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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.

​Read/Listen to the full podcast (here) ​

March 19 2018

moneymetals

New Sound Money Public Policy Breakthroughs Occur in the States

Well now, without further delay, let’s get to this week’s featured interview between Money Metals president Stefan Gleason and Pete Fetig during a recent summit on all things precious metals.

Stefan gleason

Pete Fetig: Stefan, I would like to start with what are precious metals and why should someone even own something like that?

Stefan Gleason: Thanks Pete. That is obviously the most fundamental question to this entire conversation. Is what are precious metals and why should you care? And this is something that has been driven out of the public consciousness to a great extent over the last 80 or 90 years and especially in the last 40 years. And that is that the role the precious metals play in our society and in our monetary system and as an investment. First and foremost, I would say that people should understand gold and silver is money. It is true money. It is been chosen throughout time as a medium of exchange, a store of value, and has been used in trade ever since several thousand years B.C. So gold and silver is first and foremost money. It has been chosen as money for a lot of reasons and those reasons are still in existence today.

First of all, it is tangible. It’s an actual asset. It cannot be created from nothing. Like paper money today is created from nothing or even electronic equivalent of paper money. It is private. It is something that you can exchange between people and it is not tracked or traced. Like so many things are in our electronic monetary system today. It is highly liquid. It is accepted by all people or governments at least. Certainly, private individuals understand that it has value. Always going to have value. It has always been accepted. Ultimately, even central bankers view it as that. Even though, they have waged a war against gold and silver and gold and silver ownership, particularly in the last several decades, they hold it as a reserve asset. They understand that it is the ultimate form of payment. It’s a form of payment that has no counterparty risk. It is not also someone else's liability at the same time, like the dollar is. And so central banks, while they do not talk about it, are holding gold and silver as reserve assets because they know that it has timeless value.

More immediately gold and silver are precious metals that are really a form of financial insurance. It’s a non-correlating asset. It does not move necessarily with the stock market, the bond market, the real estate market. It’s something that you should have as a part of your asset allocation because when everything else falls apart, gold and silver typically does very well. Just like an insurance policy that you do not necessarily want to have to cash in. You still have it. You have an insurance policy in your house. You probably have one on your car. You should have an insurance policy against your financial asset. Gold and silver is that insurance policy. It is also of an excellent hedge against inflation. It is really the ultimate hedge against inflation.

That is today, in the last 40 years in particular, since the United States and really the whole world, went off the gold standard. You’ve had an explosion in debt. You’ve had an explosion in the creation of fiat money. We now have really a competition going around the world to devalue fiat money. It’s a race to the bottom. That is done with the creation of new debt and the printing of new money to sort of prop up the economy, prop up the bond market, the stock market. And as result of that, as a result of more paper money and electronic money being created, it has caused data reduction in the purchasing power of these other currencies. Gold and silver have maintained and even increased their purchasing power, over time.

Since the Federal Reserve System in the United States was created a little over 100 years ago, the US dollar has lost over 97% of its purchasing power. In the 100 years prior to that, except for a short period of time during the Civil War when they went off the gold standard, the purchasing power of the dollar was relatively the same, but then declined dramatically since the Federal Reserve system was created. So you have this massive devaluation of currencies happening all across the globe, and gold and silver are tangible assets that are a hedge against that, that benefit from really the devaluation as they rise in price. We have seen that, gold and silver, have reached all-time highs in recent years. They got a little overheated and pulled back in dollar terms since 2011, but at the end of the day you want to own a certain amount of gold and silver as a hedge against inflation and financial turmoil.

Read/Listen to the full podcast (here) ​

March 12 2018

moneymetals

Trump Says the U.S. Will Win Any Trade War; Our Debt Load Says Otherwise

Donald Trump fired off some major new shots in the global trade wars. With the exception of imports from Canada and Mexico, steel entering the U.S. will be subject to 25% tariff and aluminum will be taxed at 10%.

The president’s trade policy has been applauded by people seeking to protect domestic industry and criticized by free marketeers. There is no shortage of disagreement over the policy, but some of the outcomes seem easier to predict.

Rising prices

Higher price inflation is one probability.

Domestic manufacturers who use steel and aluminum are going to pay more for those metals and will need to raise prices. A wide gamut of goods ranging from airplanes and automobiles to steel building materials will soon cost more.

Unfortunately, the higher costs will put domestic manufacturers who must buy steel and aluminum at a disadvantage.

While they pay more for imports from Europe or Asia, the cars and appliances manufactured elsewhere and shipped into the U.S. aren’t affected.

Goldman Sachs estimates the steel tariffs will cost Ford and General Motors each $1 billion in profits. Imported models suddenly get a major cost advantage in the U.S. marketplace.

There is also the possibility of higher inflation driven directly by the foreign exchange markets.

Disgruntled trading partners may choose currency warfare as their response to tariffs. This would involve liquidating dollars they hold as reserves. In the case of China, Japan, and the EU, those stockpiles are enormous.

​Continue to the full article (source) ​

February 15 2018

moneymetals

U.S. Public Debt Surges By $175 Billion In One Day

After the U.S. Government passed the new budget and debt increase, with the President’s signature and blessing, happy days are here again. Or are they? As long as the U.S. Government can add debt, then the Global Financial and Economic Ponzi Scheme can continue a bit longer. However, the days of adding one Dollar of debt to increase the GDP by two-three Dollars are gone forever. Now, we are adding three-four Dollars of debt to create an additional Dollar in GDP. This monetary hocus-pocus isn’t sustainable.

Well, it didn’t take long for the U.S. Government to increase the total debt once the debt ceiling limit was lifted. As we can see in the table below from the treasurydirect.gov site, the U.S. public debt increased by a whopping $175 billion in just one day:


U.S. debt increased 175 billion feb 2018

I gather it’s true that Americans like to do everything… BIG. In the highlighted yellow part of the table, it shows that the total U.S. public debt outstanding increased from $20.49 trillion on Feb 8th to $20.69 trillion on Feb 9th. Again, that was a cool $175 billion increase in one day. Not bad. If the U.S. Government took that $175 billion and purchased the average median home price of roughly $250,000, they could have purchased nearly three-quarter of a million homes. Yes, in just one day. The actual figure would be 700,000 homes.


Continue reading... (source)

February 05 2018

moneymetals

January 15 2018

moneymetals

The 2018 Stock Market Bubble vs. Gold & Silver

The U.S. Stock Market is reaching its biggest bubble in history. When the price of the Dow Jones Index only moves in one direction… UP, it is setting up for one heck of a crash. While market corrections aren’t fun for investors’ portfolios, they are NECESSARY. However, it seems that corrections are no longer allowed to take place because if they did, then the tremendous leverage in the market might turn a normal correction into panic selling and a meltdown on the exchanges.

So, we continue to see the Dow Jones Index hit new record highs, as it moved up 765 points since the beginning of the year. Now, if we go back to 1981 when the Dow was trading about 800 points, it took five years to double itself by another 800 points. However, the Dow Jones Index just added 765 points in less than two weeks. It doesn’t matter if the (1) point increase in the Dow Jones today is insignificant compared to a (1) point increase in 1981, investors feel rich when the numbers are increasing in a BIG WAY.

This is the same phenomenon taking place in the Bitcoin-Crypto Market. Crypto investors who are used to 10-20 baggers (10-20 times increase) no longer have the patience to invest in a real company that might grow on a 10-25% basis annually. Why the hell put money in a real business that employees a lot of people when you can turn $1,000 into $50 million in a few weeks?

Unfortunately, the Bitcoin-Crypto Market has destroyed the new Millennials ability even to consider making old fashion sound investments in real capital-intensive companies. Today, the Entrepreneurs rather make money trading Cryptos on their I-Phone, sporting a few thumbs-up Selfies, compared to the previous generation of business people doing deals out of their briefcases.

Continue reading (source)

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) ​

December 22 2017

moneymetals

David Smith: Cryptos Bringing Broad Attention to All Dollar Alternatives

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, Merry Christmas, and thanks for joining us again. How are you?

David Smith: Very good Mike, and thank you and the very same to you and yours.

Mike Gleason: Well, as we start out here, David, let's talk first about the setup as we finish up 2017 and move into the new year. There are a lot of similarities to last year, maybe the year before. We've had the Fed just announce a rate hike. The move was well telegraphed and all the selling in the metals happened prior to last week's FOMC meeting. Open interest in the futures got pretty extended about a month ago, and as often happens in that scenario, the speculative long buyers were taken out to the wood shed and punished as the bullion banks cashed in on their shorts. Now we're seeing a bit of a rally in the metals, so the situation in these regards is very similar to a year ago. What are you expecting from the metals markets in the weeks and months ahead? Are you looking for a rally to match last year's?

David Smith: I really think that we could be looking at a very similar set up to 2016 where the metals actually bottomed in December, and the mining stocks tried to put a lower low in in mid-January. And I'll never forget it, January 19th, and on an inter-day basis, they turned around, and then it was up and away for the metals and the miners for the next six months.

Then between then and now they gave back about 50% of it, which is what you'd expect on a retracement, and nobody can predict the future exactly, but I really feel pretty strongly that we're going to see a very strong, right out of the box, in January, on the metals and miners, and it may even turn before the new year, but there's so many technical indicators themselves, that when you add them all up, they become something larger, and so I think if a person is waiting to purchase their metal, they shouldn't be waiting too much longer if they had the same view I do.

And not only that, as you know, when the demand starts ramping up pretty quickly, the premiums go up too, so you would have a double whammy against you, buying at a higher price and paying a higher premium if you wait until a lot of other people kind of get the same idea.

Mike Gleason: Yeah, certainly a buyers’ market right now, both in terms of low spot prices, and also the premiums, as you mentioned. And the last couple years, we have had pretty strong, right of the gate, moves there in the metals and the miners, and maybe 2018 is going to have the same thing.

Now in your most recent article that we published this week in MoneyMetals.com, you make the case for physical metals and cryptocurrencies to coexist. Now we think that is a vitally important idea right now as people are working through questions about what the advent of Bitcoin and other cryptocurrencies will mean for gold and silver. It would be pretty easy for people to look at price charts and leap to the conclusion that metals are quickly becoming irrelevant. The reality is that the times we live in are desperately calling for honest money and that both cryptocurrency and metals both have important roles to play. They have very different strengths and weaknesses, however, so talk for a minute, David, about how these two asset classes are likely to coexist.

Read/Listen to the entire podcast here: (source)

December 18 2017

moneymetals

Money Metals Exchange Is Also Your Crypto/Metals HQ

Inline image 1

Money Metals Exchange began accepting Bitcoin payments for gold and silver bullion nearly 3 years ago, putting us among the very first in our industry to do so.

Today, we are announcing expanded services – both when buying and selling precious metals – using several crypto-currencies.

We believe honest money is core to liberating people and protecting their savings. History is clear as to how the game of unrestrained government borrowing, printing, and spending will end. The holders of the world’s fiat currencies will wind up holding the bag.

Crypto-Currencies

There can be no doubt that tangible, off-the-grid, gold and silver – which feature zero counterparty risk – will have a key role to play in the future, just as they have in the past. It may well be that crypto-currencies will also have a role to play.

Crypto-currencies provide a method of sending payments anywhere in the world, without permission and with little cost. It is possible to do so securely and privately, without relying upon bankers as middlemen.

If Bitcoin, or one or more of the alternatives, can solve scaling problems, it could be a revolution in which individuals and liberty are the victors.

Our clients have long been able to make payment for metals using Bitcoin at MoneyMetals.com, as noted above. But that is just the start. Very soon we will be able to accept online payments in Bitcoin Cash and other major crypto-currencies.

But we can already do a much larger variety of crypto-currency transactions with clients who call us rather than order online.


Continue reading.. (source

November 30 2017

moneymetals

How to Choose a Firm to Set Up Your Precious Metals IRA

Self directed IRAs are increasingly popular as investors discover they can use them to escape the ring fence represented by traditional IRA accounts.

Banks and brokerages successfully cultivated the idea that IRAs should contain only conventional securities – stocks, bonds, and mutual funds. The truth is that they get paid handsomely for selling those paper assets, so that is all they put on the menu.

But word is getting out that it is perfectly legal and easy to own tangible assets, including real estate and precious metals, in an IRA. Investors just have to leave Wall Street and find a custodian which specializes in self-directed IRA plans. Today, there are a number of firms offering this sort of plan, so it is worth covering how an investor might go about choosing one.

Secure Your Retirement with a Precious Metals IRA | Learn More  />

You’ll want to start by evaluating the basics. Choose a firm with a reputation for providing great service at competitive fees. You might give extra points for a firm which is well established in the industry. There has been a fair bit of consolidation and changes in the space recently.

We would not recommend custodians charging more than $150 in annual fees or those charging more than $50 for each transaction. There are some very good firms with fees significantly below those levels.

The capability to enroll, view and manage transactions online should be a big consideration if you prefer the convenience of managing affairs electronically. Those people who prefer to deal in person should inquire by phone to see if you can reach a service rep easily and get good care.

Continue to the full article (source

November 28 2017

moneymetals

Gold's Global Supply Artery: Heading for Cardiac Arrest

Inline image 1

An oceanic-scale demand push from "all parts Far East" is building, as the desire to own gold and silver promises to place an increasingly solid foundation for years to come.

China, India, and Southeast Asia have historically accumulated precious metal as a savings vehicle, a hedge against political uncertainty (e.g. India's surprise call-in last year of 80% of the country's paper currency), and as an expression of affection. China's newly-emerging affluent middle class alone is set to become larger than the population of the U.S. Frank Holmes collectively refers to these elements as "love and fear trades".

China's One Belt-One Road (OBOR) Initiative – the world's largest-ever construction project – is designed to link 60% of the world's population in a cooperative financial and economic matrix. Taken together, the continued migration of gold supply from West to East is baked into the cake.

For a deeper understanding of how and why China is leading the charge – and going about capturing an outsized portion of the global gold supply – see my essay from last summer, titled China's Get the Gold Plan: Part II.

Even as the West ships much of its remaining gold eastward (largely via Swiss refineries who "repurpose" it into .9999 fine gold), countries like Germany and Turkey have stepped up to the plate, becoming noteworthy demand drivers in their own right.

Fund managers are finally realizing that gold deserves to be a permanent portfolio asset holding category. In The Morgan Report and in Riches in Resources, David Morgan has written extensively about this for both individual investors and institutional clients. Just one more "silent lever" by which a long-term, rock-solid foundation is being built under gold's demand... and price.

Continue to the full article (source)

November 22 2017

moneymetals

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

The Dangers of Zero

Inline image 1

Zero is an important number in the psychology driving demand for bullion. There are periods when investors find the argument that gold or silver prices “will never go to zero” compelling.

The 2008 financial crisis and the years immediately following it are the most recent example. The fear of conventional securities and even the fiat dollar becoming worthless was palpable for many in the metals markets. Bullion demand hit record levels.

Left behind

Investors have chased bull markets
for fear of being left behind.

While demand for gold ETFs and futures contracts has been strong in 2016 and 2017, some investors in the physical market for coins, bars, and rounds seem to have overlooked the modest gains of the past two years and are anxious instead to participate in bull markets elsewhere. If they are worried about anything, it is the possibility of missing out.

Gold and silver’s appeal as a safe haven is in temporary eclipse.

The metals markets are awaiting the moment when investors lose their conviction about ever higher stock prices and once again grapple with the idea that prices do fall.

Indeed, the value of some securities can, and does, fall all the way to zero. Companies miss expectations or fail outright. Bond issuers occasionally default and fiat currencies eventually die. Investors discount risk in the euphoria of a bull market.

Continue reading: (source)

November 06 2017

moneymetals

November 03 2017

moneymetals

Bitcoin or Gold: Which One's a Bubble and How Much Energy Do They Really Consume

Inline image 1

If you are investing in either Bitcoin or Gold, it’s important to understand which asset is behaving more like a bubble than the other. While it’s impossible to understand how the market will value these two very different assets in the future, we can provide some logical analysis that might remove some of the mystery associated with the market price of Bitcoin vs Gold.

I’ve read some analysis on Bitcoin profitability and energy consumption that seemed unreliable, so I thought I would put my two cents in on the subject.

For example, many sites are using the Digiconomist’s work on Bitcoin energy consumption. However, I believe this analysis has overstated Bitcoin’s energy consumption by a large degree. According to the Digiconomist, Bitcoin’s annual electric use is approximately 24 TerraWatts per year (TWh/yr):

Digiconomist bitcoin energy consumption

In a recent article that was forwarded to me by one of my readers, How Many Barrels Of Oil Are Needed To Mine One Bitcoin, the author used the information in the chart above to calculate the energy cost to produce each Bitcoin. He stated that the average energy cost for each Bitcoin equals 20 barrels of oil equivalent. Unfortunately, that data is grossly overstated.

Read the full article: (source)

October 31 2017

moneymetals

BREAKING: China – World’s Largest Gold Producer Mine Supply Plummets 10%

Inline image 1

The world’s top gold producer saw its mine supply plummet by 10% in the first half of 2017. According to the GFMS World Gold Survey newest update, China’s gold production in 1H 2017 fell the most in over a decade. The fall in Chinese gold production is quite significant as the country will have to increase its imports to make up the shortfall in its mine supply.

The data in the GFMS 2017 Q3 Gold Survey Update & Outlook reported that Chinese gold mine supply declined 23 metric tons to 207 metric tons in the 1H 2017 versus the 230 metric tons during the same period last year:

China gold mine production (1h 2016 vs 1h 2017)

The report stated the reason for the decline in Chinese gold production was due to the government’s increased efforts to curb pollution as well as heightened awareness of environmental protection. Furthermore, GFMS analysts forecast that Chinese gold production will continue to deteriorate for the remainder of the year as production is scaled down.

Read full article: (source)

October 30 2017

moneymetals

October 25 2017

moneymetals

Threats to Digital Wealth Point Up Need for Tangible Backup

Recent high-profile cyber security breaches at Equifax and other financial institutions highlight the perils of an all-digital economy. When wealth can be evaporated or expropriated at the stroke of a key, how secure can your finances really be?

Obviously, there is a big difference between wealth you can tangibly hold and wealth that exists only in electronic form.

One advantage of paper cash is that it can’t be hacked or stolen digitally. Paper money isn’t by any means hard money like gold and silver, but it does at least provide some of the privacy and convenience features that come with tangible assets. That’s why bankers and bureaucrats want to ultimately ban the use of paper Federal Reserve Notes and force all cash transactions to go online.

Hard money assets

A recent story in the Wall Street Journal suggested, “reducing the supply of cash in the U.S. could help lower crime and make the Fed’s job easier.” Limiting our access to cash... to help monetary central planners do their job – somehow it didn’t occur to the Founders to enshrine that principle into the Constitution!

Kenneth Rogoff, former chief economist at the International Monetary Fund, says eliminating $50 and $100 bills is necessary to reduce tax evasion and black-market transactions.

According to Rogoff, “Another advantage of eliminating large bills would be the effect on monetary policy. The Federal Reserve should be able to implement negative nominal interest rates vastly more effectively in the absence of large bills, which could prove quite important as a stimulative tool in the next financial crisis.”

A negative interest rate policy is effectively a tax on holding cash in a bank. But the policy doesn’t work so well when people can hold paper cash and thus escape the negative rate exaction.

The war on cash is proceeding in small steps, with lots of nudging from corporate America. Visa has launched a “Cashless Challenge” to incentivize small businesses to stop accepting paper currency. “Visa is helping lead the cashless movement by working to reshape how people pay and get paid,” the credit card giant boasts.

Continue reading: (source)

October 24 2017

moneymetals

Trump May Reappoint Yellen as Fed Chair after All

Candidate Donald Trump was none too kind to current Federal Reserve Chair Janet Yellen during his 2016 campaign. However, the President’s tone with regards to Yellen and Fed policy has been softening since his election.

Trump met one on one with Yellen and other top contenders last week and now appears quite open to the idea of reappointing her to another four-year term.

Janet yellen

Trump may reappoint UC Berkeley
Janet Yellen

Trump told CNBC in September of last year that Yellen should be “ashamed” for acting partisan. He accused the Fed of maintaining extraordinarily low interest rates at the request of former President Barack Obama and Democrats who wanted stimulus and credit for economic growth. Given an opportunity, he suggested he would find someone new as Fed Chair.

Now that has been thrown into question. Following his recent interviews with the candidates, Trump told Fox Business, “Most people are saying it’s down to two: Mr. (John) Taylor, Mr. (Jerome) Powell. I also met with Janet Yellen, who I like a lot. I really like her a lot. So, I have three people that I’m looking at, and there are a couple of others.”

Trump now favors Yellen’s low interest rate policy. He said in July of Yellen, “I’d like to see rates stay low. She’s historically been a low-interest-rate person."

Continue to the full article (source

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