trump Presidency Is Over – Bannon Is Right

26-Aug-2017

Trump Presidency Is Over – Bannon Is Right

“‘The Donald’ has been White House-broken,” writes Bill Bonner in his must read daily missive on Bonner and Partners

“‘The Donald’ has been White House-broken,” was what we were trying to say, translating the phrase into something that may make sense to a French listener.

But it was too clever and complicated.

“Well, let’s just say the president has been brought into line,” we simplified.

Social Season

This is the social season in the French countryside.

Weddings, cocktails, receptions – people use the month of August to reconnect with friends before returning to work, school, and retirement in the fall.

Yesterday, we drove about a half hour over country lanes to a gracious 18th-century farmhouse. There, about 100 people had gathered on the lawn.

“You are American?” we were asked several times. “What do you think of Trump?”

We dodged as best we could. Inevitably, we were forced to explain that, yes, he is a disgrace… but, no, we would not prefer Ms. Clinton… and, no, we do not like [French president] Mr. Macron, either:

“None of them has the strength or independence you would need to buck the trend.”

“What trend is that…?”

“Oh, it’s a long story… and it is such a beautiful evening…”

The guests were a wide assortment of local farmers and Paris-based hedge fund managers. The former complain about the weather. The latter complain about the markets. Both complain about the government.

But here at the Diary… we don’t complain. We just want to know when to pack an umbrella.

Payoffs and Pimping

Yesterday, we looked at how Washington insiders have brought President Trump to heel.

He said so himself: “Decisions are much different when you sit behind the desk in the Oval Office.”

Many people believe the White House elevates its occupants so they become better people and make better decisions.

Candidate Trump may be a scoundrel or a scalawag, lusting for fame and fortune, when he announces his candidacy, they say. But when he enters the White House, the slime, incompetence, and corruption are washed down the drain. The man is born again… as POTUS.

If this were true, the Pennsylvania Avenue sewer would clog up after each election. Instead, it runs clear… because the wheeling and dealing… the payoffs and pimping… are still going on!

Alas, the White House elevator goes in both directions.

This week, President Trump hit the “down” button. Against his own “instincts”… reneging on his promises to the people who voted for him… he agreed to go along with the generals in their plan to kill more people… and spend more money… so as to make their crony friends richer and advance their own careers.

That is how things work in the “swamp.”

Today and tomorrow, we connect the dots back to the financial world.

End of an Era

Win-win deals increase prosperity. Win-lose deals reduce it.

The swamp is where the win-lose deals breed. Since the 1970s, it has grown to cover half the U.S. economy.

There, wasteful spending, stifling regulations, phony money, misleading financial signals, zombies – corporate and individual – and all the many excesses and absurdities we watch daily here at the Diary are warping honest price signals, destroying real output, and transferring real Main Street wealth to the swamp’s insiders.

Donald J. Trump promised to pull the plug. But he couldn’t even if he wanted to. And now his decisions are Oval Office decisions… that is to say, those that suit the Deep State.

He cannot drain the swamp; he is now a part of it.

There will be no cutback in domestic spending (no genuine or important reform of O’care, for example)… and no cutback in the empire’s wars abroad.

That still leaves the possibility of tax reform. But even that is extremely unlikely. The last major tax reform program was 35 years ago. The president has neither the political skills nor the ideological commitment needed to pull off another one.

No “skinny budget”… no spending cuts… no tax reform… no relief from the swamp.

And that, friends (and we don’t have to spell it out), is why Breitbart’s Steve Bannon is right: The Trump presidency is over.

Where to next?

Tune in tomorrow…

Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America’s most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.

Gold Prices This Week (LBMA AM)

25 Aug: USD 1,287.05, GBP 1,003.90 & EUR 1,090.90 per ounce
24 Aug: USD 1,285.90, GBP 1,003.26 & EUR 1,090.44 per ounce
23 Aug: USD 1,286.45, GBP 1,004.33 & EUR 1,091.68 per ounce
22 Aug: USD 1,285.10, GBP 1,000.71 & EUR 1,091.95 per ounce
21 Aug: USD 1,287.60, GBP 999.82 & EUR 1,096.52 per ounce

Silver Prices This Week (LBMA AM)

25 Aug: USD 17.02, GBP 13.26 & EUR 14.40 per ounce
24 Aug: USD 16.93, GBP 13.20 & EUR 14.36 per ounce
23 Aug: USD 17.06, GBP 13.32 & EUR 14.48 per ounce
22 Aug: USD 17.02, GBP 13.27 & EUR 14.48 per ounce
21 Aug: USD 17.02, GBP 13.20 & EUR 14.48 per ounce


Market Updates This Week

– The Truth About Bundesbank Repatriation of Gold From U.S.
– Mnuchin: I Assume Fort Knox Gold Is Still There
– Buffett Sees Market Crash Coming? His Cash Speaks Louder Than Words
– Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High
– Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since Nixon Ended Gold Standard
– World’s Largest Hedge Fund Bridgewater Buys $68 Million of Gold ETF In Q2

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.

Market Wrap: We are the Sultans of Gold & Silver Price Swing

25-Aug-2017

Cap the metals they may. Smash the metals they may. Save some ammo for another day, cause Gold & Silver didn’t come here to play. We are the Sultans of Price Swing… 

Gold & silver have been on tight lockdown all week. After gold punched through $1300 on Friday, August 18th, both metals have been range-bound and capped ever since:

 

 

Furthermore, we have been monitoring the daily chart all year, and noticing, especially with silver, that there has been very little to no consolidation. However, all that has changed this week:

 

 

 

The MSM will be quick to point out a healthy “consolidation”, “basing”, or however they would like to spin it, but one look at that chart and we know exactly what it is: Fierce capping of price ahead of the Fed’s Jackson Hole Keynesfest.

The “consolidation” is pronounced in gold as well:

 

 

 

Of course, we can rest assured that the battle for $1300 will not be pretty. This is the third defensive stance by the market manipulators this year. After the April and June gold offensives, maybe we took for granted “third time’s a charm”, and now we are finding out that since June, they have been hardening their defenses.

And then, of course, today happened. Gold and silver caught a bid, and gold popped above $1300 at 9:17 a.m:

 

(No, that’s not the elusive yet uber-bullish “Loch Ness Chart Formation”, that doesn’t happen in the metals. That is the “Cue the Fat Finger Chart Formation”)

Then, 23 minutes later, the smash began, and one minute later, for one minute, between 10:41 a.m. and 10:42 a.m., 21,135 gold futures contracts were dumped on the COMEX.

Sorry, but I’m done with the sugar-coating and the fun strike-through fonts. Let’s just call it what it is: All out desperation to keep a finger pressed down hard on that sell button until every last person who wanted to buy gold was sold to and then some. I’m sure that guy has a blister on his finger, yellow stains on his undershirt, and a ring around his collar. Here’s the volume spike close up so you can get angry, mad, or sick:

 

 

 

Today’s 21,135 contract dump merits a zoomed out look for further consideration:

 

 

We all know what happened in the wee hours of November 9th, 2016, but a closer inspection of daily volume shows that while the cartel has been successful in containing price, they haven’t been successful in really knocking it back to $1050 or anything like that. Also, in addition to the “flood the market with naked short gold futures contracts and buy them back when enough have been printed to outspend then outlast the specs”, there has been a slowly increasing volume creep all year. So much so that it looks like it is about to get very, very loud. For example, North Korea came and went, as did Charlottesville and the Total Solar Eclipse. If we live by the 24 hour news cycle as Jim Rickards states, what explaination is there that gold would have such a massive spike in volume (dumping) on a day when nothing is going on?

Publicly, the Fed ignores and avoids gold all of the time. So while Jackson Hole is a whole lot of “meh” in terms of an effect on gold, with the proxy exception of talking the US dollar one way or another,  there is really no reason to see what we are seeing. It’s not FOMC day, it’s not minutes day, it’s not Nonfarm Payrolls day, it’s not anything massively market moving day, other than a Fed convention just like all the other Fed conventions.

And so today, the metals are standing their ground. They are not on the offensive, but they are not retreating, and gold and silver have recovered all their losses within just a couple of hours:

 

 

 

It is bittersweet, because we know the metals are strong. Copper and palladium have shown us that. The pill that’s hard to swallow is the one that could have led us to a $75 day in gold and $1.00 day in silver. We had some big move days in 2016 don’t forget (Brexit & Trump), and today, we could have had a big move off of nothing but the pent up energy everybody must be tired of waiting for. All that it means, however, is that once the pent up energy cannot be contained, the cartel will wish they could keep it at $75 and $1.00 days.

If you really want to bust out the tinfoil, here is some fundamental food for wrapping it in the foil and putting it in the microwave thought. North Korea? Crickets. Racial divide and blood on the streets? Crickets. President Trump screwed this up or stuck his foot in his mouth on that? Crickets. What we do have, is a ton of this:

 

 

 

 

Now, not to belittle a hurricane or the people that stand in it’s forecast path, but think about it for a second. Fear trade? Nope. Hurricanes are local events. Partisan politics? Nope. Hurricanes don’t care about blue or red. OK, so that leaves racial tension? Nope. Harvey is not even in the top 250 boy’s names in the US:

 

 

We aren’t even sure how popular of a name Harvey is?

So as you can see, the MSM has shifted to about as non-gold sensitive of a topic as they can. Now I know what you’re thinking if you try pulling out the “but people can barter with gold and silver post-SHTF”. Yes they can and you are absolutely right. They can and they do. However, just watch. If the hurricane gets bad enough, the MSM will either blame it on President Trump, or they will throw all that racial/political/gender/everything divide out the window for as long as they cover the story and for one moment highlight the “coming together in a time of crisis”.

Gold and silver are still as bullish as ever, and the cartel is as active as ever trying to keep the price down.

In other market news, the US dollar has just put in a fresh new low on the year:

 

 

Kind of makes you wonder if there are any dollar bulls left? That was the trade of 2017 after all, and from the looks of it, they are in scramble mode trying to make the gold and silver trade not look like the real trade of the year. Cue Bitcoin?

Palladium has hit a new high on the year:

 

 

 

And so has copper:

 

 

Crude, bonds, and the stock markets get honorable mentions this week but no charts.  Crude is down slightly on the week, 10-year note yield is down on the week, and for this week’s stock market comparison, since the WSJ thinks this market is all that matters, the S&P is up about 20 points on the week.

We have been all over the Fort Knox Gold Story like an inconsiderate cousin’s fingerprint on your 2017 American Gold Eagle.

So we can’t help but leave you with this:

 

#DYK the gold bar @USTreasury Secretary Mnuchin is holding weighs about 27lbs? #UnitedStatesBullionDepository #FtKnox pic.twitter.com/fMj6Y2QShx

— United States Mint (@usmint) August 24, 2017

And as a bonus, this:

 

And as a double bonus, we hope you enjoyed this market wrap covering the most eventful unch gold & silver week ever:

 

 

 

 

The Truth About Bundesbank Repatriation of Gold From U.S.

25-Aug-2017

– Bundesbank has completed a transfer of gold worth €24B from France and U.S.
– Germany has completed domestic gold storage plan 3 years ahead of schedule
– In the €7.7 million plan, 54,000 gold bars were shipped and audited
– In 2012 German court called for inspection of Germany’s foreign gold holdings
– Decision to repatriate from Paris and New York was ‘to build trust and confidence domestically’
– 1,236t or 37% of German holdings remain in New York Fed facility
– Bundesbank wants to hold gold bullion
– U.S. government declines to audit gold reserves … doesn’t want world to realise gold’s importance in the global monetary system

Editor: Mark O’Byrne

Last Monday, U.S. Treasury Secretary Mnuchin feigned to inspect the U.S. gold reserves in Fort Knox and joked flippantly that he assumed it was there.

A day later the Bundesbank, announced that they had repatriated much of their gold reserves from the U.S. and France. Coincidence or coordination?

In 2013 the Deutsche Bundesbank announced plans to store half of its gold reserves in Germany. At the time, only 31% was stored in the country. The Gold Storage Plan involved bringing gold home from both Paris and New York.

The plan was expected to take seven years. At the time many asked why it would take so long to return just 674t of gold. The Bundesbank has completed the plan three years ahead of schedule.

The German gold repatriation was in response to the critics and or in order to safeguard the German gold reserves and ensure they are owned in a safe, allocated and segregated manner by the Bundesbank.

In the last five years the German central bank has 374t and 300t from Paris and New York, respectively. The Bundesbank opted to keep 432t in the Bank of England vaults.


Whilst the tables above (from the Bundesbank) show the repatriation of gold was ultimately successful, it has promoted much discussion about the security of gold in central banks.

The decision to move the gold back to home soil has also vindicated many who have long argued about the murky gold reserve dealings of the United States.

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.

[KR1114] Keiser Report: Empire of Debt

25-Aug-2017

We discuss the narcissism of central banks holding $15 trillion in their own assets. We also discuss Morgan Stanley saying that some of their investors see Bitcoin as a better hedge to inflation than gold. Max continues his interview with Dan Collins of TheChinaMoneyReport.com to discuss the looming trade war between the US and China, and the mountain of US treasuries owned by China.

Double Down with Craig Hemke

25-Aug-2017

Spanish conquistador, Herman Cortes, once opined that the Spanish had “a sickness of the heart that only gold can cure.” Do today’s gold investors also have a sickness of the heart that only a rising fiat exchange price can cure? And is bitcoin’s charm standing in the way of that cure? Craig Hemke of TFMetalsReport.com says that gold and bitcoin complement each other and those gold bugs hating on the cryptocurrency sector have got it wrong. But will gold rise again? Hemke says watch out for $1320 and then maybe the sickness at the heart of the gold investor community will be cured.

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