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September 21 2018

moneymetals

Oil Prices, War Fears, and Rising Inflation All Point to Gold Strength Audio Player

Well now, without further delay, let’s hear this week’s exclusive interview with the man who famously advises people to have always have guns, gold and a getaway plan.

Gerald celente

Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps most well-known Trends forecaster in the world, and it's always great to have him on with us.

Gerald, thanks for the time again today, and welcome back.

Gerald Celente: Oh, thanks for having me on, Mike.

Mike Gleason: Well Gerald, one of the hot topics in the markets today is the escalating trade tensions. Trump just announced another $200 billion in tariffs on China and he looks ready to more than double that if the Chinese should retaliate. The President is confident the U.S. can win a trade war. Do you share that optimism? How do you see this playing out?

Gerald Celente: I absolutely share that. Because I mean, here's the deal. If your or I were to do business and I'm making $350 billion more than you are, are you going to want to renegotiate this? Hey listen, something's wrong over here. So, when you look at even with the tariffs that Trump is putting on, that still amounts to a very small percentage of China's GDP, about 0.3%, or something like that, 5%, 6% tops. So China's going to negotiate. They're not going to give up a very lucrative business deal, so they could keep making more when the other business partner wants a better share.

Mike Gleason: And how do you see the escalating tariffs impacting markets? So far the response appears mixed. The dollar seems to be benefiting, and metals are suffering. We aren't sure the markets have it right when it comes to the dollar though. It seems to us that tariffs should drive price inflation. Either Americans pay a higher price for the imported goods, or replace them with more expensive domestic products. And the Chinese aren't likely to be buying as many dollars or treasuries if exports to the U.S. fall – to say nothing of their ability to wage and all-out currency war against the dollar. But so far, at least the dollar is getting stronger in foreign exchange markets. What are we missing?

Gerald Celente: Well, I think what people are missing is they're making too much of a deal of the trade war. It's every day. It's almost become stupidity with the business media. Every day they're going, “the market goes up because trade wars eased. The market’s down because trade fear is increased.” I mean, come on. What are they kidding? I mean, the world is bigger than that. Even what you saw car sales start slumping in China, the headlines blamed the trade wars. Does the average person give a damn about a trade war? They're buying what they're buying, they got what they got. If they don't have it, they don't spend it. If they have it, they spend it. They don't know what's going on behind the scenes and the details of a trade war. The media has dumbed down so much… it's every day. It's one excuse. And as far as the dollar going up, it's interest rates.

I mean, the United States is raising interest rates. You're looking at what, even with the United States raising interest rates, what are you looking at the overnight, the Fed funds rate? 1.75 to two? And what is it 1.5 in Canada and the U.K. Negative interest rates in Europe and the European Union. Negative in Denmark. Negative in Sweden. Negative in Japan. I mean, it's ridiculous. So what I'm saying, Mike is that the markets cannot take a rate increase. That's why the currencies are going down. And matter of fact, we just heard from the number two guy in China, Lee, saying that to think that the Chinese, he said, want to devalue our currency is ridiculous. He said we're not going to make up that much more trade on having our currency decline. Because by the same token, you look at China, what are they the largest importer of energy in the world? And now the Yuan is going down, and oil prices are going up. Oh, and what are oil prices based on? Petrodollars. So now as their currency declines, they got to input more energy. And it's based in dollars, as the dollar gets stronger, they don't want this to happen.

So to me it's a lot of misinformation out there. And again, I'm no Trump fan. I mean, I think the guy is ridiculous on a lot of stuff. But the media is so anti Trump that they'll keep using one play a day, and overlooking the bigger story.

Full Podcast here: https://goo.gl/9oqzzB

September 19 2018

moneymetals

Trump’s Backdoor Power Play to Rein In the Fed

“Just run the presses – print money.”

That’s what President Donald Trump supposedly instructed his former chief economic adviser Gary Cohn to do in response to the budget deficit. The quote appears in Bob Woodward’s controversial book Fear: Trump in the White House.

Trump disputes many of the anecdotes Woodward assembled. But regardless of whether the President used those exact words, they do reflect an “easy money” philosophy that he has expressed many times before.

Trump Likes Low Rates, Loose Money

President Trump has described himself as a “low interest rate person.”

Trump and the federal reserve

This past summer, Trump launched a very public attack on the Federal Reserve’s rate hiking campaign. He wants it to stop because it’s making the dollar “too strong” and threatening to undercut his tax cut fiscal stimulus.

There’s only so much dollar strength the U.S. economy and U.S. debt and equity markets can take. President Trump is keenly aware of the risks.

A Fed rate hike next week is a given at this point.

The Trump-versus-Fed feud will likely heat up again in December if the central bank raises its benchmark short-term rate at its scheduled policy meeting. Although a December hike is far from certain, Fed chair Jay Powell and company seem intent on raising interest rates again – and possibly a couple more times in 2019 if the markets don’t melt down before then.

Additional tightening will increasingly put the central bank on the wrong side of the President’s Twitter feed. If Donald J. Trump wants to put more than social media pressure on Fed officials, he can threaten to remove them.

Trump himself appointed Powell, a decision he now apparently regrets. It would be unprecedented for a president to fire a Fed chairman before his term is up... but not necessarily inconceivable. After all, President Trump has done a number of unprecedented things, as the anti-Trump media are wont to remind us.


Read more: https://www.moneymetals.com/news/2018/09/18/trumps-power-play-fed-001619

September 14 2018

moneymetals

Gold vs. Bitcoin

Since its introduction in 2009, bitcoin has taken the financial world by storm.

The enormous gains in bitcoin’s value are attracting attention around the world, both positive and negative. People ranging from everyday consumers to central bankers now have an eye on the digital currency.

Some remain skeptical. Several high-profile hacks in which tens or even hundreds of millions of dollars-worth of bitcoin were stolen from bitcoin exchanges have raised doubts that a purely digital asset can ever be secured. Others wonder if money without official government backing and no physical manifestation can really succeed.

On the other hand, many see bitcoin as the future of money – destined to end run banks and governments and the fiat currency systems they control.

What is Bitcoin?

what is bitcoinBitcoin is a peer-to-peer, decentralized, digital currency with more than 10 million holders as of this writing. The lure of decentralization, lower transaction fees, and pseudo-anonymity has fostered adoption around the world. And people are increasingly looking for alternatives as central banks around the world continue to abuse national currencies.

There is a particular concern regarding the U.S. Federal Reserve Bank’s perpetual devaluation of its Federal Reserve Notes – commonly known as dollars. Although it is no longer a true dollar, which was historically defined in terms of a certain amount of silver, today’s U.S. dollar is still the world’s reserve currency. And Fed officials recognize no limits in terms of how many dollars can be created.

​Check it out here: 
https://www.moneymetals.com/guides/bitcoin-vs-gold


August 21 2018

moneymetals

Spot Prices Are Falling, But Premiums Are on the Rise

Gold and silver premiums – the price dealers add to the melt value of an item to cover manufacturing and overhead – began climbing in the past two weeks.

Many clients see falling gold and silver spot prices as an opportunity to buy, but some are disappointed to find the premium for the item they want is suddenly higher, negating some of the price drop.

The challenge they face is that lots of other bargain hunters are trying to jump on the same opportunity.

Supply & demand

Premiums are very sensitive to supply and demand in the retail market for finished coins, bars, and rounds, and the reasons are pretty straightforward.

First, when prices drop, retail bullion investors stop selling and start buying. That has a profound effect on the availability of resale, or secondary market, product inventory.

The large quantities coins, bars, and rounds coming back to market in the past year or two have driven premiums to the extraordinarily low levels we saw recently. Now, supply from the secondary market is drying up fast.

Second, there are only a few mints and refiners making coins, bars, and rounds. Like any manufacturer, they gear production to market demand. Scaling up takes a bit of time, and it isn’t something most will do without first developing some confidence that the higher demand will persist.

​Continue reading: https://goo.gl/cRFcUF​

July 17 2018

moneymetals

Gold & Silver Investors’ 8 Commandments for Avoiding Rip Offs

For every promising investment opportunity you come across, there are multiple opportunities for bad-faith brokers and hucksters to try to rip you off.

It could be undisclosed commissions and fees in an annuity, unwanted accounts opened up by a banker seeking additional fees, trades sabotaged by market manipulators, or any number of other schemes.

Rip-off artists, unfortunately, operate within the precious metals space as well.

Most recently, a scammer posing as a government agent in order to gain people’s trust was convicted of selling counterfeit gold bars and phony Morgan silver dollars. He took one investor for $11,000, according to reports.

You can avoid this type of scam as well as other common cheats when buying or selling precious by heeding the following guidelines.

1. Avoid “Too Good to Be True” Deals

If a price on a bullion product sounds too good to be true – or comes with exorbitant incentives or exaggerated claims – you should be suspicious.

Too good to be true!

Gold and silver bullion products do not legitimately sell below spot prices. Individuals holding precious metals can visit a dealer and sell items immediately, for full value. Given that everyone has this option, it is highly likely anyone offering items well below actual value is trying to stick it to you.

Legitimate dealers cannot afford to offer items way below cost either. Dealers must charge small premiums above spot prices to reflect product minting costs and the costs of doing business. (One notable exception: 90% silver U.S. coins minted prior to 1965 (aka “junk” silver) which exhibit significant wear occasionally become available at melt value or even slightly lower.)


Check out the other commandments.. (https://goo.gl/Zb8zg4)

June 26 2018

moneymetals

U.S. Gold Exports to London Surge

As U.S. gold exports to Hong Kong and China fell 25% in the first four months of the year, London picked up the slack. According to the USGS, U.S. gold exports to London surged more than doubled from January to April, compared to the same period last year. Interestingly, the amount of gold exported to London during this period nearly equaled the total U.S. domestic gold mine supply.

From the data reported in the USGS Gold Mineral Industry Survey’s, U.S. gold exports to the U.K. (London) jumped to 64.3 metric tons (mt) Jan-Apr, versus 25.5 mt during the first four months last year:

Total u.s. gold exports to the u.k.

Here is the breakdown of U.S. gold exports to London for each month:

Jan = 12.2 mt

Feb = 12.1 mt

Mar = 21.2 mt

Apr = 18.8 mt

Total 64.3 mt

As I have mentioned, a lot London’s gold is exported to China and Switzerland. And then, the majority of Switzerland’s gold is exported to Hong Kong and China. For example, according to the statistics on GoldChartsrus, in March, the U.K. exported 16 mt of gold to China and 32 mt of gold to Switzerland. In the very same month, Switzerland exported 80 mt of gold to Hong Kong and China. So, most of the west’s gold still ends up in Hong Kong and China.




Continue reading the article 

June 25 2018

moneymetals

Sound Money Needed Now More Than Ever

The sound money movement reemerged on the national political scene a decade ago. In 2008, the financial crisis brought in a fresh wave of U.S. gold and silver investors.

Ron Paul and the Tea Party advocated for limiting government and ending the Federal Reserve system. Sound money advocates made real inroads in recruiting Americans to their cause based on evidence that the nation is headed for bankruptcy.

The implications of the most recent financial crisis went way beyond budget and finance.

Many Americans grasped the more significant lesson. The perpetual expansion of government spending lay behind the corresponding decline in personal liberty for them, their children, and their children’s children.

National debt 1940 - 2008

Dishonest money is a dream for politicians and bankers, but it is a nightmare for citizens. Charts showing the final abandonment of the remnants of the gold standard in 1971 and the exponential rise in government debt helped people make the connection between dishonest, unlimited fiat money and unlimited government.

Here is one example from the Daily Caller...

The trend shown on this chart has not changed or improved. The red bar on the right hand side of the current chart now stands more than twice as high with total government debt north of $21 trillion.

There is no credible effort in Washington to limit spending. It is safe to say U.S. deficits and the corresponding borrowing will continue to rise exponentially. It will continue until confidence finally collapses; either in the nation’s ability to repay, or in the dollar, or both.

The nation needs sound money more desperately now than ever.

Unfortunately, the debt chart above isn’t the only chart that tells a damning story. Below is a chart from TF Metals Report which shows the regular beatings given to silver in recent months. The picture for gold looks similar.

​Continue​ 
reading here: ​https://goo.gl/oG82o6

June 22 2018

moneymetals

Gerald Celente:Why You Still Need Guns, Gold, and a Getaway

Well now, without further delay, let’s get right to this week’s exclusive interview.

Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world, and it's always great to have him on with us. Gerald, thanks for taking the time again today, and welcome back.

Gerald Celente: Thanks for having me on.

Mike Gleason: Well, Gerald, the potential for a trade war is the hot topic in the financial press these days. Around here, the question is what escalating concerns over trade might mean for the precious metals markets, and we would like to get your thoughts on that. But first, please give us your take on the President's trade policy in general. Some people think the U.S. has been a major beneficiary of trade. We've been able to import real goods and services in exchange for increasingly worthless dollars. Others hate what so-called globalization has done to U.S. manufacturing and think Trump is delivering a long overdue warning shot to nations who have taken advantage of the U.S. So, where do you stand on all this?

Gerald Celente: Well, we've been in the business since 1980. When NAFTA began, actually under Reagan began it trying to push through and Bush Sr., and they couldn't push through much, but Bill Clinton was the one that really brought us into NAFTA and China into the World Trade Organization. So, you just look at the numbers, and the numbers speak for themselves. Before we were in NAFTA, we had basically a neutral exchange in terms of merchandise trade deficit between Mexico and the United States. And now we have a $71 billion deficit. Who would do business like that? Would you do business with someone where you lose $71 billion a year? Then when you look at China ... and we lost by the way about 975,000 manufacturing jobs, and Clinton promised that we would gain 200,000. But I didn't have sex with that woman, Monica Lewinsky, and I smoked but I didn't inhale, so you know the guy's full of it from the beginning and to the end, and he's still a hero.

Then you look at China, what he did bringing them into the World Trade Organization. We lost about 3.5 million jobs, and we have a merchandise trade deficit with them of $375 billion a year. You can't blame Mexico or China or other countries on this. You have to, as we look at it, put the blame on the companies that went overseas to get their products made by cheap labor and then bring them back to the United States and sell them so they could gain greater profits. If you can't have an agreement with workers in your country to pay them a living wage, go to a slave labor country and get them made over there is basically what happened.

For example, 97% of the shoes and clothing that we wear are made overseas. When you go back to the 1990s, that wasn't true. It was being made over here. And then you look at the standard of living and the declines. The facts are all there. A matter of fact, we're right now, our standard of living of real personal income is below 1999 levels. Again, we don't blame anybody other than the ones that did it. China and all these other countries, Vietnam, they didn't have the technology. The Europeans and the Americans gave them the technology to do it. So, they sold us out.

So what Trump is doing with this, as we see it, this is typical Trump's Art of the Deal negotiation strategy that we point out in our Trend Alerts. You take North Korea, for example. He calls the guy Rocket Man, a moron, a maniac, and then after he meets with him, he's an honorable, great guy. The deal is done. He goes to the extremes. And that's what we believe he's doing with the tariff situation, because again, China's only buying about $130 billion worth of our goods. And they're selling us $375 billion. Are they going to kill the deal? Of course not. So, there's going to be a negotiation of this. Bottom line is, Mike, at this level, we don't see a trade war coming yet. It's not in the cards right now.

Mike Gleason: Now, when it comes to the gold and silver markets, the impact of trade policy will, we think, largely depend upon how that policy impacts the U.S. dollar. So far, the foreign exchange markets are reacting as if a potential trade war might be good for the dollar. It has been strengthening relative to other world currencies. Now, we're not so sure the markets have it right. The U.S. may run massive trade deficits on lots of products, but the one product that we export a ton of is the U.S. dollar. Anything that reduces this demand for the greenback overseas is liable to cause some problems, and the dollar is already under attack as the global reserve currency. What do you think? Will these escalating trade conflicts be good or bad for the dollar, and good or bad news for gold?


Read/Listen to the entire podcast here: 

June 12 2018

moneymetals

The Dangers of Investing Based on Phony Government Statistics

President Donald Trump recently took to Twitter to boast, “The U.S. has an increased economic value of more than 7 Trillion Dollars since the Election. May be the best economy in the history of our country. Record Jobs numbers. Nice!”

“We ran out of words to describe how good the jobs numbers are,” reported Neil Irwin of the New York Times, amplified in a Trump retweet.

Increase

If you believe the headline numbers, joblessness is at a generational low with the economy booming.

Trillions in nominal value added to the stock market since Trump’s election. GDP up over 3% in the second quarter. 223,000 jobs added in May. Unemployment at an 18-year low of 3.8%.

On the surface, this all paints a beautiful picture for the economy and stock market. But dig a little deeper, and the numbers aren’t quite as bright they appear. All that glitters is not gold.

Headline Unemployment Number Is Fake News

Donald Trump himself put his finger on one of the main flaws with the unemployment number back when he was a private citizen.

“Unemployment rate only dropped because more people are out of labor force & have stopped looking for work. Not a real recovery, phony numbers,” he posted on September 7th, 2012.

The headline unemployment number isn’t any less phony in 2018. Though it has improved under Trump’s presidency – in large part because of his pro-growth tax cuts and deregulation – the statistic is still derived from a dubious formula.

Back in 2012, Trump rightly pointed to the large numbers of workers who had dropped out of the labor force but weren’t counted among the ranks of the unemployed.

You can find the article here:(https://www.moneymetals.com/news/2018/06/11/the-dangers-of-investing-based-on-phony-governments-statistics-001550)

June 08 2018

moneymetals

Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts


Michael pento

Mike Gleason: It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. Michael is a well-known money manager and a fantastic market commentator, and over the past few years, has been a wonderful guest and one of our favorites here on the Money Metals Podcast. We always love getting his highly-studied Austrian economist viewpoint.

Michael, welcome back, and thanks for joining us again.

Michael Pento: Thanks for having me back on, Mike.

Mike Gleason: Well, Michael, we were struck by one statistic in particular in the latest edition of your always great Pentonomics commentary and we urge people to sign up for your email list, so they can start getting those themselves, if they're not doing that already. But in that piece, you referenced Chapter 11 bankruptcy spiking 63% in March versus the same month a year ago. This is a dramatic move, and it tells a very different story than the one people are hearing all day long on CNBC these days. You also mentioned the carnage in the retail sector, rising delinquencies in the subprime auto loans and other indicators, which are back to levels we last saw just before the 2008 financial crisis.

Meanwhile, the talking heads are going on about how strong the U.S. economy is, and to be fair, they can point at statistics such as unemployment, strong performance in the equities, at least until recently, consumer sentiments, and other positive signs. At this point, most Americans think the U.S. economy is in better shape and likely to get stronger, but we know at key turning points in the markets, most people wind up being wrong. Now, you are certainly sounding the alarm here, Michael, so give us your thoughts on the real state of the U.S. economy, and what are a couple of the key indicators, and what are those indicators telling you about what we should expect in the months ahead?

Michael Pento: Well, Mike, first of all, this kind of reminds me a little bit of maybe late 2007, early 2008. And I want to remind all your listeners that the economy entered a recession officially, for NBER rates recessions, in December of 2007. We were already in a recession at the end of 2007, but nobody really knew it. The stock market was still doing okay. And if you look at the metrics, some of the metrics that you quoted in that question still looked very well and fine and dandy, but underneath that ersatz construct, the economy was eroding very quickly. The yield curve had already inverted. Bank lending was drying up. And home prices were already in the process of rolling over. You fast-forward to today, and you can point to many things that will make you think the economy is doing well. You look at the JOLTS, Job Opening Labor Turnover construct. If you look at ISM Manufacturing surveys, we still have some time to go before this recession becomes absolutely, positively manifest.

But here's what's going on underneath. Let me just show you how, and let me try to prove to your listeners and your audience why this particular edifice is built of cards, this economic edifice is going to wash away. Let's just take a couple of things that I want to point out to your audience. In the wake of the Great Recession, it became clear to me that the level of asset prices along with the amount of debt outstanding in the world absolutely mandates that interest rates remain near 0% and never normalize. Otherwise, the entire artificial financial construct falls apart. This is the only thing keeping everything together. So, this is the rubber bands and tape and glue that's keeping Japan solvent, that's keeping the eurozone solvent, that's keeping China any semblance of solvency, and even in the United States.

Let me give you an example of what I'm talking about. If you look at the total value of equities as a percent of GDP, it's now at a record high, very close to 150%. If interest rates move too far off the zero bound, that ratio would close by the denominator, which is GDP, falling, but the numerator, which is asset prices, crashing much, much faster. Let me give you one more example. You touched on it a little bit when you mentioned business debt. Corporate debt as a percentage of GDP is also at a record high. These are nominal records and as a percentage of the economy. And also, the credit quality of that debt is at a record low. As this ratio contracts, what you'll see is GDP contracting again, but corporate debt defaulting in spades, which will manifest into a global recession/depression, which will be marked by rapid deflation. That is the condition of the global economy today. It's held together by artificially low rates, which are now in the process of being removed.

Don't forget, in the United States, QE ended in, I believe, 2014. QE ended. We have raised rates six times. There'll be a seventh rate increase next week. The ECB went from €80 billion per month to €30 billion. They'll probably end that program. We'll find out more next week. They'll probably end that program by the end of this year. And what you have is a condition when you have global debt as 330% of GDP, $230 trillion, up $70 trillion since the Great Recession. Interest rates are going to start to rise, because central banks have the hubris to believe that they solved all of the world's problems. And it is that rising debt, which is going to pop asset prices and pop corporate debt and personal debt and student loans and credit cards and leveraged loans, CLOs, these are all of the things that are going to pop simultaneously. It's going to happen very quickly. And unfortunately, I believe it is going to be much worse, the fallout is going to be much worse, than that of 2009.

Mike Gleason: People listening to this would say, "Well, why do they have to raise rates? Maybe they'll just stand where they are or go with the lower," but obviously there's a credibility factor here that's going to probably prevent them from reversing course, at least talking about the Fed. They've talked about raising interest rates. They're probably going to do it because their credibility is at stake. Isn't that fair to say?


You can find the entire podcast here​

June 05 2018

moneymetals

How Savvy Investors Do (and Don’t) Hedge against Inflation

Inflation is a corrosive force that gradually – and sometimes rapidly – eats away at the nominal value of savings and investments.

It is perhaps the biggest threat looming on the horizon for millions of retirees who have been steered into assets marketed as “conservative” – such as dollar-denominated money market accounts, bonds, and annuities.

Inflation silently robbing you of purchasing power since 1913

According to the Aegon Retirement Readiness Survey 2018, an alarmingly large proportion of the population doesn’t understand basic financial concepts such as inflation.

Consider this question from the survey: “Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After 1 year, how much would you be able to buy with the money in this account?”

The question is actually even easier to answer than it first appears. To get it right you only have to select among a list of possible choices that includes “less than today,” “more than today,” and “the same as today.”

Obviously, if inflation is running at 2% a year, then a 1% yield on your savings is neither growing nor preserving your purchasing power. The correct answer is “less than today.”

That may be obvious to you. But it’s not to everyone.

Among U.S. respondents, only 55% answered the inflation question correctly!

A score of “55” is equivalent to an “F” – as a nation, we are outright failing to grasp the basic concept of how inflation negatively affects savings.

Widespread public ignorance about inflation works, perversely, to the advantage of governments, central banks, commercial banks, and peddlers of fee-laden, inflation-lagging financial products such as fixed annuities.

Investors who are savvy about the inflation threat know that conventional annuities, bonds, and savings accounts are all vulnerable to losing value in real terms.

But those seeking protection from inflation can still run into trouble by venturing into flawed "inflation hedges."

Think twice before sinking money into the following assets…



June 04 2018

moneymetals

Money Metals Is the Best Place to Sell Your Metal (Even If We Don’t Think You Should)

We don’t talk about it much, but Money Metals Exchange is literally the best in the nation when it comes to buying precious metals from clients who need to sell. We’ll explain why that is in just a moment. First, however, it’s important to explain why we don’t promote it, despite having several competitive advantages.

We just don’t think most people should be selling metals, at least not now.

Buy, hold, sell

In fact, holding a position in physical bullion is, we believe, more important than ever. Our position on that hasn’t changed, even though the sideways action in the metals markets in recent years has sometimes been frustrating and difficult to watch.

The dollar’s future is more bleak than ever. The U.S. borrows too much, spends too much, and promises too much.

A national bankruptcy is coming and it will destroy confidence, the ephemeral foundation underpinning the Federal Reserve Note dollar.

We believe this is a truth which cannot be avoided, and no amount of price rigging or central economic planning can change it.

That said, it has always been a priority for us to make an honest and fair two-way market for our clients. We’re committed to supporting them whether they need to buy OR sell.

And there are, of course, plenty of good reasons to sell metal. Sometimes folks simply need cash for some other purpose – and gold and silver are highly liquid assets. Or maybe they simply disagree with our take on where the precious metals markets are headed.

So Money Metals has been steadily building tools to make it even easier for sellers as well.

​Continue reading the article on MMX

June 01 2018

moneymetals

Axel Merk Exclusive: Inflation & Precious Metals to Rise, Fed to Act Late

Well, now without further delay, let’s get right to this week’s exclusive interview.

Axel merk

Mike Gleason: It is my privilege now to welcome back Axel Merk, President and Chief Investment Officer of Merk Investments and author of the book Sustainable Wealth. Axel is a highly sought after guest at financial conferences and on news outlets throughout the world and it's great to have him back on with us.

Axel, it's a pleasure to have you join us again today and thanks very much for coming on.

Axel Merk: Great to be with you. What a week.

Mike Gleason: Exactly. Well, Axel when we spoke to you in February the equity markets were in the midst of a sell off and some significant volatility, which had been extraordinarily low, came roaring back to life. Since then, the stocks have recovered some. The S&P regained about half of what it lost by the end of February and has been trading in a range since then.

Our thoughts are that precious metals are trading inversely correlated to equities markets, at least for now. Unless we get a pullback in stocks or more appetite for safe-haven assets it will be hard for metals to get much going to the upside. But what are your thoughts on the relationship between gold prices and stock markets, Axel? And what factors do you expect to be driving stocks between now and say the end of the year?

Axel Merk: Sure, and for context I think we should just mention we are talking before the Non-Farm Payroll Reports (are out), so who knows what's happened to markets since we have talked? One of the things I don't recall if I mentioned in February is, ever since last December, and I still believe in that, the markets have been a bit like a washing machine. That correlations have been breaking down. And, if you go back to, kind of, all the way to the financial crisis, that's the 2008 one, not the one from a week ago, that means that whenever there was a crisis the Fed bought treasuries. And so whenever “risk” falls off, when equities are plunging, bonds were rising. And that kind of ingrained this perception about certain types of correlations and so, similarly, the price of gold was actually reasonably highly correlated to that of treasuries. And so we got this thing that gold and the stocks are sometimes moving in tandem, sometimes they move in opposite directions.

Since January 1970, if you look at monthly correlations, the correlations between stocks and bonds is 0.00. So, there is no correlation. Yet, we get caught up in this thing that, for months at a time, sometimes there’s a correlation that is significant. I think the most noteworthy thing of late is that yields have been, until a good week ago, have been matching higher and the price of gold was falling up. And then, conversely, when bond yields were falling, gold didn't rise.

And so, gold has kind of marched on its own in some ways and I happen to believe that a lot of the buyers of gold these days are doing it because they are concerned about the equity markets because of volatility spiking. And the reason why volatility and the price of gold are related is because gold doesn't have cashflow. And that means the future cashflows don't get discounted more, whereas, if you have a quote unquote risk asset, like equities, and volatility increases, those future cashflows get discounted more and the prices of equities, all else equal, tends to fall. So, that's why in “normal” circumstances the price of gold should rise when equities tumble. Obviously, that doesn't always happen.

Mike Gleason: You pay more attention than most people to events in Europe and the European markets. Lately, troubles in the PIGS nations have crept back into the news. Populace in Italy and Spain are making hay by opposing EU imposed austerity and it's a reminder that deep fundamental issues remain and the union may not survive. Let's start by getting your take, if we can, on the overall status of the EU. Will there be any high-profile exits, perhaps by Italy or Spain? Is Great Britain going to complete its exit? Or are you expecting the EU to weather the storm here, Axel​? 


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May 29 2018

moneymetals

GLOBAL FINANCIAL BREAKDOWN CONTINUES: Economic Growth Chokes On Massive Debt Increases

The U.S. and global economies are choking on a massive amount of debt. While Wall Street and the Mainstream financial media continue to rationalize the skyrocketing debt as merely the cost of doing business, the disintegrating fundamentals point to an economic catastrophe in the making.

Of course, a full-blown economic meltdown may not occur this year or even next, but as time goes by, the situation continues to deteriorate in an exponential fashion. So, the cheerleaders for higher stock, bond, and real estate prices will continue to get their way until the economy is thrown into reverse as decades of increasing debt, leverage and margin finally destroy the engine for good.

Yes, I say for good. What seems to be missing from the analysis is this little thing called energy. The typical economist today looks at the global markets much the same way as a child who is waiting for the tooth fairy to exchange a tooth for a $20 bill. When I was a kid, it was $1 per tooth, but like with everything today, inflation is everywhere.

Mainstream economists just look at market forces, percentages, and values on a piece of paper or computer. When economic activity begins to fall, they try to find the cause and remedy it with a solution. Most of the time, the solutions are found by printing more money, increasing debt, changing interest rates or tax percentages. And… that’s about it.

There is no mention of what to do with energy in the economist’s playbook. For the typical economist, energy is always going to be there and if there are any future problems with supply, then, of course, the price will solve that issue. Due to the fundamental flaw of excluding energy in College economic courses; the entire profession is a complete farce.

Unfortunately, even the more enlightened pupils of the Austrian School of Economics fail to understand the Thermodynamics of value. Instead, we are only taught about SUPPLY & DEMAND to impact price. While supply and demand forces impact price, they only do so over a short period of time. However, the primary factor that determines price (for most goods, services, commodities, metals & energy) is the cost of production. Supply and demand only pull price above or push it below the cost of production trendline.

Regardless, you don’t have to take my word for it, just look at the following charts below.


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moneymetals

David Smith: Debilitating Inflation Is Like an Army of Termites Eating Away Your House

Well now, without further delay, let’s get right to this week’s exclusive interview.

David smith

Mike Gleason: It is my privilege now to welcome back David Smith, Senior Analyst at The Morgan Report, and regular contributor to MoneyMetals.com.

David, thanks for joining us again, how are you?

David Smith: You bet, Mike. It's great to speak with you again.

Mike Gleason: Well David, we published an article you wrote on inflation this week on our MoneyMetals.com website, and it's really great, by the way, and I hope everyone listening will take a few minutes to read it, because the subject matter, that being inflation, is very timely.

Right now, metals are suffering because of a rally in the U.S. dollar. There's lots of talk on Wall Street about how well the dollar's performing over the past few weeks, but traders, of course, are focusing exclusively on the dollar's exchange rate with other world currencies. You and I know that isn't really what matters. What counts is not how many euros or yen the dollar will purchase, it's how much gasoline, or housing, or food it will buy. And the reality is that it buys less of those things every year. We have inflation regardless of whether you define the term as an increase in the money supply, or as an increase in the price of goods and services.

However, precious metals have fallen in recent weeks simply because the dollar is stronger in foreign exchange markets. The fact that the dollar buys more yen is trumping the fact that the dollar buys less oil. It's as if we have deflation but the truth is, inflation is actually positive and starting to accelerate. So, what gives here, and how long do you think it will be before Wall Street figures out what is really happening to the dollar's value, David?

David Smith: Well, Mike, I think a lot of it has to do with Wall Street looking at the exchange rate because they're asking themselves what effect will it have on the profitability of companies that do business overseas or that import things and it has a significant effect on them if there's a change in the dollar's relation vis a vis to the currencies.

But the more immediate effect happens to the rest of us because we start paying more with inflation for things that we buy and sell on an everyday basis. So we're in a different universe from Wall Street in that regard. I don't know about you, but I've noticed the price of services going up substantially. Some prices have stayed the same for several years at the grocery store, beyond just the normal seasonal fluctuations of produce that you might expect to be more like avocados certain time of the year.

But a lot of other things, too, that normally have been pretty stable seem to have a built-in upward bias and all that does is to take more and more purchasing power out of our pockets, yours and mine, and the people listening to this, and place them someplace else. So, it's kind of a subterranean type of thing that's going on but it's not to the good for any of us.

Mike Gleason: Yeah certainly, well put and obviously the markets seem to be focusing very much on what it does relative to those other currencies and not really what it's buying, like you said right there. I mean everyone can attest to the fact that things are getting more expensive. There's no doubt about that.

As you have written, inflation is a destructive force for most of us. The powers that be have done a masterful job of painting a degree of inflation as somehow healthy for the economy, but you spend a lot of time traveling in South America, as you mentioned in this week's article. So you've seen firsthand what is happening in places like Argentina and I guess the government there has given up talking about how wonderful it is that money buys less every year. Obviously nobody there is going to be buying that line of bull anymore.

In Venezuela, people are starving, and violence is on the rise. Talk a bit if you would about what a rampant inflation looks like on the ground. You recently took another trip to South America. Tell us what it's like when confidence in the money begins to fail.


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moneymetals

Inflation: The People's Enemy. The Government's Friend.

When you can lie about money, you can lie about anything. ~David Morgan

We can argue about the definition(s) of inflation until the cows come home - some economists spend a career trying to nail it down.

But for clarity's sake, we'll use the definition of the Austrian School (Mises.org) as an increase in the money supply. This is really the correct one, regardless of any bias of dogma, "schooling" or the mainstream media. Although most everyone defines inflation as an increase in the price of goods and services, this is actually a result.

Most of us have been taught that inflation is all right as long as it doesn't get out of control. In the short term, it can benefit those able to manage cash flow in business or with real estate for which they can service loan interest and taxes.

But over time, it's a safe bet that a period of rising prices will be detrimental to most of the population. Distortions in the economy increase to the point where it becomes almost impossible to determine the real price of anything.

How much demand is attributable to a desire for consumption, rather than a hedge against higher prices?

The truth of the matter is that inflation – at any level – is basically stealing! Things like an expanding money supply, increased "velocity," or rising prices due to demand-supply imbalance, add additional confusion.

Last year, well before the current destructive inflationary moon-shot in Venezuela caused literally hundreds of thousands of impoverished residents to flee into neighboring Brazil and Colombia, it was rumored that an ounce of silver could buy a several month's supply of food; an ounce of gold, a house. Imagine their purchasing power now!

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May 04 2018

moneymetals

Greg Weldon: Stock Market "As Overextended as Anything I’ve Ever Seen" Audio Player

Mike Gleason: It is my privilege now to welcome in Greg Weldon, CEO and President of Weldon Financial. Greg has over three decades of market research and trading experiencing, specializing in the metals and commodity markets and even authored a book in 2006 titled, Gold Trading Boot Camp where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce. He's a highly sought-after presenter at financial conferences throughout the country and is a regular guest on many popular financial shows, and it's great to have him back here on the Money Metals Podcast.

Greg, good to talk to you again today and thanks for coming on.

Greg Weldon: Thanks, Mike. My pleasure.

Mike Gleason: When we spoke to you last back in February, Greg, we talked about the U.S. dollar. It had been sliding for more than a year and looked weak. Since early April, however, the greenback has been rallying hard. The move has been weighing on gold and silver prices over the past couple of weeks. What is your take on the dollar's recent move higher? What's driving it? Do you think it has further to climb or is this a bit of a sucker's rally?

Greg Weldon: Well, how about all of the above? I think that it's a corrective move first of all. I see an upside push maybe towards 96 would be kind of a target for a rally here in the dollar. I think the secular pressure on the dollar remains in full force, and that is Twin Towers deficits particularly the deepening U.S. budget deficit, how that links into first of all the tax cuts of course, but really more significantly, the rise in interest cost. So you're kind of in this cycle here where higher interest costs beget higher debt which begets deeper deficits which begets higher interest costs, so on and so forth.

I think longer term by the end of the year we're probably looking at a lower dollar, but having said that I think last week gave us a really good kind of example as to why the dollar has pushed higher here, and it really kind of only broke out in the last few days. And I think that's on the back of the downside reversal you have going on in some of the European bond markets after Mario Draghi's press conference last Thursday. I thought it was very interesting the comments that he made, particularly about, "We don't see signs of sustained inflation. We see a moderating in the economy. That moderating is sharp, it's broad, although we believe it's temporary."

So, the thought process had been that maybe the ECB, once the end of September came and the QE kind of taper, ran down that they might actually tap out from QE. And as a preparation for raising interest rates next year, something that is still priced into the futures market in the Euro Board deposit rate futures, but less so than it had been. And I think the key here of course is inflation. I think inflation is going to be rising throughout the rest of the year. We talked about this earlier in the year, the end of last year in our January year ahead piece and we targeted the May to June period for this to start to really show up in the data. And I think we're going to see that in terms of energy prices.

And then the wild card, which is the Ag markets and food prices, which we see on the rise as well, particularly as it relates to the U.S. grain crops and some of the stuff that we can talk about maybe in a minute. But I think that in that context, thinking that European bond yields are going to break down further from here seems unrealistic unless in fact the ECB is going to re expand QE, something that Mario Draghi floated on Thursday. So I think that really caught the market by surprise. It really hurt the euro, boosted the dollar, but I think to suggest that the German two-year can get back below -60 basis points at a time when German GDP growth is three percent, and German inflation is 1.6 and likely to rise. I mean, not only is it a negative 60 basis point two-year in Germany, think about the real yields you're talking about here. They're so deeply negative.

We saw the same thing in the U.S. really in September when then chair Janet Yellen suggested they wanted to not normalize rates, but go to neutral, which meant to lift the bond market, particularly in the short end, which was wildly overpriced because of QE to the level of inflation. And that's what we've seen in the two-year note. It went from 140 when she made these comments in September of last year to where it is now at 250, which is a new high. So, in the context of the rising ECI, the rising wages in the U.S. ... and let's not forget, and one point I'll make without making this answer too long ... If you look at the U.S. Employment Report from last month, all the talk was about hourly earnings being subdued and not rising. The fact of the matter is a lot of the Fed reports show us, tell us very clearly that firms looking for skilled workers, having difficulty finding skilled workers, are now extending the hours of their current workers. So, if you're not making more per hour, but you're working longer hours, you're still making more money.

So the weekly earnings from the Employment Report were at 3.3. You got import prices of 3.6, and now you got from the ECI private sector wages are around 3. So you see some movement here in the U.S. that boosts the two-year to two and a half, at the same time the German two-year is falling and thus the yield differentials kind of come back into vogue as a driving force in the dollar. But I think that the decline in European bond yields will be short-lived and I think you'll see a reemergence of an upside push, particularly in Germany. And that's probably something that will add to pressure on the dollar later in the year along with a continued deficit widening story.

Mike Gleason: Greg, those of us who question whether or not the Fed can get away with raising rates, look at the months ahead as sort of a moment of truth if "normalizing" interest rates means that treasury yields are headed back to four to five percent. You've got to think that it will just crush the federal budget and the U.S. economy, which is addicted to ultra-low rates as we all know will in our view have to endure some painful withdrawal symptoms. And now on the one hand, the Fed has hiked rates several times seemingly without major repercussions. On the other, volatility is creeping back into the equity markets and the indexes have fallen since their highs in late January. Mortgage rates have moved higher. So we're very curious about how this will play out and wanted to get your thoughts. Is the Fed going to be able to stay the course and double the Fed funds rate over the next 24 months here, Greg? Or are the markets and the economy at large going to rebel and force officials at the Fed to abandon their plans for tightening?

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April 20 2018

moneymetals

Jim Rickards Forecasts New Financial Crisis & Makes Prediction About Gold

Well now, without further delay, let’s get right to this week’s exclusive interview.

Jim rickards

Mike Gleason: It is my great privilege now to be joined by James Rickards. Mr. Rickards is Editor of Strategic Intelligence, a monthly newsletter and Director of the James Rickards Project, an inquiry into the complex dynamics of geopolitics and global capital. He's also the author of several bestselling books including The Death of MoneyCurrency WarsThe New Case for Gold and The Road to Ruin. In addition to his achievements as a writer and author, Jim is also a portfolio manager, lawyer and renowned economic commentator, having been interviewed by CNBC, the BBC, Bloomberg, Fox News and CNN, just to name a few. And we're happy to have him back on the Money Metals Podcast.

Jim, thanks for coming on with us again today. We really appreciate your time as always and how are you?

Jim Rickards: I'm doing great Mike, great to be with you. Thank you.

Mike Gleason: Well Jim, I figure a good place to start here is with one of your most recent books. We want to get your take on the state of the world economy. In your book titled The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis, you make some very interesting comments. Now while the financial media is talking about booming stock markets and accelerating GDP growth, you aren't quite as optimistic. We both know that most of the growth we've seen in recent years has been built with huge amounts of central bank stimulus and the fundamental problems that drove the last financial crisis have hardly been resolved. In fact, you think the next financial catastrophe isn't too far away and many among the elite are getting ready for it. If you can, briefly lay out some of what you've been seeing.

Jim Rickards: Sure Mike, you touched on two different threads. One is, let's call it the short to intermediate term, which is how's the economy doing? What would the forecast be for the year ahead? What do I think about stocks and so forth? That's one part of the analysis, but the other one is a little bigger and a little deeper, which is what about another major financial crisis, a liquidity crisis, global financial panic and what would the response function be to that.

Let me separate. They're related because, I mean the point I always make is that there's a difference between a business cycle recession and a financial panic. They're two different things. They can go together, but they don't have to. For example, October 29, 1987, the Stock Market fell 22% in one day. In today's Dow terms that would be the equivalent of 5,000 Dow points, so we're at 26,000 or whatever, as we speak, a 22% drop would take it down about 5,000 points. You and I both know that if the Dow Jones fell 500 points that would be all anybody would hear about or talk about. Well, imagine 5,000 points. Well, that actually happened in percentage terms in October 1987. So, that's a financial panic, but there was no recession. The economy was fine and we pulled out of that in a couple of days. Actually after the panic, it wasn't such a bad time to buy and stocks rallied back. Then, for example in 1990, you had a normal business cycle recession. Unemployment went up. There were some defaults and all that, but there was no financial panic.

In 2008, you had both. You had a recession that began in 2007 and lasted until 2009 and you had a financial panic that reached a peak in September-October 2008 with Lehman and AIG, so they're separate things. They can run together. Let's separate them and talk about the business cycle. I'm not as optimistic on the economy right now. I know there's a lot of hoopla. We just had the big Trump Tax Bill and the Stock Market's reaching all time highs. I mean, I read the tape. I get all that, but there are a lot headwinds in this economy. There's good evidence that the Fed is over-tightening.

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April 17 2018

moneymetals

Global Silver Scrap Supply Falls To 26-Year Low

Global silver scrap supply fell to its lowest level in 26 years. World silver recycling in 2017 dropped by nearly 50% since its peak in 2011. According to the 2018 World Silver Survey, global silver scrap supply declined to 138 million oz (Moz) compared to 261 Moz in 2011. While the lower silver price is partly responsible for the large drop in silver recycling, there are other market dynamics.

For example, silver recycling from the photography sector has declined since consumption peaked in 1999. The photography industry was using 228 Moz of silver in 1999 compared to the 44 Moz last year. Thus, silver consumption in photography has declined by 80% in nearly two decades… and along with it, a great deal of recycled silver supply.

Furthermore, a lot of silverware was recycled during the period of rising prices (2007-2012). A lot of Millennials who inherited their parent’s (and grandparents) silverware decided it was much easier to pawn it rather than spending a lot of time polishing it for holiday gatherings. Which means, a lot of available stocks of silver scrap have already been recycled.

Global silver scrap supply (1990-2017)

As we can see in the chart above, even though the $17 silver price in 2017 was four times higher than in 1991 ($3.91), global silver scrap supply is less than it was 26 years ago. Moreover, world silver scrap was over 200 Moz a year (2005-2009) when the average annual price was much less than it was last year.



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March 12 2018

moneymetals

Gerald Celente Exclusive: "If rates go up too high, the economy goes down, end of story"

Mike Gleason: It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr. Celente is perhaps the most well-known trends forecaster in the world and it's always great to have him on with us.

Mr. Celente, thanks again for the time today and welcome back.​

Gerald Celente: Oh, it's always great being on. Thank you.

Mike Gleason: Well, Gerald, it's never a dull moment in Washington, D.C., these days. President Trump always keeps it lively. We have the never-ending Russia controversy, of course, the war of words with North Korea, and the intervention in Syria have both been regulars in the headlines over the past year. Now Trump is talking about tariffs and people are worried about a trade war. Volatility is coming back to the stock markets and some investors are getting nervous about rising interest rates. When it comes to Russia interfering in U.S. elections, it seems more or less like a smoke screen. We have very little doubt there is plenty of collusion and a fair bit of it involved Hillary shepherding the Uranium One deal over the finish line.

So, we're finding it hard to predict which of these stories are worth paying attention to and which are likely to fade away. And there's nobody better who can help us evaluate this than you, so I'm excited to talk today. So, which of the current stories have legs, Gerald? Will there be a trade war, a big correction in stocks, another attempt by Democrats to impeach Trump? What?

Gerald Celente: Well, the attempt by the Democrats to impeach Trump have never stopped. And, again, Mike, I've been at this a lot of years, and anybody awake and alive that hasn't tuned out knows that every time we've had an election in this country, whether you like the person or not, they always used to say, "Well, whether you like it or not, this is the new person. Let's rally behind him and try to push the country forward." That never happened with Trump. And I want to make this really clear. I'm not a Trump supporter. I didn't vote in this last election. And (people say), "Oh, you didn't vote? Did you get what you deserve?", to which I say, "Grow up. If you voted for any of these people, then you got what you deserve and I don't deserve either of them. My standards are different."

And I look what's going on. It doesn't make the news, all the things that you just mentioned. Hey, how about what just happened in Italy with Cinque Stelle, the Five Star Movement, becoming the major party, a party that just started in 2009 because the people are disgusted with the establishment. How could you be disgusted with the establishment? You should love the establishment. How could you dare be anti-establishment? That's the stupidity of the language that they use.

They call it, for example, what Trump is doing, protectionist movements. Oh, a protectionist? Oh, I'm a close combat practitioner, have been for over a quarter of a century. I'll protect myself. I'll protect myself if I'm being attacked. But yet if you're being attacked trade-wise, economically, and you go to protect yourself, well, you're a protectionist. So, listen to the language, it's very important as a trend forecaster.

You mentioned about the Russian elections. The bar has sunk so low that people are listening to Samantha Power, the former UN Ambassador. And I'm tired of hearing this baloney, "Oh, if only women were in charge." It's not about men, women, race, creed or color. Good and bad comes in all of them. Let's call it equal. This is a woman, along with Hillary Clinton, Samantha Power and Susan Rice that started the Libyan War, that overthrew a sovereign nation, whether you liked the guy or not, that did nothing to us and created the refugee problem that nobody talks about and the migrant crisis. Because when Qaddafi was in there in Libya, they weren't going into Europe. He made a deal with them and warned them that when he went, the migrants would come.



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