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April 20 2018

moneymetals

Jim Rickards Forecasts New Financial Crisis & Makes Prediction About Gold

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

Jim rickards

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

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

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

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

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

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

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

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

March 19 2018

moneymetals

Larry Kudlow Toes Wall Street’s Anti-Gold Company Line

Gary Cohn resigned as President Donald Trump’s Chief Economic Advisor on March 6th. He and Trump didn’t see eye to eye on the recently imposed tariffs and the President selected CNBC commentator Larry Kudlow to replace him Wednesday. Perhaps it was Kudlow’s experience on television that got him the job.

Larry kudlow

It doesn’t look like he was chosen for his intellectual honesty. Kudlow was quite vocal with his own opposition to tariffs.

He has suddenly done an about face and now says he can “live” with targeted tariffs. However, it gets worse than simply flip-flopping on trade.

In one of his very first interviews after accepting the post, Kudlow offered this bit of advice to investors: “I would buy King Dollar and I would sell gold.”

The dollar went on a dramatic losing streak during Trump’s first year in office – one of its worst annual performances in decades. Of course, that is just a single year.

The fiat dollar has been in almost continual decline versus real assets since the Federal Reserve’s establishment 105 years ago. It has lost 98.5% of its purchasing power relative to gold since then.

Kudlow must have seen the forecasts which show federal deficits spiking higher as the combination of tax cuts and higher spending wreak havoc on the budget. The tariffs should further weigh on the U.S. dollar as higher steel and aluminum prices drive inflation.




Continue reading...(here)

March 12 2018

moneymetals

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

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

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

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

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

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

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

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

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

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



Continue to the article (source

February 15 2018

moneymetals

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

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

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


U.S. debt increased 175 billion feb 2018

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


Continue reading... (source)

February 12 2018

moneymetals

Reckless Deficit Spending by Congress Set to Wreck the Dollar

U.S. equities got a free ride on the Trump train after his election, even as Federal Reserve officials hiked interest rates. That ride may have ended last week.

Hiked rates

If commentators are correct and the blame for recent selling in the stock market falls on the burgeoning fear of rising interest rates, it looks like Fed tightening is finally having the effect many predicted when the cycle began.

Most currently expect the FOMC to continue with hikes at about the same pace set in 2017. They have gotten away with several hikes, but attempting several more will be harder for them.

The question is whether the Fed’s tolerance for pain is any higher under new chairman Jerome Powell. We’d wager that it won’t take much in the way of flagging stock prices and slowing growth to have them reversing course and punching the stimulus button.

No one should bet that last week’s rally in the dollar means the bottom is in. The next few years look downright terrifying for the greenback. Here are some factors to consider:

  • Congressional Republicans embarrassed themselves last week by proving the lip service they pay toward fiscal conservatism is nothing but lies. The Republican leadership shepherded through $300 billion in additional spending. Furthermore, they once again completely suspended the limit on borrowing;
  • The Treasury will be issuing staggering amounts of new debt to fund the Congressional spending spree. Last fall’s tax cut may be good news for taxpayers, but it will also magnify federal deficits. Net new debt in 2018 is expected to be $1.3 trillion – the highest since 2010!
  • President Trump will soon begin the push for a trillion-dollar infrastructure program. That will almost certainly be paid for with additional borrowing.
  • The creditworthiness of the U.S. is once again back in the news. Rating agency Moody’s raised the idea of a downgrade for U.S. debt last week.

​Continue reading (source)​

January 30 2018

moneymetals

Illinois’ Debt Crisis Foreshadows America’s Financial Future

Those wanting a glimpse into the future of our federal government’s finances should have a gander at Illinois. The state recently “resolved” a high-profile battle over its budget. Taxpayers were clubbed with a 32% hike in income taxes in an effort to shore up massive underfunding in public employee pensions, among other deficiencies.

But, predictably, it isn’t working. People are leaving the state in droves.

Illinois the land of debt

In fact, Illinois now leads the nation in population collapse. Statistics show people leaving the state at the rate of 1 every 4.3 minutes and the state dropped from 5th place to 6th in terms of overall population.

Turns out that people with options aren’t planning to stand there and take the epic tax increase.

Illinois officials’ hands are tied. Decades ago, public employee unions successfully lobbied for an amendment to the state constitution which prevents cuts to pensions. The taxpayers are hostages.

Illinois officials are instead considering one final gambit, one well-tried by many insolvent governments through history. They will address the problem of too much debt by borrowing even more money. Specifically the plan under review calls for selling $107 billion in debt in the largest ever municipal bond offering.

Worse, the state would use the borrowed funds to invest in financial markets. The state would purchase stocks and other securities near their all-time highs.

The Illinois credit rating has suffered in recent years, so borrowing costs will be higher. That means the state will need to take on even greater levels of risk to generate returns. What could go wrong?

Illinois is demonstrating a universal truth which certainly still applies at the national level. Governments do not voluntarily shrink. They grow until they can no longer be sustained. Then they get desperate – just before the default.

(Original Source)


January 16 2018

moneymetals

Swamp Lives On: Crooked Banks and Captured Regulators

If officials at the Securities and Exchange Commission (SEC) are bothered by allegations of incompetence and capture by Wall Street’s bankers, it is hard to tell. The Commission recently hired Brett Redfearn to serve as Director of the Division of Trading and Markets. Redfearn left a 13 year stint at JP Morgan to assume a key role in regulating banks, investors and traders.

The SEC, and other regulators such as the CFTC and the Federal Reserve, aren’t worried about appearances. Redfearn looks like yet another fox being sent to guard the henhouse. His appointment undermines confidence even if he intends to serve with integrity.

Instilling confidence ought to be a priority at the SEC. The past decade has been a disaster when it comes to the agency’s credibility.

U.S. securities and exchange commission seal

To date, not one high level bank executive, has been prosecuted for misdeeds related to the 2008 Financial Crisis. This despite plenty of the shareholders SEC officials are supposed to be protecting having lost their shirts. SEC bureaucrats either bungled or turned a blind eye to Bernie Madoff’s Ponzi scheme.

To cap it off, a high-profile story which broke in 2010 uncovered agency staff and contractors spending an inordinate amount of time watching pornography on the job.

Continue reading (source)

January 12 2018

moneymetals

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

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

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

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

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

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

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

​Continue reading (source) ​

January 05 2018

moneymetals

Gordon Chang: Blowup w/ China or North Korea Could Change Almost Everything Overnight

Without further delay, let's get right to this week's exclusive interview. 

Gordon chang

Mike Gleason: It is my privilege now to welcome in Gordon Chang, author, television pundit, and columnist at the Daily Beast. Gordon is a frequent guest on Fox News, CNBC, and CNN, among others, and is one of the foremost experts on Asian economics and geopolitics, having written books on the subject and it's great to have him back on with us.

Gordon, it's a real honor to have you on again, and thanks so much for your time today. I know it's been a busy week for you given all of your media appearances, and we're grateful that you could join us today. How are you?

Gordon Chang: I'm fine, thank you, and thank you so much, Mike. I really appreciate the opportunity.

Mike Gleason: Well, there are many things to cover here given all that's going on right now. We certainly appreciate your expertise, particularly when it comes to the developments in Asia. There's a lot going on in that part of the world with big implications for investors. Let's start with North Korea. That's obviously been at the forefront of the news this week with tensions getting ratcheted up again.

Kim Jong-Un and President Trump are both bragging about their nuclear arsenals. The over the top posturing on both sides makes it hard to gauge just how seriously the threat of nuclear exchange should be taken. The market seems to have stopped paying attention for the most part. Please give us your thoughts on the matter. Is there any likelihood the disagreement over North Korea's nuclear weapons program will escalate beyond words, Gordon, or is this war only going to be fought on Twitter?

Gordon Chang: If you look at Twitter, this certainly is a matter of concern, but I think the reality is much different. Right now, Kim Jong-Un, the ruler of North Korea, is feeling sanctions. We saw a hint of that in his New Year's address where he referenced it, at least indirectly, and at one point he actually called the sanctions an existential threat.

What he's trying to do right now with his overture to South Korea is to get the South Koreans to shovel money into his regime. What he would like in return for sending two figure skates to the winter Olympics in South Korea next month would be for South Korea to lift sanctions to resume inter-Korean projects, like the Kaesong Industrial Complex, and also for more North and South Korean aid.

I don't think that those expectations are realistic. Some of what he wants would be a violation of UN sanctions, and President Trump's policy has been to cut off the flow of money to Pyongyang so it can't launch missiles or detonate nukes. This is going into, I think, a very crucial period, because if you look back in history, and I'm talking seven decades, we have seen North Korea engage in military provocations shortly after making peace overtures. And this whole concept of the Olympics and his opening of dialog with South Korea, that's a peace overture.

Mike Gleason: We've got two huge wild cards at the forefront of all this with President Trump and Kim Jong-Un being rather unpredictable, to say the least. Is Trump's tit-for-tat responses to his adversary here going to make diplomacy harder to achieve as our allies might have a hard time joining in full force to combat the North Korean threat?

Listen/Read the entire podcast here: (source)

December 26 2017

moneymetals

Trump’s Tax Cuts: The Good, The Bad, and the Inflationary

At last, tax reform is happening! Last week, President Donald Trump celebrated the passage of the most important legislation so far of his presidency.

The final bill falls far short of the “file on a postcard” promise of Trump’s campaign. It even falls short of the bill trotted out by Congressional Republicans just a few weeks ago. It is, nevertheless, the most significant tax overhaul in more than a decade.

Corporations and most individual taxpayers will see lower overall rates. That’s the good news.

Unfortunately, there is also some not so good news investors need to be aware of.

Because no spending cuts will be attached to “pay” for the tax rate reductions, the legislation will grow the budget deficit by an estimated $1 trillion to $1.5 trillion over the next decade. The actual number could end up being smaller…or bigger, depending on how the economy performs. But more red ink will spill.

The GOP tax bill is effectively a debt-financed stimulus package. It will boost economic growth in the near term while saddling taxpayers with larger long-term debt burdens.

“Even if we get the kind of growth we hope to get,” admitted GOP House Speaker Paul Ryan, “You cannot grow your way out of the entitlement problem we have coming.”

He’s referring to tens of trillions of dollars in unfunded Social Security and Medicare obligations. They are all but politically impossible to tackle, except through the voodoo of new debt and currency creation that will keep benefits flowing with devalued dollars (i.e., inflation).

​Continue reading... (source)​


December 20 2017

moneymetals

Be a Precious Metals' Winner with a Mind Like Water

We're in the midst of a massive, transformational change that will redefine where we are, what we think is true, and where we believe the future is headed.

With sensory input from across the political and economic spectrum of the Internet bombarding us 24/7, it's understandably difficult to follow through on a decision once made, even if you've researched carefully and thought things through beforehand.

Nowhere is this more difficult right now than the decision of whether or not to invest in – or add to – one's position in the physical gold and silver space.

Not only that, but when you add all the noisy arguments from competing investments which seem to be doing much better while the precious metals slumber, it's understandable why some long-term information-overloaded investors have decided to sell their metal.

I'd like to suggest that those who hesitate to buy, or worse, decide to sell what they already have are going to experience considerable remorse – and soon.

A potent way to avoid such a struggle and stick with your original decision is to practice developing mizu no kokoro – Japanese for a "mind like water."

In this state, thinking is minimized, listening/watching emphasized. To get an idea of the clarity that can be achieved, look at the picture below.

I took this photo during a rare moment when all the elements necessary to build such a scene were present. The water is dead calm; the sky is so full of more-or-less stationary cloud formations that it's difficult to see where one begins and the other ends. At the same time, nothing is distorted. The glassy water "mirrors" the clouds exactly as they look in the sky.

Mind like water

Being in the moment mostly involves paying attention.

There's a lot to be said for "planning your work"; then "working your plan." At some point you've taken your position and set aside money to buy more metal, either at certain intervals or into declining prices.

Then just let things be. Try not to be swayed by counter opinions, even if they seem to make sense. If this is difficult, don't feel so bad about it. Even the investing greats have to remind themselves from time to time.

​Continue reading here: (source)

November 21 2017

moneymetals

Will the Tax Reform Debate Impact Precious Metals?

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

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

Taxes

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

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

Source

October 27 2017

moneymetals

October 24 2017

moneymetals

Trump May Reappoint Yellen as Fed Chair after All

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

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

Janet yellen

Trump may reappoint UC Berkeley
Janet Yellen

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

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

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

Continue to the full article (source

October 11 2017

moneymetals

STUNNING U.S. GOVERNMENT DEBT INCREASE IN PAST FEW DAYS... While No One Noticed


As the stock market continues to rise on the back of some of the worst geopolitical, financial, and domestic news, the U.S. Treasury has been quietly increasing the amount of government debt, with virtually no coverage by the Mainstream or Alternative Media. So, how much has the U.S. debt increased in the past few days? A bunch.

The surge in U.S. debt that took place over the past two days all started when the debt ceiling limit was officially allowed to increase on Sept 8th. In just one day, the U.S. Treasury increased the public debt by $318 billion:

Debt increase september 8, 2017

(chart courtesy of TreasuryDirect.gov)

The was the first time in U.S. history that the public debt rose over $20 trillion. I mentioned this in my article, The U.S. Government Massive ONE-DAY Debt Increase Impact On Interest Expense & Silver ETF:

The U.S. Treasury will have to pay out an additional $7 billion interest payment for the extra $318 billion in debt it increased in just one day. Again, that $7 billion interest payment is based on an average 2.2% rate multiplied by the $318 billion in debt. Now, if we compare the additional $7 billion of U.S. interest expense to the total value of the silver SLV ETF of $5.8 billion, we can plainly see that printing money, and increasing debt becomes a valuable tool for Central Banks to cap the silver price.

Thus, when the U.S. Treasury increased the public debt by $318 billion, it will also have to pay an additional $7 billion in an annual interest payment to finance that debt. However, that large one-day debt increase was over three weeks ago. What’s been going on at the U.S. Treasury since then? Let’s just say; they have been very busy… LOL.

On the last update in September, the U.S. Treasury increased the debt by nearly $40 billion on the very last day of the month:

Debt increase september 2017

(chart courtesy of TreasuryDirect.gov)

As we can see, the U.S. public debt increased from $20,203 billion ($20.203 trillion) on Sept. 28th to $20,245 billion on Sept 29th. Overall, the U.S. debt increased $83 billion more since the $318 billion one-day increase on Sept 8th. Which means, the total debt increase was $400 billion in a little more than three weeks. However, the U.S. Government must be making up for lost time when the debt ceiling was frozen from March 15th to Sept 7th.


​Continue to the full article. (Source)​

October 05 2017

moneymetals

Rep. Seeks to Restore Mining After Last-Minute Obama Ban

Inline image 1

(Emily Larsen, Liberty Headlines) Following mining pushback from environmental groups and hasty actions in the final weeks of the Obama administration, Rep. Tom Emmer (R-Minn.) introduced the Minnesota Economic Rights (MINER) in the Superior National Forests Act, which aims to restore mineral rights in attempt to boost the economy in the northern part of his state.

Tom emmer/image: youtube

Tom Emmer/IMAGE: YouTube

The bill is a response to ongoing controversy regarding mining lease applications near the Boundary Waters Canoe Area Wilderness, close to the border of Canada. About 250,000 outdoor enthusiasts visit the 1.1 million-acre wilderness area each year.

“In their final hours, the Obama Administration enacted a series of harmful and reckless policies, which have hindered our ability to utilize our state’s abundance of natural resources and bring jobs to a part of our state that badly needs them,” said Emmer in a press release.

One of the final actions of the Obama administration in December was to reject a company’s request to renew a mining lease next to the Boundary Waters Canoe Area Wilderness, and placed a two-year mining ban on 234,000 acres of public land. The MINER Act would require approval from Congress to prohibit mining on federal lands.

“The Boundary Waters is a natural treasure, special to the 150,000 who canoe, fish, and recreate there each year, and is the economic life blood to local business that depend on a pristine natural resource,” saidformer Agriculture Secretary Tom Vilsack and former Interior Secretary Sally Jewell in a joint statement at the time of the denial. “I have asked Interior to take a time out, conduct a careful environmental analysis and engage the public on whether future mining should be authorized on any federal land next door to the Boundary Waters.”

Twin Metals Minnesota, a mining company at the center of the controversy, holds two expired mineral leases on the area, on Forest Service-controlled land and Bureau of Land Management-controlled underground minerals. The mining leases date back to 1966, before the federal government established safety and environmental review standards which now apply to mining lease locations. Twin Metals applied for the lease renewal in 2012.

A different mining company, PolyMet Mining, applied for a new copper-nickel sulfide mining permit near the wilderness area. PolyMet’s proposed mine faces environmental backlash as well. The Center for Biological Diversity and Earthworks filed a lawsuit against the US Fish and Wildlife Service and the US Forest Service, claiming the approval of the mine violates the Endangered Species Act.

The MINER Act explicitly prohibits mineral leases within the Boundary Waters Wilderness. But even though the mines aren’t within the protected wildness, environmental groups argue that any spills of toxic chemicals from sulfur-ore mining in the area could contaminate the 1,200 miles of streams within the Boundary Waters Wilderness. Sulfur-ore mining would be new to the part of the state.

The MINER Act would also limit the extension or establishment of national monuments in Minnesota without an action of Congress. It is a possibility that environmentalists lobby to extend the protected wilderness area to include the areas of proposed mines. The Obama administration designated more national monuments than George W. Bush and Bill Clinton combined.

Residents of Northern Minnesota hope the new proposed mines will help improve the economy.

“Jobs for Minnesotans fully supports this legislation which provides hope and opportunity to Minnesota’s mining region,” said Nancy Norr, chairwoman of the group, at a House Natural Resources Committee hearing in July.

Jason George, Legislative and Special Projects Director of the International Union of Operating Engineers Local 49, also expressed support for Emmer’s actions to restore mineral rights.

“It is time that environmental extremists and Washington bureaucrats stop telling the good people of the Iron Range what is best for them,” said George.

Article Source

September 25 2017

moneymetals

U.S. Retirement Market Ponzi Fueled By Record Concentration In Stocks By Young Americans

For the U.S. Retirement Market Ponzi Scheme to continue, there must be a new group of suckers to pay for the individuals who are receiving benefits. Without a new flow of funds, the Ponzi Scheme comes crashing down. Such was the case for the individuals who invested in the $65 billion Bernie Madoff Ponzi Scheme that came crashing down in 2008.

Interestingly, the U.S. Securities & Exchange Commission (SEC) that investigated Madoff Securities in 1999, 2000, 2004, 2005, and 2006, found no evidence of fraud or the need for legal action by the commission. The failure of the SEC to find any wrong-doing by Bernie Madoff should provide Americans with plenty of reassurance and confidence that their 401k’s are the highest quality sound investments in the market.

Regardless, the concentration in equities by young Americans reached a record high since the 2008 financial crisis. According to the most recent data put out by the Investment Company Insititute (ICI), Americans in their twenties who participated in 401k plans, 75% of the group invested more than 80% of their funds into equities in 2015 versus 48% of the group in 2007:

Exposure to equities among 401(k) participants (80+% invested in equities)

In just eight years, Americans in the 20’s age group invested in 401k’s, increased their equity exposure (80+%) from less than a half to three-quarters. Furthermore, those in the 30’s age group increased their equity concentration from 55% to 70% in the same period.

All this means is that younger Americans participating in the 401k Retirement Market have considerably increased their exposure to stocks while net benefits paid out have now gone into the red. I wrote about this in my article, Something Big, Bad and Ugly Is Taking Place In The U.S. Retirement Market:

U.S. private dc plans: contributions vs benefits paid

As we can see in the chart, the Private Defined Contribution (DC) Plans paid out $28.7 billion more than they took in in 2014…. the last year the Investment Company Institute provided data. Simply, Private DC Plans are mostly 401K’s.

Unfortunately, the ICI only has data on 401k net benefit withdrawals up until 2014. However, young Americans invested in the 401k Market have no idea that their funds are being used to pay off those who are retired. Moreover, the record concentration of 20-30’s age group into equities hasn’t been enough to support the 401k Retirement Market as more money is going out than is coming in. That is extremely bad news.

Continue reading: (Source)


September 18 2017

moneymetals

September 12 2017

moneymetals

Trump Suggests Eliminating the Debt Ceiling – Dollar Falls

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

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

Debt ceiling

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

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

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

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

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

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

September 07 2017

moneymetals

Debt Ceiling Capitulation Spells Trouble Ahead for the Dollar

“Frustration” no longer adequately describes what reformers in Congress – along with millions of investors and taxpayers who voted for reform – are feeling. For many, hopelessness is beginning to set in on the prospects for tax, budgetary, and monetary reform following Wednesday’s GOP capitulation on the debt ceiling.

Democrats shamelessly exploited the Hurricane Harvey disaster to couple the $7.85 billion disaster aid package with demands on unrelated issues in the budget. Congress didn’t pay for the bill with offsetting spending cuts, as the Club for Growth and other fiscal conservatives had urged.

U.S. dollar chart - september 6, 2017

Instead, this emergency spending (and more to come) will simply be added to the national credit card.

If there’s any fiscal upshot, it could be for those holding contra-dollar investments such as precious metals. The U.S. Dollar Index has been in a downtrend all year. It may now have impetus to fall further.

Months of legislative failure and inaction have caught up with Republicans. A recent Fox News poll shows that only 15% of voters approve of the job Congress is doing. Now – faced with a disaster in Texas and another one on the way in Florida that could inflict hundreds of billions of dollars more in damage – Republicans are being pushed by circumstances beyond their control.

Their president has all but given up on them. He is, understandably, beyond frustrated with feckless Republican leadership on Capitol Hill.

House Speaker Paul Ryan and Senate spoiler vote John McCain have seemingly devoted more effort to publicly criticizing President Donald Trump’s choices of words than passing GOP legislation.

This week, President Trump foisted the “DACA” immigration issue upon a Congress that doesn’t want to have to deal with it on top of everything else now on their capitulation schedule for the rest of the year.

Trump’s abrupt move left Americans confused as to what he wants Congress to do with President Obama’s illegal DACA amnesty directive. Trump had campaigned against it. Now apparently he wants DACA “legalized” in some form.

Trump Joins with Democrats on Debt Ceiling Extension

Perhaps Trump now sees reaching out to Democrats as his only viable political path forward. On Wednesday, according to Politico, Trump “turned on Republican leaders in Congress when he caved to Democrats’ demands to raise the debt limit and fund the government for three months, setting up a brutal year-end fiscal cliff.”

The three-month extension could give conservatives another shot at attaching reforms to the next funding bill. But so far Republicans have been outmaneuvered at every turn by Democrats and the forces of more spending and more debt.

President Trump’s decisions on Federal Reserve appointments in the months ahead will be critical. They will majorly help determine the outlook for interest rates and the value of the Federal Reserve Note, commonly thought of as the U.S. dollar. 

Continue to the full article: (Original Source)

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