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January 12 2018

moneymetals

World Debt Is Rising Nearly Three Times As Fast As Total Global Wealth

Some nasty dark clouds are forming on the financial horizon as total world debt is increasing nearly three times as fast as total global wealth. But, that’s okay because no one cares about the debt, only the assets matter nowadays. You see, as long as debts are someone else’s problem, we can add as much debt as we like… or so the market believes.

Now, you don’t have to take my word for it that the market only focuses on the assets, this comes straight from the top echelons of the financial world. According to Credit Suisse Global Wealth Report 2017, total global wealth increased to a new record of $280 trillion in 2017. Here is Credit Suisse’s summary of the Global Wealth 2017: The Year In Review:

According to the eighth edition of the Global Wealth Report, in the year to mid-2017, total global wealth rose at a rate of 6.4%, the fastest pace since 2012 and reached USD 280 trillion, a gain of USD 16.7 trillion. This reflected widespread gains in equity markets matched by similar rises in non-financial assets, which moved above the pre-crisis year 2007’s level for the first time this year. Wealth growth also outpaced population growth, so that global mean wealth per adult grew by 4.9% and reached a new record high of USD 56,540 per adult.

Total global wealth 2000-2017, current exchange rates (chart 1) | total global wealth 2000-2017, constant exchange rates (chart 2)

This year’s report focuses in on Millennials and their wealth accumulation prospects. Overall the data point to a “Millennial disadvantage”, comprising among others tighter mortgage rules, growing house prices, increased income inequality and lower income mobility, which holds back wealth accumulation by young workers and savers in many countries. However, bright spots remain, with a recent upsurge in the number of Forbes billionaires below the age of 30 and a more positive picture in China and other emerging markets.

There are a few items in the Credit Suisse’s summary above that I would like to discuss. First, how did the world increase its global wealth at a rate of 6.4% in 2017 when world oil demand only increased 1.6%??

​Continue reading (source) ​

November 21 2017

moneymetals

Will the Tax Reform Debate Impact Precious Metals?

November 20, 2017 -- Precious metals got a boost last week as investors were reminded that stock prices move in two directions -- up and down. The S&P 500 and the Dow both finished the worst two weeks they have seen since August.

The selling certainly wasn’t dramatic (both indexes remain within about 1% of their all time highs), but it does represent the recent negative correlation between stocks and metals. Absent the return of an inflation trade, any sustained rally in metals will likely have to be fueled by investors fleeing the stock markets. We’ll see how the equity indexes fare this week. 

Taxes

Wall Street is focused on the debate over tax reform. Whether Congressional Republicans will muster the majority needed to pass a tax bill remains too close to call. We remain skeptical given the combined animosity of the Republican leadership and Democrats towards the president.

At least metals investors who would like some tax relief may get higher gold and silver prices as a bit of a silver lining. Should tax reform fail, it will likely hurt the stock markets and prompt some flight to safety. Trading figures to be lighter this week given the Thanksgiving holiday, but there is some significant economic data due out. We’ll see reports on existing home sales, durable goods, and the FOMC minutes from the Nov. 1st committee meeting. 

Source

November 13 2017

moneymetals

October 27 2017

moneymetals

October 20 2017

moneymetals

Gold/Silver vs. Bitcoin Comparisons: A No-Brainer... or Brainless?

For most of the year, as Bitcoin soared, crashed, and soared again, cryptocurrency vs. physical gold-silver talking heads engaged each other in heated rhetoric about which of these venues is here to stay.

Some of the biggest names in finance, government, and the newsletter analyst space have made comments that – to be charitable – appear less-than-fully informed. Comments like "Even though bitcoin could rise to $100,000, it's still going to zero!" don't offer much insight. Some other questionable assumptions:

2017 percent price change comparisons: Relating this year's gold and silver's price range to that of bitcoin misses an important point. Yes, bitcoin (BTC) has risen by a much greater percent, but it's also fallen more. I don't recall gold dropping 40% this year, which bitcoin has... on a couple of occasions.

Bitcoins

Please note: Bitcoin has no tangible, physical form.

Trash-talking gold and silver as "antiquated": Bitcoin is now considered legal tender in Japan, but at this time, its primary function is for use in the purchase and sale of the 900+ "alt coins" currently available.

Most of these exchange entries in the crypto-space are not really "currencies" at all and will never trade as such.

Rather they are "coins" or "tokens" digitally created and circulated to raise seed money, via initial coin offerings (ICOs) in order to solve some business application in a blockchain-connected manner. Many have no trading volume – possibly because the market is skeptical of their business plan – and have become more or less "dead" coins.

At present, a relative few have an actively trading market. Investors have dropped literally millions of dollars into scores, if not hundreds of entrants which have appeared on the scene like dragon's teeth, in many cases only to see volume dry up soon thereafter.

At present, digital apparitions can be created and marketed by just about anyone. The following example demonstrates how easy it is (for now), and how gullible some people really are...

Article Source


October 10 2017

moneymetals

September 19 2017

moneymetals

September 13 2017

moneymetals

The U.S. Government Massive ONE-DAY Debt Increase Impact On Interest Expense & Silver ETF

The U.S. Government’s massive one-day debt increase had a profound impact on the amount of money it will have to fork over just to service its interest payment. On Friday, Sept 9th, the U.S. Treasury increased the total debt by a stunning $318 billion. Thus, the total U.S. Government debt increased from $19.84 trillion on Thursday to $20.16 trillion on Friday.

We must remember when the U.S Treasury adds more debt to its balance sheet; the government is now obligated to pay additional funds to service the interest on that debt. So, for each increase in U.S. Government debt, comes with it, an increase in its debt service payment.

However, the U.S. Government has been able to control the rise in its annual interest payments by pushing the interest rate lower. For example, the average interest rate on U.S. Treasury debt in 2000 was 6.4% versus 2.2% currently. If we look at the chart below, we can see how the interest rate has declined as U.S. Government debt increased:

U.S. total debt vs average interest percentage rate

The RED DOLLAR bars represent total U.S. Government debt in billions of Dollars, while the WHITE LINEshows the annual average debt service interest rate. We can plainly see that total U.S. debt has nearly quadrupled from $5.6 trillion in 2000 to $20.1 trillion in 2017.

NOTE: I arrived at the average interest rate percentage figures by dividing the annual interest payments by the total outstanding debt.

This next chart from the Treasurydirect.gov website lists the annual U.S. debt service interest payments:

Available historical data fiscal year end

(interest expense on debt outstanding, Treasurydirect.gov)

By taking the interest payment of $362 billion in 2000 and dividing it by the total U.S. Government debt of $5,674 billion ($5.67 trillion), it equaled 6.4%. So, the U.S. Treasury paid an average 6.4% interest payment on its outstanding debt that year.

What is interesting about the figures in the table above is that the U.S. Treasury paid out a larger interest payment in 2008 of $451 billion versus $432 billion in 2016, even though the debt was much higher in 2016. The reason the interest payment was higher in 2008 than in 2016 had to do with a 4.5% interest rate on $10 trillion of debt compared to a 2.2% interest rate on $19.6 trillion in debt. By cutting the interest rate in half (4.5% down to 2.2%), the U.S. Treasury’s interest expense remained flat or slightly declined as the debt nearly doubled.

Continue reading... 
(ARTICLE SOURCE: https://www.moneymetals.com/news/2017/09/13/govt-debt-increase-impact-001157)

September 12 2017

moneymetals

Trump Suggests Eliminating the Debt Ceiling – Dollar Falls

Those who paid any attention to the financial press last week saw the following narrative; President Donald Trump betrayed Republicans by cutting a deal with Democrats Nancy Pelosi and Charles Schumer. They agreed to punt on the borrowing cap until December and spend $15 billion for hurricane relief.

Americans are supposed to conclude that Trump is flip-flopping, and that Republicans aren’t responsible. Dig just a little, and you’ll find only one of those things is true.

Debt ceiling

Trump is flip-flopping, no question about that. The president campaigned on promises to honor the borrowing limit. This tweet from 2013 if what candidate Trump had to say on the matter: “I cannot believe the Republicans are extending the debt ceiling — I am a Republican & I am embarrassed!”

But any implication that Republican leaders in Congress actually oppose more borrowing is patently false. Republicans in Congress overwhelmingly supported the deal. It was passed in the House with a vote of 316 to 90. The Senate voted 80 to 17.

Some who voted in opposition likely only did so for the sake of appearances. Others thought the president and Democrats did not go far enough. GOP leaders Paul Ryan and Mitch McConnell wanted a deal to suspend the borrowing cap for much longer than the 3 months they got.

Make no mistake – lots of Republicans share the commitment to unlimited borrowing with the President and Democrats.

At least the currency markets seem to have gotten it right. Last week’s decline in the dollar may be a recognition the debt ceiling – the final pretense of borrowing restraint – will soon be going away. The sooner investors at large arrive at this conclusion, the better it will likely be for owners of hard assets.

Article Source: https://www.moneymetals.com/news/2017/09/11/trump-eliminate-debt-ceiling-001154

September 06 2017

moneymetals

September 05 2017

moneymetals

August 22 2017

moneymetals

TOTAL WORLD GOLD & SILVER PRODUCTION: Fact vs Conspiracy

Inline image 1

Unfortunately for precious metals investors, there continues to be a great deal of misinformation about how much gold there is in the world. The biggest culprit that confuses precious metals investors is what I call, LOUSY CONSPIRACIES. Those who promote these unsound conspiracies aren’t able to differentiate between FACTS and FICTION.

This will be a short post, but it is important as it will lay some ground work for articles to come out over the next several weeks in comparing the new Bitcoin-Crypto currency market to gold and silver.

While conspiracies do indeed take place, they are based upon sound reasoning and evidence that either proves a conspiracy has occurred, or proves the official story is bogus. On the other hand, lousy conspiracies are easy to dismiss when facts and sound evidence are brought forward. Unfortunately, even when the facts or the evidence is presented step by step, those who either promote or believe these lousy conspiracies… continue to do so.

This has to be one of the most frustrating areas of my research, writing and analysis. Why? Because, I receive emails at least once a week bringing up one of my favorite LOUSY CONSPIRACIES.

One of the more insane conspiracies in the precious metals community is the notion that the world has 1-2 million tons of gold hidden in secret vaults. Some of these vaults are the infamous Yamashita’s Gold Treasure, Nazi Gold Vault, Bank of Hawaii Massive Gold Holding and etc.

You see, conspiracies, especially LOUSY CONSPIRACIES, are a great way to make a buck selling a newsletter or book. Because people don’t take the time to do the research and fact check, it’s much easier and a great deal more fun to believe in the hype of a conspiracy. This is quite a shame because lousy conspiracies give the few sound conspiracies a bad reputation.

Even though I wrote about this back in April, CONSPIRACY vs FACT: How Much Gold Is In The World??, it seems necessary to discuss this once again as an introduction to why gold and silver will still be better quality stores of wealth versus crypto currencies over the medium to longer term. This goes against some of the recent analysis put out in the Alternative Community suggesting that gold will no longer have value in the future due to crypto currencies taking over the role as a new digital monetary system.

Anyhow… the production of silver and gold are extracted out of the ground at a certain ratio. Recently, it is approximately 9 to 1, silver to gold. Let’s take a look at the following two charts:

World gold production 1493-2016

World silver production 1493-2016

As we can see in these two charts, most of world gold and silver production has been extracted since 1900. For gold, the world produced 91% of all gold since 1900, and 81% of all global silver production.According to the best sources (shown on the bottom of the chart), there have been approximately 173,000 metric tons (5.5 billion oz) of gold produced since 1493 and 48.5 billion oz of silver. This turns out to be a 9 to 1 ratio, which is the same as the ratio of silver to gold in the ground.

Continue reading: Article Source

August 18 2017

moneymetals

August 07 2017

moneymetals

Sen. Hatch: Those Opposing More Debt ‘Don’t Deserve to Be Here’

Republican leaders in Congress, with the urging of Treasury Secretary Steve Mnuchin, are anxious to raise the federal borrowing limit from $19.8 trillion – no strings attached.

The only hitch is those pesky conservative voters who were promised restraint by party leaders. GOP establishment hopes to quietly pass a “clean” bill to raise the debt ceiling – a direct betrayal of that voter base – don't currently enjoy enough support from other Republican members who still consider themselves accountable. So a deal with the Democrats beckons.

Republicans technically have the power to finally honor the limit on borrowing by reducing spending. After all, Republicans control both Congress and the White House.

Sen. orrin hatch (r-ut)

Sen. Orrin Hatch (R-UT) says any
politician who opposes more debt
“doesn’t deserve to be here.”

The last thing most Republican voters want is for McConnell and Ryan to start cutting deals with Nancy Pelosi and Chuck Schumer for a debt ceiling hike and MORE spending. But that may be exactly how this batch of sausage gets made. Watch for a coalition of big government Republicans and Democrats to leave future generations holding the bag – yet again.

GOP Senator Orrin Hatch is scornful of anyone in his party trying to impose spending restraint. He had this to say: “Some conservatives think they can get some programs cut. Well, that’s not gonna happen… We have to pay our bills and anybody who doesn’t want to do that doesn’t deserve to be here.

Hatch and his friends in leadership – on both sides of the aisle – share a bizarre philosophy when it comes fiscal responsibility. They insist that the best way to meet obligations is to embrace perpetual deficit spending and simply borrow without limit to cover it.

As far as they’re concerned, any elected officials with an opposing view don’t even belong in Washington DC.

Continue reading..

moneymetals

Insider's Take on the Political Situation from former Ron Paul Aide

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

Paul-Martin foss

Mike Gleason:It is my privilege now to welcome in Paul-Martin Foss, founder and president of The Carl Menger Center for the Study of Money and Banking, an organization whose mission is to educate the American people on the importance of sound monetary policy. Prior to starting The Carl Menger Center, Paul-Martin worked on Capitol Hill for seven years, including a six year stint with none other than Congressman Ron Paul. As Paul's legislative assistant, he worked closely with Dr. Paul on his Audit the Fed and End the Fed bills.

Paul-Martin has a Master's degree from both the London School of Economics and Georgetown University, and has dedicated much of his professional life to the cause of sound money and the values of Austrian economics. So it's a real pleasure to have him on with us today. Paul-Martin, thanks so much for joining us and welcome.

Paul-Martin Foss: Well, thank you very much for having me on.

Mike Gleason: Well, I guess we'll start at the beginning here, and I'll ask you to explain why you've made it a goal and a mission to spread the ideals of sound money and sound banking. So first off, what does sound money and sound banking mean, and why should the average American citizen even concern themselves with these causes in the first place?

Paul-Martin Foss: Sound money basically is money that the government cannot debase and devalue. It's money that allows civilization and commerce to flourish. It protects savers. It protects consumers. It allows individuals to save and invest and plan for the future. What we're seeing is for the past century since the Federal Reserve was created is basically unsound money. It's money that is constantly being devalued. It favors debtors, especially the biggest debtor of all, the Federal government. It's silently taking money out of the pockets of savers and the average individual and putting that money in the pockets of Wall Street. The average American person doesn't really understand or see... who was it, I think Keynes quotes Lenin as saying that “the surest way to debase a civilization is to debase its currency.” This is basically what's happening in our country today, so I'm trying to make it an important issue and make people realize just how important sound money and sound banking is in the United States.

Mike Gleason: Furthering the point here, you wrote a great article about how the government essentially funds itself through three methods, taxation, borrowing, and inflation, and you explained how sound money is essential to keeping spending in check. Talk more about that, and then also explain more about the role that gold and silver can serve to rein in government spending.

Paul-Martin Foss: Yeah, it's like you said, you have taxation, you have borrowing, and you have inflation. Those are the three methods that the government can use to fund itself. Taxation is kind of self-limiting because once you get the tax rates high enough, people are going to stop paying taxes and the government's not going to take in as much money. Borrowing, eventually people… if you are spendthrift and not paying back your debts, they're going to stop lending you money or they're going to lend you money at higher interest rates, so there's kind of a self-limiting factor there too.

So inflation ends up being their preferred method of funding themselves, again because it's very subtle. The Fed says 2% inflation rate every year, that's their definition of stable prices. Well, that's devaluing government debt by 2% every year. Over the course of a decade, you devalue your debt by 25%, and you can pay back your debts in devalued dollars, so it's a win-win for the government all around, basically spending a lot more money than it actually has.

Gold and silver have always been great checks against the government because there's just a limited supply of it, and the government doesn't have a monopoly on the possession of gold and silver, the use of gold and silver. It can't print gold and silver. It's an item. If it wants to issue bank notes and spend money that way, it's limited by the amount of gold and silver that is physically in its possession. So it's always been a great check on government spending, and that's why governments around the world for the past 100 years have done everything they can to demonetize gold and silver, keep people from being able to use because they don't want gold and silver to be money because it limits their power.

August 04 2017

moneymetals

Get Ready for an Historic Upside Gold and Silver Run

The Bigger the Base, the Greater the Upside Case. This saying among technical analysts/chartists helps define where we are today in the precious metals – and where we'll soon be headed.

July 24 2017

moneymetals
moneymetals

David Morgan: Gold and Silver at Breakout Point from 6-Year Downtrend

And now, back by popular demand, here’s our recent interview with a long-time friend of Money Metals Exchange and precious metals investors in general…

David morgan

Mike Gleason: It is my privilege now to welcome in our good friend David Morgan of The Morgan Report. David, it's always a real pleasure to have you on with us and I'm especially excited to talk with you about some of the topics we've got on tap today. How are you?

David Morgan: I'm doing well Mike, thank you very much.

Mike Gleason: Well, as we begin here David, I want to talk to you about the danger of complacency because I think it's a very appropriate topic for the times we're in right now. To you and me and to many others in our space with a similar world view, we see a whole slew of reasons to own precious metals. We have threats of war in many places throughout the globe. We have a president here in the U.S. who the establishment hates and is hoping to oust if they get the chance. We have nation central banks printing new fiat currency at unprecedented levels all throughout the world.

An entire continent over there in Europe that appears to be potentially at risk of seeing their political and currency union falling apart, terror threats all over the place, the refugee crisis, the list goes on and on. But all the while we have this stock market continuing to make all-time highs with most people seeming to believe that everything is hunky dory while completely ignoring all of those geopolitical and monetary headwinds, or for those who seem to grasp all of that, all that's going on, maybe starting to believe that it doesn't matter. Because, after all, the feds and the central planners are going to be able to manage this thing forever.

So, talk about complacency here David, why aren't we seeing more flock to safe havens, at least not here in the Western world, and discuss the dangers that exist if we let ourselves fall into the complacency or the “nothing is ever going to change” type of mindset.

July 19 2017

moneymetals

National Debt Too High, Silver Price Too Low

Silver currently sells around $16, which would be sensible if the U.S. national debt was much less than its current $20 trillion.

Fine silver bar

Given the massive national debt and 100 years of experience, silver prices could easily be double or triple their current prices, and far higher in a panic.

WHY?

Examine over a century of official national debt data graphed on a log scale. Official debt in 1913 was $3 billion. Since then it has risen 8% to 9% every year to reach $20 trillion or $20,000 billion. Debt will continue rising as long as politicians spend and bankers lend.

Proof: Name the Senators, Representatives, Presidents, military contractors, pharmaceutical companies, and Medicare recipients who wish to see the government reduce expenses.

moneymetals

GOLD & SILVER MARKET: Four Interesting Developments

There are four interesting developments taking place in the gold and silver market that precious metals investors should be aware of. While Americans continue to place all the BETS in the CASINO called Wall Street, via stocks, bonds and real estate, the EAST has been acquiring record amounts of gold and silver. Furthermore, something interesting seems to have changed recently in the Silver Eagle sales market.

FIRST DEVELOPMENT: Let’s start off with showing the stunning amount of silver India imported in May. According to Smaulgld.com, India imported nearly 2,000% more silver in May 2017 vs May 2016:

Indian silver imports may 2016 - may 2017

Matter-a-fact, India imported nearly the same amount of silver in May, than they received from January-April. Also, we can see that May’s 1,473 metric tons of silver imports is 2-4 times more than any of the prior months. Something has inspired the Indians to import that much silver this past May.

SECOND DEVELOPMENT: India also imported a record amount of gold in May:

Monthly indian gold imports july 2014 - may 2017

According to Smaulgld’s article, INDIAN GOLD IMPORTS ON RECORD PACE IN 2017:

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