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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

Which Precious Metals Are Likely To Be Better Investments During The Next Market Crash?

The question on the minds of many investors, is which of the precious metals will be better investments during the next market crash? I should know because I receive this question in my email box quite often. So, I decided to test the price action of several metals and how each traded during a large market correction.

This article will focus on the top four precious metals, gold, silver, platinum, and palladium. Even though Rhodium and other metals are considered precious, the ones listed above take the lion’s share of the investment market. Furthermore, while platinum and palladium are purchased as investments, they have a much larger industrial component than gold or silver.

As I have mentioned many times, gold and silver disconnected from the broader markets when the Dow Jones Index fell 2,000 points in the first six weeks of 2016.

The two reasons I believe gold and silver jumped considerably as the markets sold off at the beginning of 2016 were:

  1. Gold and Silver were extremely oversold, and the Commercial hedgers’ short positions were at a low, thus very bullish
  2. Investors were extremely worried that the Dow Jones and markets were beginning a massive correction, so they moved into both gold and silver

To explain why investors were spooked in 2016, we need to look at the following chart:

Dow jones (september 14, 2018)

Typically during a major correction, the market makes several attempts at a top. In 2007, there were three tops made before the market finally came down in 2008. Then in 2015, we had three more tops and two large corrections. The reason investors’ worry turned into fear at the beginning of 2016 was that the last top did not reach the previous 18,000 level.

Full Article: https://goo.gl/asrgNh

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 17 2018

moneymetals

A Reader Asks: Should I Sell Gold and Buy Bitcoin?

Although the fervor has diminished substantially since the crypto price smash earlier this year, we do still see a degree interest in bitcoin among precious metals investors.

Question and answer

Bitcoin and metals arguably share some appeal as an “honest” alternative and as a hedge against the fiat dollar and the insolvent U.S. government which backs it.

In light of the bitcoin price falling dramatically this year, one reader asked, “Is now a good time to swap gold for bitcoin?” Below is our response.

It may be bad form to answer a question with another question, but it seems like a good way to approach this subject. So we ask; are you in the mood to gamble? If you are, it might make sense to swap some metal for bitcoin.

Cryptocurrency can potentially generate bigger returns... in exchange for bigger risk. Since there is no tangible backing to bitcoin, it could conceivably go to zero – much like shares in a defunct “dot com” company.

The two assets are far from interchangeable and will serve different purposes in your portfolio. Bitcoin has often been called “digital gold,” but that comparison is dangerously wrong. Gold is a reliable store of value with a track record thousands of years long. Bitcoin’s price has collapsed from its all-time high of nearly $20,000 to $6,000.

This is a vital difference between gold and bitcoin: gold will always retain some intrinsic value, while the price of a digital token might go all the way to zero. That is not our prediction for bitcoin. It is, however, a possibility.

A technology, which is one way to think of bitcoin, must hold its value amongst a growing number of alternatives. If it cannot, it will be replaced. That happens, even to leaders. Remember Napster and CompuServe?

Continue Reading: https://goo.gl/EHsJYV


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​

August 17 2018

moneymetals

For Sterling (Silver) Results, Repetition of the Basics Is Worth Its Weight in Gold

Whenever you encounter a "sticking point" in some activity – any activity in which you are engaged – it always helps if you "return to the basics."

Sure you may "know" what they are, but do you really follow them? Ask an expert in most any field of endeavor, and he/she will tell you the same thing.

The basics that lead to outsized results are still around and followed for a reason – because they work! Take the idea of building up a comfortable position in precious metals...

You've decided that you either want to start "stacking" – or adding more to your current holdings. You look at the charts and see that prices are falling, and others are fearful. You're not interested in "buying the bottom." You're looking to build a foundational position into that bottom.

From experience you know that "going against the crowd" and buying when metals are "on sale" has been working since at least 2002, when gold was under $300 an ounce and Silver was below $5 the ounce.

Even at today's prices, gold and silver are still up 400% and 300% respectively.

Gold price has crushed the market so far this century

After reconfirming your understanding and belief that precious metals have remained as a store of value for thousands of years will continue to do so, you move closer to acting on that belief.

Revisit your tolerance for risk, the financial means available, your holding time outlook, and how much you're willing to pay per ounce.

Check out the article here: 

August 03 2018

moneymetals

Trump’s Fed Feud; Indexing Capital Gains Taxes to Inflation?

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

Samuel pelaez

Mike Gleason: It is my privilege now to welcome in Samuel Pelaez, CIO and Portfolio Manager at Galileo Global Equity Advisors, a Canadian subsidiary of U.S. Global Investors. Sam manages Galileo's Growth and Income fund as well as the Technology and Blockchain fund and also follows the natural resource and gold mining space quite closely. And it's a real pleasure to have him on with us today.

Sam, thanks so much for the time and welcome.

Samuel Pelaez: Thanks, Mike. It's a great pleasure to join you. I think this is the first time.

Mike Gleason: Yeah, absolutely. Excited to get a chance to talk to you finally. You've been talking about commodities being way undervalued. You published a chart back in the spring showing the value of the S&P GSCI Index of commodities companies relative to the broader S&P 500 Index. The ratio is near all-time lows. Since that chart was published in April not a great deal has changed, so talk about where we're at here in commodities now and give us your thoughts on what the value proposition looks like today because they certainly have been laggards compared to the broader markets.

Samuel Pelaez: Yeah, absolutely. That's my favorite all-time chart I think. I'm a big proponent of commodities and natural resource investing. Keep in mind, that chart goes over 60 years or so of markets. We've had cycles like this three times or this will be the third time. Twice in the past we’ve seen that sort of extreme rating where commodities are so undervalued relative to the broader market as measured by the S&P 500.

What that suggests is that we may be at a juncture here that provides an opportunity to invest in resources that we haven't had for over 20 years. Last time this happened was coincidental with the NASDAQ 1990-2000 boom. That was the time when the commodities were as undervalued relative to the broader market. And what happened since was obviously the big industrialization of China commodities did very well for a decade up until 2008 and even a little bit further than that.


Check out the full podcast here.: 
https://www.moneymetals.com/podcasts/2018/08/03/bull-market-natural-resources-001588

July 26 2018

moneymetals

Silver Threads among the Gold: What the Tea Leaves Seem to Be Telling Us

The ongoing July silver (and gold) slam has a 2008 feel about it. Important data point elements are different, but there's an air of panic on the part of physical precious metals' owners.

"Major trend lines" being broken to the downside; physical metals' buying (in the U.S. off significantly so far on the year; (some) long-term silver holders giving up the ghost and selling their metal below spot.

About the only thing we have yet to see – on a large scale – is "paper metal" being offered at a price well below what a customer would actually pay for the physical.

In late 2008, while silver was being quoted in the markets at $9.50/ounce, you simply could not find it in "real life" for much less than $12 the ounce.

How Might George Soros Approach This Situation?

In a recent interview for The New York Times Magazine, George Soros talked about his years' running the very successful Quantum Fund – which yielded investors an almost unheard of 40% annual rate of return.

He spoke of his "theory of reflexivity" – the idea that "peoples' biases and perceptions can move prices in directions that don't accord with the underlying reality."

He would "nibble" on an idea until investors' emotions became increasingly disconnected from what was really taking place – or what was almost certainly slated to be – once more balanced circumstances had come to pass. Then he would substantially add to his position.

Soros didn't always get it right, but when he did, he made a killing. His most famous bet was shorting the British pound... against the Bank of England.

Soros claimed his strength as an investor was in recognizing and acting on what he referred to as “far from equilibrium” moments.

SGE silver delivery volume chart

Shanghai International Gold Exchange silver volume continues to rise sharply.

A Technical Take

As for near-term action, Hidden Pivot maven, Rick Ackerman wrote recently in his Rick's Picks column, that silver has the potential to make a large move either up or down, depending upon what the price does on the hourly and monthly charts.



July 24 2018

moneymetals

THE INDIAN INVESTOR: The Major Wild Card In The Silver Market

There’s a sleeping tiger in the silver market, and it isn’t the Chinese. While the Chinese continue to acquire a lot of gold, they aren’t that interested in silver However; it’s the Indian investor who is has been the dominant player in the silver market. Why?

According to an article published last year on LiveMint.com, “Silver is so ingrained in Indian tradition that the country’s currency, the rupee, is named after ‘Rup,’ the Sanskrit word for silver.” How interesting. I have been doing research in the silver market for over a decade, and I just found out from this article that India’s currency, the Rupee, is named after silver. It just goes to show, we learn something new every day.

Thus, it makes perfect sense that the Indians are the major player in the silver market as their silver imports have accounted for a significant portion of annual global mine supply. In a recent article by Louis at Smaulgld.com, he provided the following charts on Indians monthly and annual silver imports:

Indian silver imports 2017-2018

(Indian Monthly Silver Imports)

Indian silver imports 1999-2018

(Indian Annual Silver Imports)

As we can see, India imported a record 902 metric tons of silver in April since last year. Furthermore, as Louis states in his article quoted above:

Indian silver imports through April 2018 were 2,889 or an average of 722.5 tons. If this average holds throughout the year, India would import 8,667 tons of silver in 2018.

If India continues to import the same amount of silver as it has over the past four months for the remainder of the year, it will reach nearly 8,700 metric tons (mt) and surpass its previous record set in 2015 at 8,529 mt. Now, if India did import 8,700 mt of silver this year, it would account for 32% of total world mine supply.

Continue reading....

July 23 2018

moneymetals

Gold & Silver Need THIS to Unfold before They Rally Sharply Higher...

Well now, for more on the unfolding trade war, the selloff in commodities and gold, and much more, let’s get right to this week’s exclusive interview.

Greg weldon

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 experience, specializing in the metals and commodity markets, and his close connection with the metals led him to author a book back 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 regular presenter at financial conferences throughout the country, and is a highly sought-after guest on many financial shows. And it's always great to have him on the Money Metals Podcast. Greg, good to talk to you again. Welcome back.

Greg Weldon: Thanks, Mike. My pleasure.

Mike Gleason: Well, Greg, we've been keeping a close eye on the dollar, as I know you have been as well. For metals investors, the rally in the dollar is providing some serious headwinds. When we last spoke in early May, the rally had begun. You weren't surprised, and thought it might run up to the vicinity of 96 on the DXY Index, and that's looking like a very good call. We're just a bit over 95 currently. But you thought the rally could fizzle out, and the dollar could be back on the slide somewhere in the second half of the year. So, what are your thoughts currently? Has anything changed your outlook for the greenback, Greg?

Greg Weldon: Yeah. I think the odds of the dollar continuing higher have expanded here, and I think it's a function of the Fed. I think we got information in the last week or so that is, frankly, pertinent, because if you kind of trace back to what we were talking about in May, we started to see signs of stagflation. We started to see signs of stress in the second derivatives of where the growth had been. A place like Germany, an export juggernaut. When you start to see some issues in places like the Czech Republic, Hungary, Poland, they provide semi-finished goods to Germany that finishes them and exports them. So, we had already kind of seen some cracks in the global macro dynamic globally.

And the question then was, "well, if inflation's going higher, will the Fed follow inflation even at the risk of potentially bringing the hammer down on the backend on the consumer who is extremely leveraged here, unprecedented borrowing.” Same thing as 2006 and 2007. You're borrowing against unrealized paper profits. In that case it was mortgages, in your home, the value, all right?

In this cases it's the stock market. Like the case in 2006 and '07, home prices will never go down, right? Well, we learned that's not true. And then the case here it seems like stock prices will never go down, right? Passive investment, just pile in, and you'll be rich, and here's the American dream in a nutshell, no problem. Well, we can call into question that, of course, and if the stock market declines and consumers are on the hook, you're going to be facing a very similar situation where the consumer's kind of upside down.

Having said all of that, the question really puts the focus on the Fed, and what the Fed just told us in their monetary report, which is the basis for which Chairman Powell is using as his testimony here on Capitol Hill, The Humphrey-Hawkins semiannual report to Congress. The Fed was very specific. I was really surprised at the language in this report. It's 71 pages. I went to every single page. It took me six hours yesterday doing this, but it was really worth it because the Fed say in this report, not only do we want to get to a level where we're at the neutral rate, the kind of natural rate, the neutral rate of Fed policy which we've been saying all along. They want to get to neutral, which is somewhere between two and two and a half based on where inflation is.

Well, the Fed just told us, "We don't want to just get to neutral, we want to get a slight bit above neutral, i.e. we actually want to get tight here." All right? And if inflation's moving higher and the Fed wants to get tight, meaning above the rate of inflation, they're behind the curve and they're going to have to move more quickly and this was kind of the tone of this monetary report.

And the sense was, they're admitting, "Hey! Inflation is now above our target for the first time, that doesn't mean we're slowing down.” So this is bothering commodity markets because it's lifting the dollar. The Fed is presumably going to be tighter, it's going to chase inflation, doesn't care about what the back end economic dynamic might be and that you throw in the trade dynamic, which is having a huge impact, i.e. look at the declining commodities. Look at the decline in China. Look at the decline in Canada in terms of some of the economic numbers, let alone the markets. Look at the pressure on emerging market currencies.

The other thing the Fed said in this report was the external risk is primarily seen in Argentina, Turkey, China, and emerging Asia. We run spreadsheets here where I have my own proprietary algorithms that I wrote back in the 1980's. I'm a math geek by heart, by history and we have algorithms that we use to track the ETF's out there, all of them. Well, I ran a full scan yesterday and the top 25 trends right now in the ETF world, including international ETFs, commodity ETFs, fixed income ETFs, all the sector ETFs in the U.S., 25 top trends, 24 were bearish and it was spread out among metals, commodities, China, and emerging Asia. All the things the Fed just cited as their risk factors.

So, my question then becomes, again, does the Fed pay attention? Is the Fed doing their normal puppeteering here where they're trying to be vocally tighter so they can use words to kind of ease some without actually having to totally shift policy and start cutting rates? I don't know, but I think right now, whereas maybe we might think that the dollar would soften when the Fed rhetoric softened, that's not happening because the Fed rhetoric is not softening. In fact, it's getting harder and this is becoming a problem. You see it in emerging markets, you see it in commodities, and you certainly see it in gold and silver.

You can read or listen to the entire podcast here

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)

July 10 2018

moneymetals

How NOT to Become a Casualty in the War on Cash

Lots of bullion investors wonder if the metal they hold might one day be needed for barter and trade. They bought gold and silver, at least in part, as a form of insurance. It just might come in handy in an extreme circumstance such as a currency crisis of the sort Venezuelans are grappling with right now.

However, a hyper-inflationary collapse in the dollar isn’t the only dire scenario to insure against.

War on cash

It is now clear that the dollar, and the financial network it runs on, is a mechanism for controlling people who don’t toe the government line.

That fact may be a greater reason for alarm than the prospect of a dollar collapse. But it gets far less consideration.

Wall Street banks and government regulators have teamed up against your liberty and your privacy.

Officials would like to track 100% of what you do with your money, and the banks would like to charge a fee on 100% of those transactions. Those motivations are at the root of the today’s war on cash – the push to eliminate paper cash and replace it with electronic transactions.

The Bank Secrecy Act will soon turn 20 years old. Banks have filed millions of secret Suspicious Activity Reports on transactions involving cash. And Americans performing a transaction involving more than $10,000 in cash may have an IRS Form 8300 documenting their transaction filed with the federal government.

Americans trying to transact privately with cash are being watched, and they have no idea how closely.

​Continue reading: ​
https://www.moneymetals.com/news/2018/07/09/not-become-a-casualty-in-war-on-cash-001571

July 05 2018

moneymetals

Trump’s Trade Wars Could Spark Global Flight to Gold

President Donald Trump’s “America First” trade policies are upending decades of global arrangements and entanglements. Globalists are aghast that the leader of the free world is openly confrontational toward NAFTA, NATO, the European Union, United Nations, and World Trade Organization.

In rebuffing the global community by pursuing unilateral tariffs and vowing to win trade wars against both rivals and putative allies alike, Trump is playing a high stakes game. Trump’s trade wars could test the U.S. dollar’s status as world reserve currency.

According to economist Brad Schiller, “Nations are willing to accept U.S. dollars in exchange for their goods because they trust that the dollar will retain its value… The long history of U.S. dollar stability gives the U.S. this unique trade advantage — a key reason we can import more goods than we export year after year.”

Schiller, like many conventionally trained economists, seems to believe that our ever-growing trade deficit benefits us. In the near term, we do get to consume more things. But countries that are sending us stuff in exchange for our dollars are effectively accumulating claims on our future.

China holds title to an enormous hoard of U.S. dollar IOUs. U.S. taxpayers now owe China more than $1.2 trillion. China ran a $366 billion trade surplus in 2017 alone.

President Trump has moved to impose tens of billions of dollars in tariffs on China and other trading partners including Canada, Mexico, and the European Union. They have responded with retaliatory tariffs affecting everything from wheat crops to Harley-Davidsons.

United states tariffs

Winning trade wars may not be as easy as Trump had thought.

Dying U.S. Senator John McCain, a longtime Trump detractor and globalist, is among those who are actively rooting against the U.S. administration and consoling foreign countries.

“To our allies: bipartisan majorities of Americans remain pro-free trade, pro-globalization & supportive of alliances based on 70 years of shared values. Americans stand with you, even if our president doesn’t,” McCain ranted on Twitter.

It's not clear the failed former presidential candidate speaks for “bipartisan majorities of Americans” as he boasts. Nor is it clear that these foreign alliances reflect our “shared values.”





June 29 2018

moneymetals

Frank Holmes: Tariff War Akin to Raising Taxes, Recession Looms

Mike Gleason: It is my privilege now to welcome in Frank Holmes, CEO and Chief Investment Officer at U.S. Global Investors. Mr. Holmes has received various honors over the years, including being named America's Best Fund Manager for 2016 by the Mining Journal. He is also the co-author of the book, The Goldwatcher: Demystifying Gold Investing and is a regular guest on CNBC, Bloomberg, Fox Business, as well as right here on the Money Metals podcast.

Frank, welcome back and thanks for joining us again. How are you today?

Frank Holmes: I'm great, and it's great to be chatting with you about this languishing gold market.

Mike Gleason: Yeah, we certainly have a lot to talk about. Never a dull moment here in these markets. To start out here, Frank, when we had you on back in March, we talked about the steel and aluminum tariffs Trump imposed. Things have escalated since then. The president is talking about tariffs on European automobiles and another $2 billion on imports from China. We're very curious about what impact this trade policy might have on the dollar and, by extension, precious metal. So far, at least, the dollar has been strengthening, but we aren't sure how seriously the markets are taking the possibility of a trade war becoming a currency war. If that happens, the U.S. certainly seems vulnerable. We have by far the most to lose given the dollar's status as a global reserve currency. What do you make of the recent strength in the dollar, and where do you think things may be headed if we wind up in a full-blown trade war?

Frank Holmes: Well, first, what I'd like to say is I wrote a piece said, "President Trump, you can't suck and blow a balloon at the same time." It was a just amazing feat to get corporate taxes down, and that was really the catalyst that launched the stock market, that fulfilled and provided visibility for the next several years of robust economic growth. When I talk to all the macroeconomists, all the macro analysts who are pointing out that immediately Walmart increased salaries as a consumer company, and a manufacturing company started spending more money on factory upgrades. 10 years since they've really spent a lot of money on durable goods. And that was really important for the metals as a whole.

But with this whole tariff war, well, that's basically raising taxes. Tariffs are always an indirect tax on an industry or sector of the economy, and it's defeating. And this week, the Fed chair was saying that, Powell, that he's getting feedback that exports are starting to be canceled because of the tariff battle right now. So I think the combination of the stronger dollar along with the tariff battle is only going to set us up for a recession faster than we thought, unless he can tune back what he's been talking about.

But I think to understand capital markets, the flows of funds, that historically when the two-year government bond, which is the bond that relates to all the short-term currency fluctuations, they compare 90 days and two-year government yields to the inflationary rate of their country, and then they look at all the countries and compare them to net positive return. And right now, the U.S. dollar is strong because the two-year government bond is above the dividend yield of the S&P 500. Well, as soon as that happened, immediately, pension fund institutions stopped buying stocks because they can turn around and get a guaranteed yield for the next two years with no risk on a dividend yield that's higher than what the S&P's forecasted to deliver in the future of two years and giving now.

So that creates this VIX explosion. And then we have this sort of fear that rates are going to continue to rise with the CPI number because inflation is rising, and that's put a dent in the price of gold and made the dollar strong. But a strong dollar at this stage, along with tariffs, is the worst thing for economic growth and prosperity. And Trump's ego is big enough and rational that he wants growth and he wants economic growth, so I think we're going to see in the second half, we've had a peak in rates, and we'll see rates come off. And I think then you'll see this move in the price of gold.

Mike Gleason: Setting aside any ramifications for the dollar, do you think the U.S. can win a trade war? I mean, the president certainly seems confident. On the one hand, we agree with an observation you made when we spoke last, China has stolen a lot of intellectual property, and it would be nice if we could do something about that. But on the other hand, tariffs are bound to raise prices for Americans. It's a tax, like you said, and there are plenty of examples of trade restrictions and that sort of central planning leading to all sorts of unintended consequences. So how do you rate the president's chances for success here, Frank?

​Read/Listen to the entire article here. ​


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

A Bargain Hunter’s Delight

Falling prices and low premiums did prompt strong retail buying in the markets for physical bullion in the past week.

The market is presenting the best opportunity to buy popular products in a very long time. Spot prices are the lowest they have been since December, but premiums are the lowest they have EVER been in more than a decade.

Consider pre-1965 90% silver coins, for example.

Silver bottomed under $14/oz in 2015, but premiums on silver dimesquarters, and half dollars were north of $5/oz at the time. Investors had to spend close to $19/oz to buy those coins. Today they can be purchased for well under $17/oz – only a few cents over spot for larger orders.

Silver Eagle premiums are at generational lows as well. Random year Silver Eagles are selling for as low as $2.05 over spot, for example​.


Article source: ​
https://goo.gl/tVsnUZ

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 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 06 2018

moneymetals

Total U.S. Public Debt & Interest Expense Hit A New Record High

The total U.S. public debt hit a new record high of $21.145 trillion on the last day in May. AS the U.S. debt increased, so did the interest expense which jumped by more than $26 billion in the first seven months of the fiscal year. That's correct; the United States government forked out an additional $26 billion to service its debt (Oct-Apr) versus the same period last year.

While the U.S. debt reached a new high on May 31st, it took nearly two months to do it. Let me explain. During tax season, the total U.S. public debt actually declined from a peak of $21.135 trillion on April 10th to a low of $21.033 trillion on May 3rd. Since then, the U.S. debt has been steadily moving higher (including some daily fluctuations):

If you spend some time on the TreasuryDirect - Home site, you will see that the total public debt doesn’t go up in a straight line. There are days or weeks where the total debt declines. However, the overall trend is higher.


Continue reading here

​:​
(https://www.moneymetals.com/news/2018/06/05/us-debt-new-record-001510​)​
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