Tumblelog by Soup.io
Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

May 08 2019

moneymetals

Russia & China Intend to Drain the West of Its Gold

Precious metals markets got hit this week as the Federal Reserve threw cold water on the idea of interest rate cuts.

Fed policy makers met on Wednesday and left their benchmark rate unchanged as expected. The Fed’s statement noted that price inflation excluding food and energy has declined over the past 12 months and is officially running below 2%. This, even as oil and gasoline prices have trended sharply higher this year.

Fed chairman Jerome Powell described the below-target official inflation number as “transitory.” He indicated he expects inflation to return to target at 2% without more central bank stimulus.

Powell’s comments disappointed investors who were hoping for a rate cut later this year. Equity markets joined metals markets in selling off.

For the week, gold prices are down 0.3% and currently come in at $1,283 an ounce. Silver is posting a weekly decline of 1.0% as spot prices trade at $14.98. Although they are bouncing back a little bit here today both gold and silver are at risk of closing out the week below some significant support levels, which could bode poorly for the near term outlook.

Platinum’s recent run higher got dealt a huge setback this week, with prices dropping $30 an ounce or 3.3% to now trade at $872 per ounce. And finally, palladium is also getting hit hard, down 4.3% since last Friday to trade at $1,372 as of this Friday morning recording.

Market volatility around FOMC meetings is to be expected. Unfortunately, traders still key heavily off the policies and pronouncements of central planners. To what extent central planners intervene directly in markets has long been a concern of sound money advocates.

The Gold Anti-Trust Action Committee, also known as GATA, has assembled massive amounts of circumstantial evidence of manipulation in the precious metals markets. Sometimes the evidence is clear cut – as when traders at major banks are found guilty of cheating the system. In other cases, there are dots yet to be connected.

The Federal Reserve is notoriously secretive, and the Treasury Department is also tight lipped about how and when it intervenes in markets. Those of us who think it’s important to shed light on these activities have very few allies in Congress.

One is Representative Alex Mooney, a Republican of West Virginia. Chris Powell of GATA recently appeared on USA Watchdog to give an update on some of Representative Mooney’s efforts.

Continue reading: https://bit.ly/2VPVOrr

May 01 2019

moneymetals

A Look Inside the Scheme to Eliminate Cash, Impose Negative Interest

Central bankers and politicians love inflation, but they need “bag holders” to have faith in the value of the fiat currency IOUs they hold. The trick is to avoid suddenly destroying the ephemeral confidence in currencies by printing too much too fast.

Inflated dollar

Central bankers may also need to limit the options inflation wary citizens have for escaping.

They are both shifty and innovative when it comes to making sure the ill effects of perpetually devaluing currency are primarily borne by the citizenry.

Lying and trying to hide what they are doing to the currency has been tradition with politicians since Roman times. Nero began quietly reducing the silver content of the Denarius around 60 A.D.

Today central bankers and governments don’t have to bother with altering physical coins. Every currency can be quietly devalued electronically.

The financial central planners try to calm the herd with rigged inflation statistics designed to show the money losing purchasing power far more slowly than it actually is.

They use “hedonic adjustments,” “geometric weighting,” and many other ploys to arrive at a politically palatable inflation rate. Or, even more clever, they convince investors the best way to evaluate the strength of the money is simply to compare it with other fiat currencies.

That is how the U.S. dollar has earned its reputation for “strength” in recent years.

Headlines in the financial press broadcast the DXY index is rising. The dollar buys more euros and yen, which matters to practically no one except tourists. Meanwhile it buys far less of stuff that does matter -- food, housing, and most everything people need to live.

Another trick is for politicians and central bankers to simply print money under the guise of economic imperative.

Full article: https://bit.ly/2ISxi2Q

March 29 2019

moneymetals

So Why Should You Own Gold?

Maybe you have some gold (and silver) but not enough. Maybe you haven't added to your stash for quite awhile, and you kinda' forgot why you bought it in the first place.

Or perhaps you don't own any precious metals at all!

If one of these circumstances fits you, then it's time to refresh your memory on the multiple reasons why you should own gold, assess your risk profile and unique financial circumstances... then act!

The oft-stated Gresham's Law tells us that when a government dictates the exchange rate between different types of money, the "good," or undervalued method of exchange gets chased out by the "bad," or overvalued version.

Thus the "bad" money stays in circulation and, as debasement (inflation) picks up, is quickly spent.

Unbeknownst to most – for now – U.S. inflation (greatly understated by "official" statistics) is increasing across the board. It doesn't need to hit double digits in order to move the dial on gold and silver prices. Invariably, the "smart money" sniffs out the potential well beforehand – which is what it's been doing for the last 9 months!

The "good" money in the U.S. is in reference to gold after FDR's infamous 1933 edict banning circulation… and later, the removal of silver from our coinage starting in 1965.

Today, a pre-1965 quarter at $16/ounce silver is worth about $2.75. Why would anyone exchange it for an 8% copper/92% nickel slug? As for a gold coin, don't even bother doing the math!

In Venezuela, according to the IMF, inflation will rocket along this year at 10 million percent! How long do you think the ironically-named Bolivar Fuerte ("strong bolivar") stays in someone's pocket, bank account, backpack... or large cardboard box?

You probably recall the reasons for owning gold. Here’s a timely review...

It's durable. Spanish gold bars and coins have been recovered from shipwrecks submerged for centuries... no worse for the wear!

It's portable. A 25 (troy) ounce tube weighs less than two (avoirdupois) pounds and is worth around $33,000 today.

It's divisible into small portions. 1/10th of an ounce is the size of a thin dime, but you can buy/store it by the gram - or in blocks of grams.

It's difficult to counterfeit. Just about any quality coin shop can spot a "weight problem" in relation to the expected size of a bullion coin or bar that a crook – or a naive buyer – might bring in for fiat trade.

It stores easily. Significant dollar amounts can be squirreled away just about anywhere.

Gold available for purchase is in finite supply. At a fairly consistent production rate of around 2%/year (and falling), gold is unlikely to experience a "production spike" like a base metal might.

It can serve as collateral for loan agreements, and as financial insurance.

Annual gold production (2003-2024)

Gold (and silver) make great gifts. My daughter still has the 1 troy ounce Krugerrand she received as a high school graduation present. The cost: $275. Her brother has a tube of 25 American Silver Eagles purchased for $7.50 apiece.

It's costly to mine. The industry gauging standard of All-In-Sustaining-Costs (AISC) for even the most efficient miners is still about 80-90% per ounce of what they're paid from the sale of production. What's more, miners have a wasting asset that – unless the deposit can be replaced with additional ore – diminishes the value of their project with every ounce they sell.

Read the full article here: https://goo.gl/B9eKau

March 27 2019

moneymetals

The Staggering Amount Of Gold & Silver Investment Since The 2008 Financial Crisis

silver-gold-investment-since-2008-social.jpg

While the demand for precious metals is certainly off its highs from prior years, investors would be quite surprised by the astonishing amount of physical gold and silver investment since the 2008 financial crisis. Only by comparing the gold and silver investment demand to the prior decade, can we truly understand how the precious metals market has changed, and probably forever.

Now, before I get into the information, I wanted to say a few things about precious metals sentiment and the disillusionment, and at times, the outright disgust, by a percentage of former gold and silver investors. I am not going to name any names, but rather focus on the inability of these individuals to CONNECT THE DOTS in regards to the disintegrating Global Financial Ponzi Scheme.

And… for those few who still believe in the “Crypto Miracle,” to overtake 2,000+ years of gold and silver as money, you have my sympathies. I am not going to get into any details, but just to say… don’t count on High-Tech to solve our problems in the future. High-tech only creates more problems. So, if you believe high-tech is going to solve problems, then you don’t understand the historical record on the “Collapse of Complex Societies.”

Regardless, I believe part of the reason the “once” precious metals bugs, have now become quite frustrated, is that they have been taken in by the Mainstream Financial Koolaide. And why shouldn’t they? Stocks and real estate prices have been going up and up, until recently, for the past seven years while the metals peaked, declined, and have been virtually flat.

Yes, it’s frustrating to see the value of precious metals underperform the market while everything else seems to be heading toward the moon. But, that in itself should give anyone with a decent amount of intellectual know-how the ability to sniff out that… SOMETHING JUST AIN’T RIGHT. For some odd reason, all the negative aspects of the economy, the massive debt, derivatives, and leverage are all but forgotten when all we do is focus on the highly inflated stock, bond, and real estate asset values.

Unfortunately, the inability to see how the debt, derivatives, and leverage have created the biggest Global Ponzi Scheme in history will create the largest financial collapse ever witnessed, causing most investors to go bankrupt. It’s only a matter of time, and time is running out.

So, when I write about gold and silver, I am not doing so because I want to see a 1,000+% gains in the metals (that wouldn’t bother me either), but because there really isn’t much else worth owning as “Liquid Investments” when the Phat Financial Lady finally sings. Thus, I don’t focus on price targets or timelines, because that’s a fool’s game (one I was guilty of doing several years ago… no longer).

Frustration occurs when something doesn’t happen when or how we expect. Which means, it’s best to focus on the critical information, make one’s investment decisions, and let the system unfold in its due time.

The 2008 Financial Crisis Was A Game-Changer For Gold & Silver Investment

Because we focus on day-to-day news, we tend to overlook longer-term trends. While short-term information is important, it doesn’t override longer-term fundamental trends. Well, yes… maybe in some cases, but if we take the collapse of the Ancient Roman as an example, it cannot be attributed to just the events that occurred over the last few years of the empire, but instead, the centuries it took for its Falling EROI – Energy Returned On Investment, to destroy it from within.

Today, we are in the same predicament as the Ancient Roman Empire. However, the overwhelming majority of people don’t see it because they are only focused on short-term results and information. Thus, to truly understand the future, we have to look back in the past. And, if we do this with gold and silver investment, we will see a very interesting trend.

According to some of the best industry sources, the World Gold Council and World Silver Surveys, investors purchased 16,200 metric tons (mt) of gold and 57,800 mt of silver from 2009-2018:

Total physical gold & silver investment (2009-2018)

That turns out to be 520 million oz of gold and a nearly 2 billion oz of silver. Now, these figures only represent the physical bar and coin demand, including central bank net purchases. I did not include ETF’s or similar products. First, there is no way of knowing if the gold or silver is over-subscribed in these precious metals ETF’s or secondly, if all the metal that is listed, is contained in the vaults. So, the figures are likely much higher, especially for silver.

Continue reading: https://goo.gl/mpmhTe

March 25 2019

moneymetals

What Do Airline Crashes and the Precious Metals Markets Have in Common?

Boeing and the Federal Aviation Administration worked closely together to hustle a new passenger jet through the safety certification process. The combined efforts to save time and cost, coupled with little sense of accountability, resulted in a tragic safety flaw.

Boeing airplanes

Now hundreds of passengers are dead, albeit in other countries. The public is finding the enormous trust placed in the manufacturer and the agency tasked with monitoring safety was badly misplaced.

The regulator tasked with safety appeared more interested in protecting Boeing’s monopoly and bottom line.

Here is an excerpt from an article last week in the Seattle Times:

Federal Aviation Administration managers pushed its engineers to delegate wide responsibility for assessing the safety of the 737 MAX to Boeing itself. But safety engineers familiar with the documents shared details that show the analysis included crucial flaws.

The FBI announced it will join a criminal investigation into the process for certifying the 737 MAX.

Precious metals investors will find many elements of the Boeing story familiar.

Gold and silver bugs have already learned just how dangerous it is to trust corrupt and captured federal regulators. Now that lesson is being taught to Americans at large.

By the time all the details of this sordid tale have been published, more Americans will wonder who federal regulators really work for.

Gold and silver investors who have been similarly betrayed by the regulators. Regulatory malfeasance and corruption is a theme the precious metals markets and airline industry have in common.

Concerns over regulatory capture and a track record of failure were largely ignored. Editors at Bloomberg outlined some of the history of the FAA in a March 21st editorial. Suffice it to say the recent crashes aren’t the only examples of the agency putting the needs of airlines and plane manufacturers ahead of public safety.

Continue reading: https://goo.gl/8LMy2W

March 22 2019

moneymetals

Federal Reserve Cries Uncle as Rates Fall, Commodities Strengthen

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, it's been too long. How are you my friend?

David Smith: It's been a while and I'm happy to be back, Mike.

Mike Gleason: Well, David, for metals investors who got started after the 2008 financial crisis, it has not been an easy ride, as we both know. Prices rose sharply between 2008 and 2011, driven by the crisis and the Fed's response to it, 0% interest rates and massive amounts of money creation. Then the metals markets began to flounder. Some of the safe haven demand for metals dried up as the equity markets recovered and fear dissipated. Price rigging and suppression in the futures markets has progressed from conspiracy theory to conspiracy fact. Metals prices are not being set in free or fair markets, so it is not easy for some investors to hang in there. But the reasons to own metal are still there, bigger than ever.

So, now might be a good time to review some of them. You talk a lot about precious metals role as insurance. Would you mind going over how metals act as a form of insurance for our listeners, David, as we start out today?

David Smith: Well, there's several iterations of the insurance piece. As David Morgan of The Morgan Report always talks about, you buy the physical first and you buy that for insurance first and profits second. But if you look back, and a lot of people would not even believe this until they saw the chart. But gold held since 2000, has doubled the appreciation of the stock market, the overall stock market.

So, in spite of the big plans that we've seen, that we saw from $1,900 down to about $1,050 and then the move in 2016, we had, which gave most of it back and gold ended up for the whole process from that point, down about 45%. Silver down about 70% from 2011. In spite of that, the metals are still using their role as insurance of helping you diversify, of helping contradict other price changes in investments you may have and then, providing liquidity for you. So they, historically, have done that very well, that role of insurance and they continue to do so.

Mike Gleason: You talk about metals as a source of liquidity. What do you mean by that?

David Smith: It means that if you need money, if you have some kind of an expense you need to deal with right away, you can sell the gold right now at any gold operation, any salesmanship. Whether it's a jewelry store or an operation like Money Metals and you can get your money for that to pay that expense.

You can't do that with property. You can't do it with real estate, in general and collectibles and things like that. So, it gives you a real good opportunity. I always like to tell people from time to time, when you buy gold and silver, you don't think of it as buying something like a car or a fishing rod or a camera or something like this. You're exchanging one form, of which I would argue is inferior money, fiat money that's not backed by anything… you're exchanging that for a form of historic sound, honest money. You're not making a purchase per se. You're making an acquisition of a greater ability to have a financial element that can do really well for you and offer diversity.

Check out the full podcast/article here: https://goo.gl/p7Srnw

March 11 2019

moneymetals

Palladium Blowup Could Expose Scam of Gold & Silver Futures

Craig hemkeCraig weighs in again and offers a concise and clear explanation on what’s been happening in the broken and rigged silver futures markets. And also tells us why he sees 2019 being a similar setup to what we saw in gold and silver back in 2010 and 2011 when the metals went on an historic run. Don’t miss a fantastic interview with Craig Hemke, coming up after this week’s market update.

Markets got roiled this week on some downbeat economic reports and a surge in the U.S. dollar.

The Dollar Index broke out to a 21-month high on Thursday after the European Central Bank came out swinging with more stimulus measures. The ECB indicated it intends to leave ultra-low interest rates in place at least through early 2020. That coupled with bleak new forecasts for European economic growth helped drag down the euro and give life to the dollar on foreign exchange markets.

Dollar strength is usually negative for precious metals, and this week was no exception, at least until today. With a bit of a bump here on Friday gold now shows a slight weekly gain of 0.3% to bring spot prices to $1,298 per ounce. Similar story in silver, which seems to have found a temporary bottom perhaps and is now moving off of it. The white metal currently comes in at $15.40 an ounce, up 0.8% now on the week. Platinum is lower since last Friday by 5.2% to trade at $818. And white-hot palladium is succumbing to selling pressure – down 2.2% this week to trade at $1,515 per ounce as of this Friday morning recording.

For the near term, metals markets appear vulnerable to further selling if the dollar breakout holds. So the question is: How high can the Dollar Index go?

The dollar closed Thursday at 97.63 on the Index. If it continues to rally, then the key level to watch would be 100. The dollar rally of 2015 stalled twice right at 100.

Check out the full podcast here: https://goo.gl/uBmjM2

March 07 2019

moneymetals

Insane Stock Market Rally Due To Massive Global Monetary Liquidity

If you’re puzzled by the magnitude of the stock market correction since late December, you can thank the central banks for the rally. Yes, that’s correct… after the Dow Jones suffered the worst Christmas Eve trading day ever, the massive central bank monetary liquidity helped push the index up 20% from its low over the next two months.

Dow jones (daily chart) - february 28th, 2019

Of course, the markets were due for a reversal as nothing goes down in a straight line, but to see the sort of buying in the face of negative economic news and lack-luster earnings means that the inevitable CRASH will be even bigger when it finally arrives.

Now, according to the article, Back To Fundamentals, Daniel Lacalle stated the following in regards to the markets:

In 2018 we saw the first drop in global liquidity in more than a decade, and that generated significant losses in financial markets. Since the end of December stock markets have rebounded strongly because the data, although poor, is not as bad as feared, and mainly because the Federal Reserve changed its tone on the number of rate hikes, the ECB announced that it would be much more accommodative and the Central Bank of China introduced the largest injection of liquidity in five years.

In fact, between December 26 and February 15 we have seen the largest injection of liquidity in the markets of the last two years, bringing the global money supply to record levels.

The two key points stated above were that a drop in global liquidity in 2018 generated significant losses in the financial markets and the largest injection of global liquidity from December 26 to February 15th brought the money supply to a record level and pushed global stock markets back higher. 

Continue reading: https://goo.gl/oApVJ9

February 27 2019

moneymetals

Fed Must Face Reality: No Return to Normalcy for Monetary Policy

More than a decade after the 2008 financial crisis, U.S. monetary policy continues to operate in crisis management mode.

Despite a long, drawn out rate-hiking campaign – now paused – the Federal Reserve has yet to bring its benchmark interest rate up to normal levels historically.

It has yet to unwind the vast majority of the nearly $4 trillion in emergency asset purchases added to its balance sheet.

The Fed outlined its “normalization” policies back in September 2014.

The two main components of normalization are gradual increases in the federal funds rate toward neutral and gradual reductions in securities held on the central bank’s balance sheet.

Even with the benefit of an unusually prolonged period of favorable economic conditions, progress toward normalization has been slow and fleeting.

Expect Continually Low Interest Rates, Ongoing Stimulus

Full normalization – a return to pre-2008 monetary conditions as is the Fed’s stated goal, may never come.

It may not be possible to withdraw much more stimulus from mortgage and equity markets without collapsing them. It may not be possible to unload U.S. Treasury securities without causing a funding crisis for the government.

The governmental, corporate, and consumer sectors of the economy are ALL addicted to debt growth fostered by artificially low interest rates.

Falling interest rates

The Fed wants to wean everyone off easy money. The problem is, everyone is behaving as if easy money will never end.

Central bankers can’t act normally when private and public debt levels are abnormally high and projected to go much higher. The Fed wants to keep hiking rates to discourage, in former Fed chairman Alan Greenspan’s words, “irrational exuberance.”

But going one hike too far or too fast risks triggering a deleveraging event that brings about another financial crisis.

At its most recent policy meeting, the Federal Open Market Committee (FOMC) vowed to be “patient.” Minutes released last Wednesday show the Fed citing “a variety of considerations that supported a patient approach to monetary policy at this juncture as an appropriate step in managing various risks and uncertainties in the outlook.”

Cutting through the dense Fedspeak, policymakers essentially said they put their rate hiking campaign on hold due to risks in the economy.

Left unstated were possible policy concessions made to Wall Street and Washington.

Perhaps Fed officials got spooked by the sharp stock market correction in late December. Perhaps they succumbed to political pressure from the Trump administration’s “Plunge Protection Team.”

Continue reading: https://goo.gl/7JaqAY

February 25 2019

moneymetals

No Gold and Silver? So Far, So Good...

Screen shot 2019-02-25 at 9.56.16 am.png

In the original (1960) classic movie The Magnificent Seven, a Western adaptation of Kurosawa's The Seven Samurai, Vin (Steve McQueen), tells the wry tale of a man who fell off a ten-story building. Passing each floor people heard him say, "So far, so good!"

This strange little tale is an excellent metaphor for many of today's citizens around the globe.

Through the multiple lens of news reporting, political commentary and social media, they see what's going on yet remain transfixed in the moment, because things are well, so far, so good.

Venezuelans have done so even as adults there have lost an average 20 pounds, while their "leader" may have gained even more!

So far, so good... until it isn't.

On November 20, 2016, Indian Prime Minister Narendra Modi banned 500 and 1,000-rupee notes (worth respectively about $7 and $15). His edict – supposedly to crack down on untaxed, criminal used "black money" – instantly nullified as legal tender, 85% of all cash in circulation. People literally died standing in massive bank access lines.

Price of gold in india vs u.s.

Courtesy Manward Press

And what happened to gold because of this? Overnight, the domestic Indian price almost doubled!

These things (like FDR's surprise gold ban and Nixon's defaulting on the final link to a gold standard), tend to be preceded by an official government denial.

And it's usually over the weekend, when markets, banks, and local coin dealers are closed.

In an ad for the advisory letter, Manward, Andy Snyder makes the case for something similar happening in the U.S., saying:

... if you prepare well for the inevitable death of cash in America, you can set yourself up to avoid the pain and collect a hefty sum of money. Very soon, I expect the Federal Reserve will make the historic move away from cash and toward electronic money. It will accelerate the shift to a cashless America at light speed. Some investors will get killed; some will get very rich.

He then discusses electronic gold, but the key takeaway for us is that holding physical gold has always been – and will continue to be – a way to backstop the value of your other "assets," even if they are ground away because of government negligence or societal unrest.

Full article here: https://goo.gl/ZMhveB

February 14 2019

moneymetals

The Battle for Venezuela’s Gold Serves as a Lesson in Counterparty Risk

venezuela-gold-counterparty-risk-social.jpg

He who controls the gold makes the rules. That old adage applies aptly to the present crisis in Venezuela.

An international battle for control of Venezuela’s gold is currently underway. At stake is the country’s political future – and with it, the global market for its immense oil reserves.

In a desperate effort to cling to power, Venezuelan strongman Nicolas Maduro has been depleting his country’s gold reserves.

The oil-rich nation once had gold reserves of over 160 tons. But in recent months, Venezuela has sold off dozens of tons of gold to allies such as Turkey, United Arab Emirates, and Russia in exchange for euros and other globally recognized currencies.

Nobody in their right mind wants to conduct international business in the Venezuelan national currency, the bolivar. Even ordinary Venezuelans have largely ditched the bolivar for cryptos and other alternatives as inflation rates in the troubled country top 1,000,000%.

Even as the Venezuelan government was busily hyperinflating its currency and ripping off its people, it still held gold in reserve in order to retain the confidence of foreign creditors including Russia and China. Ordinary Venezuelans couldn’t redeem their rapidly depreciating bolivars for gold, of course. But foreign creditors could effectively demand payment in gold through the conversion of Venezuela’s gold into their preferred currencies.

For several months, President Maduro has been trying to retrieve some $1.2 billion worth of official gold being held in Bank of England vaults.

Fearing reprisals from the United States, which has imposed far-reaching economic sanctions on Venezuela, the Bank of England stalled, gave excuses, and ultimately refused to return Venezuela’s gold.

Venezuelan flag

The Maduro government charges that its gold has been illegally confiscated, in contravention of internationally recognized norms.

Maduro’s U.S.-backed rival, Juan Guaido, is demanding that the Bank of England hand over the gold to him instead!

Guaido is an inexperienced and until very recently obscure political figure in Venezuelan politics. Nevertheless, he has been recognized by the United States as the interim President of Venezuela – even though he hasn’t actually formed a government or removed Maduro from power.

If Guaido gets control over the country’s gold, it could be game over for Maduro. His international creditors would likely begin abandoning him.

Continue reading: https://goo.gl/AW5Xpo

February 11 2019

moneymetals

February 07 2019

moneymetals

If Financial Markets Make You Nervous, It’s Time to Own Physical Gold in Your IRA Instead

physical-gold-in-your-ira-social.jpg

If the sharp selloff in stocks late last year has you looking for other places to invest your retirement money, self-directed IRAs are worth a look. These accounts allow you to switch some of your Wall Street assets for tangible assets such as gold, silver, and real estate.

Retirement

Nervous investors are making the switch in increasing numbers. In addition to the diversification away from paper assets, it is easy to transfer funds from an existing IRA.

And the cost of maintaining the account is often well below what Wall Street charges to “manage” the funds.

Banks and brokerages successfully cultivated the idea that IRAs should contain only conventional securities – stocks, bonds, and mutual funds. The vast majority of retirement funds are invested in those assets, and financial institutions get a rake on every nickel invested. It is no accident that paper is the ONLY option in most accounts.

Annual maintenance and storage fees for $100,000 in IRA funds invested in physical gold, including the storage at Money Metals Depository, are roughly 35 basis points (.0035) for the first year and 20 basis points (.002) ongoing. The maintenance and management fees built into many ETFs and mutual funds are triple that amount.

Word is getting out about the “Self-Directed IRA” alternative. In return for assuming personal control over investments, people can buy a wider range of assets – including many options their stock brokers and financial planners either don’t mention at all or speak of dismissively.

Today, there are a number of good IRA companies offering self-directed plans, so it is worth covering how an investor might go about choosing one.

Find out more: https://goo.gl/ZBq5z5

January 31 2019

moneymetals

Peak Gold and the Coming Supply Crunch

peak-gold-supply-crunch-social.jpg

During the lackluster and otherwise unremarkable trading of 2018, a hugely important development took place in the precious metals markets. Gold production, in the estimation of some top industry insiders, peaked.

Peak gold represents the point at which the total number of ounces being pulled out of the ground by miners reaches a maximum.

It doesn’t necessarily mean gold production will suffer a precipitous fall. But it does mean the mining industry lacks the capacity to ramp up production in order to meet rising global demand and even higher prices would not make it happen.

One of the leading proponents of the peak gold thesis is Ian Telfer, chairman of Goldcorp (which was recently acquired by Newmont Mining to become the world’s biggest gold company).

Telfer remarked in 2018, “In my life, gold produced from mines has gone up pretty steadily for 40 years. Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down… We’re right at peak gold here.”

We’ll soon find out whether his call for gold production to fall in 2019 pans out. If it does, the implications for precious metals investors are enormous.

The concept of peak gold is controversial, to be sure.

Skeptics point to the thwarting of peak oil over the past decade. Just as technological breakthroughs in fracking and horizontal drilling caused an unexpected surge in crude oil supplies, could not advances in gold mining techniques also lead to an unforeseen supply surge?

When human ingenuity combines with the right market incentives, nothing can be ruled out. But unlike crude oil which is a byproduct of decayed living organisms and exists in various grades all over the world, gold is a basic element that came to us from exploding stars billions of years ago.

Top 5 gold miners production 2017 vs 2018

The amount of gold in earth’s crust is fixed. By contrast, oil and other hydrocarbons can be produced synthetically from renewable biomass.

Perhaps one day we’ll mine for gold in space or generate it in nuclear reactors or particle accelerators. Theoretically, it’s possible. Practically, there’s no prospect of these unconventional methods of boosting earth’s gold reserves becoming economically viable in our lifetimes. It would take a true “moon shot” in the gold price and/or a technological breakthrough that might be decades away from coming to fruition.

In the meantime, the gold mining industry is experiencing a major wave of consolidation.

Last year Barrick Gold and Randgold merged. This year Newmont Mining acquired Goldcorp. Many lesser known junior mining and exploration companies have been or may soon be gobbled up by senior producers looking for an economical way to grow their reserves.

Developing new mines is expensive, time consuming, and risky.

Continue reading: https://goo.gl/siinuz

November 08 2018

moneymetals

Rep. Alex Mooney: Bring Back Gold!

Washington has been quite the circus lately. Bret Kavanaugh’s appearance in front of the Senate Judiciary Committee prompted dozens of interruptions from Democrats and numerous protests from leftists.

During Twitter CEO Jack Dorsey’s testimony to the House Commerce Committee, journalist Laura Loomer demanded to be verified on the social media platform, and Representative Billy Long (R-MO) held an auction.

Alex Jones tried to fight Senator Marco Rubio, a has-been actress got escorted from the premise, and CNN's Oliver Darcy was on the brink of tears.

What a time it was on Capitol Hill.

But as the crazies enveloped these events, a more subdued and mundane hearing occurred at the same time.

Entitled “The Future of Money: Coins and Banknotes,” the House Subcommittee on Monetary Policy and Trade discussed cryptocurrencies, counterfeit currency, intellectual property, and the U.S. Mint’s security developments.

One distinguished GOP representative took the opportunity to home in on two issues important to libertarians, constitutionalists, and sound money advocates: the gold standard and the Federal Reserve.

Representative Alex Mooney (R-WV), who has ostensibly continued where former Representative Ron Paul (R-TX) left off, alluded to the Fed’s inflationary policies, taxing legal tender under the Constitution, and his bill that returns the nation to money backed by the yellow metal.

Continue reading... 

October 29 2018

moneymetals

Greg Weldon Forecast: Dollar to Get Whacked, Catalyzing Gold & Silver Rally

Well now, without further delay, 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 is a regular presenter at financial conferences throughout the country and is a highly sought-after guest on many popular financial shows, and it's always great to have him on the Money Metals Podcast. Greg, good to talk to you again and welcome back.

Greg Weldon: Thanks, Mike. My pleasure.

Mike Gleason: Well, Greg, let's start by getting your update on what impact trade policy and tariffs may be having on the U.S. economy. We last spoke in July. Tariffs were just beginning to actually take hold. Since then, the President has imposed additional tariffs. Anecdotally, we have seen some effect. We've recently ordered some steel storage lockers for our client storage vaults and the price was increased 10% based on the higher cost of imported steel. There are also wholesale price increases coming on one line of the preparedness products we offer on our SurvivalGoods.com website. We can assume lots of businesses are experiencing the same sort of thing. Do you think tariffs are now having a significant effect? Is any of the recent weakness in the equities markets attributable to trade policy, do you think?

Greg Weldon: Yes, no, and yes. First of all, in the sense of is tariffs having an effect, absolutely. But maybe not in the way you think and not in the way you couched the question. What I find really interesting is the Fed just published a really comprehensive survey last week in which they asked businesses, manufacturing firms, I should quantify, but this is where we're talking about in terms of trade ... Manufacturing firms in terms of the impact of tax cuts versus the impact of tariffs. And the results were fascinating, because the impact of tax cuts was dramatically positive, as you might suspect. But what you might not have suspected was the impact of tariffs, which were there a degree of percentage of firms which had negative impact from tariffs? Yes. I don't remember the exact numbers, but it was somewhere less than 20%.

At the same time, there was roughly something like 13% of firms that said that tariffs actually helped their businesses in terms of generating high revenue and to whatever degree there would be benefits to certain businesses, so offsetting and mitigating the negatives of the 20%, the 13%. So the net-net negative was not as big as you might think and was overwhelmed by the positives still from the tax cuts. We know that to be true as it relates to labor, stock buybacks, and even wages.

I think from the U.S. economic slowdown perspective not a big deal, and that's what Trump's counting on. But the bigger picture, absolutely an impact, because it's affected China so much, and China was already slowing. So the GDP numbers that came out, and you know that we look at most things from a mathematical perspective, and one of the knocks on China is the slowdown in retail sales, the slowdown in money growth, the slowdown in GDP growth, the slowdown in industrial production and FDI.

But the nominal numbers are so high in trillions of renminbi that of course you're going to have a percentage slowdown, because you came from such a low base. So something like retail sales, you've gone from a 15% year-over-year rate to 9, and everyone's up in arms because the consumer in China's slowing. No, it's a record number every month. It's just a lower percentage gain because the nominal numbers are so huge now.

But right here, the third quarter numbers, were different. There was real weakness, and it's kind of even ahead of tariffs, which are going to cause more problems for China. We already see inflation on the rise. We see commodity prices in renminbi breaking out here, big thing that nobody's really talking about too much. And the renminbi's about to take out 7, probably going to 7-1/4. So yes, major impact, but it's on China.

Then you see the flow through to how this affects the U.S. and how this affects other global markets, and this coming at a time when you have a lot of other things going on: The Fed, what's happening with emerging markets, how emerging markets, specifically Turkey, might flow into Spain, and how Europe is vulnerable. So, there's a lot more than just tariffs going on. Yes, there's a major impact, but it's not on the U.S. economy. It's in the market vis-a-vis what's happening in China as a result.

Full podcast: https://goo.gl/rKxkuN

October 26 2018

moneymetals

Win Big in Gold and Silver without "Buying the Bottom"

Last month in this space, I penned an essay titled "Are Silver and Gold 'at the Flood'"?. A few weeks later, two other essays on another widely-read site discussed this topic from the same perspective and sourcing – a case of "great minds thinking along similar lines"?

Please take time to read or review that Money Metals Exchange Post of August 28.

I made the case of a misalignment in the precious metals' markets regarding price versus value which had become so pronounced that – in the near term – an explosive change in trend catching most participants by surprise was pretty much baked into the cake.

Since that day, gold has notched its largest one day up move in two years, palladium has risen $200 an ounce, platinum and silver have penetrated the first layers of resistance, and mining sector ETFs have moved forcefully from their basing platforms.

Does this signify the end of the seven-year metals' bear market stretching back (with the six-month exception in 2016) to mid-2011? And is the bullish case risk/reward profile still compelling?

What follows could be one of the most valuable (and perhaps prescient) series of comments David Morgan has made in recent memory. Concerning the past few weeks' market action of the overall markets in general, and the impact on the precious metals' space in particular, he tells us:

The best way out is always through. Precious metals investors have gone through an extensive "wear you out" phase, in what may prove to be the most important precious metals bull market in the past century.

These words will no doubt be scoffed at during the initial publication of these thoughts. Yet the very few who have gone through this trial of holding a position in the precious metals need to understand that the shift from paper forms of wealth to real forms of wealth has now begun.

Almost everything in today's world is not what "appears" to be true. U.S. Bonds are thought to be the safest investment possible, yet monetary history is clear that there is a 100% failure rate of currency [which has been] issued beyond the markets' capacity to utilize it for productive means.

At that point, rank speculation takes over the markets, and gambling becomes the fashionable way to "invest." Gold has proven through thousands of years to remain a final means of payment, as currencies come and go. This lesson – which is missed by the vast majority – will once again be taught to the world.

A number of charts and comments by market participants could be presented here to bolster the bullish case, but let's just look at two charts from many, plus a comment -- then summarize how you might either add to your metals' holdings, or step up to the plate for the first time and "catch a wave" on what may become a major wealth-creating bull run.

Continuous gold contract - bull continuation hs pattern

The above chart, posted by Stewart Thomson of the Graceland Updates active traders' Letter - to which I have been a paid subscriber for a number of years - speaks eloquently for itself. As wizened traders with decades of experience in the markets like to say, "The bigger the base, the greater the upside case!"

Article source: https://goo.gl/Y57j3L

October 25 2018

moneymetals

How the Midterm Elections Might Affect Gold and Silver

midterm-elections-affect-gold-silver-social.jpg

The outcome of the November 6th voting will be a big deal for investors, including gold and silver bugs. The metals, perhaps more than most other asset classes, are sensitive to geopolitics.

Let’s break down what the potential voting outcomes might mean for the factors currently driving the metals.

Election

Let’s start with the equity markets. Stocks got a boost from President Trump’s election and subsequent tax cuts. Last week, the President floated the idea of additional tax cuts and he wants to pass a major infrastructure spending bill.

Not much of what he wants will get done unless Republicans do well at the ballot box. Republicans retaining control in Congress almost certainly represents the best-case scenario for stock prices.

Perversely for metals investors who favor the President’s policies, a positive outcome for the GOP could negatively impact gold and silver prices, at least in the short run.

Rising stock prices and the pervasive “risk on” attitude on Wall Street limits demand for safe-haven assets. We will need plenty of inflation reaching beyond equity markets and real estate for metals to win in that scenario.

Alternatively, gridlock in Washington based on Democrats winning one or both houses may not be good news for stocks. The metals may get a boost, however.

Full Article: https://goo.gl/7o7QTi

October 15 2018

moneymetals

As The Markets Sell-off The Precious Metals Rebound

To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.

However, even though we could see a late-day rally in the markets, and even higher stock indexes over the next few months, the bear market for stocks is still coming. The Dow Jones Index has now suffered two large sell-offs in the past ten months:

Dow jones - oct. 10, 2018

In January, the Dow Jones Index fell by more 3,000 points, and the current correction is only one-half of that amount. So, I expect to see a continued correction over the next month. Because October is the worst month for market Crashes, this could be one hell of a blow for not only the economy but also, for investor confidence.

For example, according to the Zerohedge article, Used-Car Prices Plunge Most In 15 Years:

CPI - used cars & trucks mom

Looking deeper at the core inflation print, it reflected a 3% monthly drop in prices for used cars and trucks following increases in each of the last 3 months, and the biggest drop in 15 years…

And then, of course, the continued disintegration of the U.S. Retail Market, Sears Creditors Push For Bankruptcy Liquidation As Vendors No Longer Paid:

Amid recent reports that Sears is set to file for bankruptcy as soon as this weekend ahead of a $134 million debt payment due on Monday, the only question is whether the filing will be a Chapter 11 debt for equity reorganization or a Chapter 7 liquidation. And contrary to the desires of Sears CEO and biggest creditor, Eddie Lampert, who would like to preserve the core business, others are pushing for an outright liquidation.

Article Source: https://goo.gl/Ked2FS


October 09 2018

moneymetals

The Federal Reserve’s Rising Interest Rates Are A Ticking Time-bomb For U.S. Economy

One of the worst things for an over-heated and extremely leveraged economy is rising interest rates. So, with the recent 2-2.25% interest rate, big trouble is on the horizon, Also, with higher interest rates, the U.S. Treasury will have to fork out even more money to service its debt. In just a little more than two years, the U.S. Fed Funds Rate jumped by nearly 2%.

This is indeed a big change for the Federal Reserve’s “economic stimulation policy” as it kept interest rates below 0.25% since January 2009. And with extremely low-interest rates, nearly zero, it allowed the United States to more than double domestic oil production. Unfortunately, this newly created oil supply has come at a huge cost. It has created another big mess which I call the U.S. Shale Ponzi Scheme.

But, before I get into details of this article, I wanted to let my readers and followers know that the lack of articles this week was due to a freak storm that impacted our area. We had a mini-tornado or a micro-burst that touched down in our local area which caused a great deal of destruction, mostly to trees and bushes. In a little more than 10 minutes, upwards of 100 mile per hour winds uprooted, snapped and destroyed a large number of trees on our property.

Interestingly, there was only minor damage done to one home in the adjacent neighborhood. The homeowner’s wooden porch and garage tin roof were ripped off, and part of the roof is still hanging 30 feet up in one of our trees. So, I have been quite busy not only cleaning up the mess on my property, but also helping my neighbor. I will say, the good thing that came out of all this destruction is how our neighbors came out together to help out.

So, I apologize for the lack of articles this week. But, I will be posting several articles next week on the interesting changes taking place in the economy and financial system.

Okay, getting back to rising interest rates. The Federal Funds Rate is now 2-2.25%. As we can see in the chart below, it is the highest it has been in nearly a decade:

Effective federal funds rate (chart)

Furthermore, each time the Fed hiked interest rates, a recession (shown in the shaded areas) was the result. When the Fed increased the Funds Rate from 1% in May 2005 to over 5% by 2007, it assisted in the crashing of the mighty U.S. housing bubble and precipitated the investment banking meltdown in 2008.

Continue reading: https://goo.gl/3Ud3qx

Older posts are this way If this message doesn't go away, click anywhere on the page to continue loading posts.
Could not load more posts
Maybe Soup is currently being updated? I'll try again automatically in a few seconds...
Just a second, loading more posts...
You've reached the end.

Don't be the product, buy the product!

Schweinderl