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June 22 2018

moneymetals

Gerald Celente:Why You Still Need Guns, Gold, and a Getaway


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

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

Gerald Celente: Thanks for having me on.

Mike Gleason: Well, Gerald, the potential for a trade war is the hot topic in the financial press these days. Around here, the question is what escalating concerns over trade might mean for the precious metals markets, and we would like to get your thoughts on that. But first, please give us your take on the President's trade policy in general. Some people think the U.S. has been a major beneficiary of trade. We've been able to import real goods and services in exchange for increasingly worthless dollars. Others hate what so-called globalization has done to U.S. manufacturing and think Trump is delivering a long overdue warning shot to nations who have taken advantage of the U.S. So, where do you stand on all this?

Gerald Celente: Well, we've been in the business since 1980. When NAFTA began, actually under Reagan began it trying to push through and Bush Sr., and they couldn't push through much, but Bill Clinton was the one that really brought us into NAFTA and China into the World Trade Organization. So, you just look at the numbers, and the numbers speak for themselves. Before we were in NAFTA, we had basically a neutral exchange in terms of merchandise trade deficit between Mexico and the United States. And now we have a $71 billion deficit. Who would do business like that? Would you do business with someone where you lose $71 billion a year? Then when you look at China ... and we lost by the way about 975,000 manufacturing jobs, and Clinton promised that we would gain 200,000. But I didn't have sex with that woman, Monica Lewinsky, and I smoked but I didn't inhale, so you know the guy's full of it from the beginning and to the end, and he's still a hero.

Then you look at China, what he did bringing them into the World Trade Organization. We lost about 3.5 million jobs, and we have a merchandise trade deficit with them of $375 billion a year. You can't blame Mexico or China or other countries on this. You have to, as we look at it, put the blame on the companies that went overseas to get their products made by cheap labor and then bring them back to the United States and sell them so they could gain greater profits. If you can't have an agreement with workers in your country to pay them a living wage, go to a slave labor country and get them made over there is basically what happened.

For example, 97% of the shoes and clothing that we wear are made overseas. When you go back to the 1990s, that wasn't true. It was being made over here. And then you look at the standard of living and the declines. The facts are all there. A matter of fact, we're right now, our standard of living of real personal income is below 1999 levels. Again, we don't blame anybody other than the ones that did it. China and all these other countries, Vietnam, they didn't have the technology. The Europeans and the Americans gave them the technology to do it. So, they sold us out.

So what Trump is doing with this, as we see it, this is typical Trump's Art of the Deal negotiation strategy that we point out in our Trend Alerts. You take North Korea, for example. He calls the guy Rocket Man, a moron, a maniac, and then after he meets with him, he's an honorable, great guy. The deal is done. He goes to the extremes. And that's what we believe he's doing with the tariff situation, because again, China's only buying about $130 billion worth of our goods. And they're selling us $375 billion. Are they going to kill the deal? Of course not. So, there's going to be a negotiation of this. Bottom line is, Mike, at this level, we don't see a trade war coming yet. It's not in the cards right now.

Mike Gleason: Now, when it comes to the gold and silver markets, the impact of trade policy will, we think, largely depend upon how that policy impacts the U.S. dollar. So far, the foreign exchange markets are reacting as if a potential trade war might be good for the dollar. It has been strengthening relative to other world currencies. Now, we're not so sure the markets have it right. The U.S. may run massive trade deficits on lots of products, but the one product that we export a ton of is the U.S. dollar. Anything that reduces this demand for the greenback overseas is liable to cause some problems, and the dollar is already under attack as the global reserve currency. What do you think? Will these escalating trade conflicts be good or bad for the dollar, and good or bad news for gold?


Read/Listen to the entire podcast here: 

June 08 2018

moneymetals

Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts


Michael pento

Mike Gleason: It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. Michael is a well-known money manager and a fantastic market commentator, and over the past few years, has been a wonderful guest and one of our favorites here on the Money Metals Podcast. We always love getting his highly-studied Austrian economist viewpoint.

Michael, welcome back, and thanks for joining us again.

Michael Pento: Thanks for having me back on, Mike.

Mike Gleason: Well, Michael, we were struck by one statistic in particular in the latest edition of your always great Pentonomics commentary and we urge people to sign up for your email list, so they can start getting those themselves, if they're not doing that already. But in that piece, you referenced Chapter 11 bankruptcy spiking 63% in March versus the same month a year ago. This is a dramatic move, and it tells a very different story than the one people are hearing all day long on CNBC these days. You also mentioned the carnage in the retail sector, rising delinquencies in the subprime auto loans and other indicators, which are back to levels we last saw just before the 2008 financial crisis.

Meanwhile, the talking heads are going on about how strong the U.S. economy is, and to be fair, they can point at statistics such as unemployment, strong performance in the equities, at least until recently, consumer sentiments, and other positive signs. At this point, most Americans think the U.S. economy is in better shape and likely to get stronger, but we know at key turning points in the markets, most people wind up being wrong. Now, you are certainly sounding the alarm here, Michael, so give us your thoughts on the real state of the U.S. economy, and what are a couple of the key indicators, and what are those indicators telling you about what we should expect in the months ahead?

Michael Pento: Well, Mike, first of all, this kind of reminds me a little bit of maybe late 2007, early 2008. And I want to remind all your listeners that the economy entered a recession officially, for NBER rates recessions, in December of 2007. We were already in a recession at the end of 2007, but nobody really knew it. The stock market was still doing okay. And if you look at the metrics, some of the metrics that you quoted in that question still looked very well and fine and dandy, but underneath that ersatz construct, the economy was eroding very quickly. The yield curve had already inverted. Bank lending was drying up. And home prices were already in the process of rolling over. You fast-forward to today, and you can point to many things that will make you think the economy is doing well. You look at the JOLTS, Job Opening Labor Turnover construct. If you look at ISM Manufacturing surveys, we still have some time to go before this recession becomes absolutely, positively manifest.

But here's what's going on underneath. Let me just show you how, and let me try to prove to your listeners and your audience why this particular edifice is built of cards, this economic edifice is going to wash away. Let's just take a couple of things that I want to point out to your audience. In the wake of the Great Recession, it became clear to me that the level of asset prices along with the amount of debt outstanding in the world absolutely mandates that interest rates remain near 0% and never normalize. Otherwise, the entire artificial financial construct falls apart. This is the only thing keeping everything together. So, this is the rubber bands and tape and glue that's keeping Japan solvent, that's keeping the eurozone solvent, that's keeping China any semblance of solvency, and even in the United States.

Let me give you an example of what I'm talking about. If you look at the total value of equities as a percent of GDP, it's now at a record high, very close to 150%. If interest rates move too far off the zero bound, that ratio would close by the denominator, which is GDP, falling, but the numerator, which is asset prices, crashing much, much faster. Let me give you one more example. You touched on it a little bit when you mentioned business debt. Corporate debt as a percentage of GDP is also at a record high. These are nominal records and as a percentage of the economy. And also, the credit quality of that debt is at a record low. As this ratio contracts, what you'll see is GDP contracting again, but corporate debt defaulting in spades, which will manifest into a global recession/depression, which will be marked by rapid deflation. That is the condition of the global economy today. It's held together by artificially low rates, which are now in the process of being removed.

Don't forget, in the United States, QE ended in, I believe, 2014. QE ended. We have raised rates six times. There'll be a seventh rate increase next week. The ECB went from €80 billion per month to €30 billion. They'll probably end that program. We'll find out more next week. They'll probably end that program by the end of this year. And what you have is a condition when you have global debt as 330% of GDP, $230 trillion, up $70 trillion since the Great Recession. Interest rates are going to start to rise, because central banks have the hubris to believe that they solved all of the world's problems. And it is that rising debt, which is going to pop asset prices and pop corporate debt and personal debt and student loans and credit cards and leveraged loans, CLOs, these are all of the things that are going to pop simultaneously. It's going to happen very quickly. And unfortunately, I believe it is going to be much worse, the fallout is going to be much worse, than that of 2009.

Mike Gleason: People listening to this would say, "Well, why do they have to raise rates? Maybe they'll just stand where they are or go with the lower," but obviously there's a credibility factor here that's going to probably prevent them from reversing course, at least talking about the Fed. They've talked about raising interest rates. They're probably going to do it because their credibility is at stake. Isn't that fair to say?


You can find the entire podcast here​

June 06 2018

moneymetals

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

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

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

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


Continue reading here

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

June 04 2018

moneymetals

Money Metals Is the Best Place to Sell Your Metal (Even If We Don’t Think You Should)

We don’t talk about it much, but Money Metals Exchange is literally the best in the nation when it comes to buying precious metals from clients who need to sell. We’ll explain why that is in just a moment. First, however, it’s important to explain why we don’t promote it, despite having several competitive advantages.

We just don’t think most people should be selling metals, at least not now.

Buy, hold, sell

In fact, holding a position in physical bullion is, we believe, more important than ever. Our position on that hasn’t changed, even though the sideways action in the metals markets in recent years has sometimes been frustrating and difficult to watch.

The dollar’s future is more bleak than ever. The U.S. borrows too much, spends too much, and promises too much.

A national bankruptcy is coming and it will destroy confidence, the ephemeral foundation underpinning the Federal Reserve Note dollar.

We believe this is a truth which cannot be avoided, and no amount of price rigging or central economic planning can change it.

That said, it has always been a priority for us to make an honest and fair two-way market for our clients. We’re committed to supporting them whether they need to buy OR sell.

And there are, of course, plenty of good reasons to sell metal. Sometimes folks simply need cash for some other purpose – and gold and silver are highly liquid assets. Or maybe they simply disagree with our take on where the precious metals markets are headed.

So Money Metals has been steadily building tools to make it even easier for sellers as well.

​Continue reading the article on MMX

June 01 2018

moneymetals

Axel Merk Exclusive: Inflation & Precious Metals to Rise, Fed to Act Late

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

Axel merk

Mike Gleason: It is my privilege now to welcome back Axel Merk, President and Chief Investment Officer of Merk Investments and author of the book Sustainable Wealth. Axel is a highly sought after guest at financial conferences and on news outlets throughout the world and it's great to have him back on with us.

Axel, it's a pleasure to have you join us again today and thanks very much for coming on.

Axel Merk: Great to be with you. What a week.

Mike Gleason: Exactly. Well, Axel when we spoke to you in February the equity markets were in the midst of a sell off and some significant volatility, which had been extraordinarily low, came roaring back to life. Since then, the stocks have recovered some. The S&P regained about half of what it lost by the end of February and has been trading in a range since then.

Our thoughts are that precious metals are trading inversely correlated to equities markets, at least for now. Unless we get a pullback in stocks or more appetite for safe-haven assets it will be hard for metals to get much going to the upside. But what are your thoughts on the relationship between gold prices and stock markets, Axel? And what factors do you expect to be driving stocks between now and say the end of the year?

Axel Merk: Sure, and for context I think we should just mention we are talking before the Non-Farm Payroll Reports (are out), so who knows what's happened to markets since we have talked? One of the things I don't recall if I mentioned in February is, ever since last December, and I still believe in that, the markets have been a bit like a washing machine. That correlations have been breaking down. And, if you go back to, kind of, all the way to the financial crisis, that's the 2008 one, not the one from a week ago, that means that whenever there was a crisis the Fed bought treasuries. And so whenever “risk” falls off, when equities are plunging, bonds were rising. And that kind of ingrained this perception about certain types of correlations and so, similarly, the price of gold was actually reasonably highly correlated to that of treasuries. And so we got this thing that gold and the stocks are sometimes moving in tandem, sometimes they move in opposite directions.

Since January 1970, if you look at monthly correlations, the correlations between stocks and bonds is 0.00. So, there is no correlation. Yet, we get caught up in this thing that, for months at a time, sometimes there’s a correlation that is significant. I think the most noteworthy thing of late is that yields have been, until a good week ago, have been matching higher and the price of gold was falling up. And then, conversely, when bond yields were falling, gold didn't rise.

And so, gold has kind of marched on its own in some ways and I happen to believe that a lot of the buyers of gold these days are doing it because they are concerned about the equity markets because of volatility spiking. And the reason why volatility and the price of gold are related is because gold doesn't have cashflow. And that means the future cashflows don't get discounted more, whereas, if you have a quote unquote risk asset, like equities, and volatility increases, those future cashflows get discounted more and the prices of equities, all else equal, tends to fall. So, that's why in “normal” circumstances the price of gold should rise when equities tumble. Obviously, that doesn't always happen.

Mike Gleason: You pay more attention than most people to events in Europe and the European markets. Lately, troubles in the PIGS nations have crept back into the news. Populace in Italy and Spain are making hay by opposing EU imposed austerity and it's a reminder that deep fundamental issues remain and the union may not survive. Let's start by getting your take, if we can, on the overall status of the EU. Will there be any high-profile exits, perhaps by Italy or Spain? Is Great Britain going to complete its exit? Or are you expecting the EU to weather the storm here, Axel​? 


Continue reading (source) ​

May 29 2018

moneymetals

GLOBAL FINANCIAL BREAKDOWN CONTINUES: Economic Growth Chokes On Massive Debt Increases

The U.S. and global economies are choking on a massive amount of debt. While Wall Street and the Mainstream financial media continue to rationalize the skyrocketing debt as merely the cost of doing business, the disintegrating fundamentals point to an economic catastrophe in the making.

Of course, a full-blown economic meltdown may not occur this year or even next, but as time goes by, the situation continues to deteriorate in an exponential fashion. So, the cheerleaders for higher stock, bond, and real estate prices will continue to get their way until the economy is thrown into reverse as decades of increasing debt, leverage and margin finally destroy the engine for good.

Yes, I say for good. What seems to be missing from the analysis is this little thing called energy. The typical economist today looks at the global markets much the same way as a child who is waiting for the tooth fairy to exchange a tooth for a $20 bill. When I was a kid, it was $1 per tooth, but like with everything today, inflation is everywhere.

Mainstream economists just look at market forces, percentages, and values on a piece of paper or computer. When economic activity begins to fall, they try to find the cause and remedy it with a solution. Most of the time, the solutions are found by printing more money, increasing debt, changing interest rates or tax percentages. And… that’s about it.

There is no mention of what to do with energy in the economist’s playbook. For the typical economist, energy is always going to be there and if there are any future problems with supply, then, of course, the price will solve that issue. Due to the fundamental flaw of excluding energy in College economic courses; the entire profession is a complete farce.

Unfortunately, even the more enlightened pupils of the Austrian School of Economics fail to understand the Thermodynamics of value. Instead, we are only taught about SUPPLY & DEMAND to impact price. While supply and demand forces impact price, they only do so over a short period of time. However, the primary factor that determines price (for most goods, services, commodities, metals & energy) is the cost of production. Supply and demand only pull price above or push it below the cost of production trendline.

Regardless, you don’t have to take my word for it, just look at the following charts below.


Continue reading (source

May 04 2018

moneymetals

Greg Weldon: Stock Market "As Overextended as Anything I’ve Ever Seen" Audio Player

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 experiencing, specializing in the metals and commodity markets and even authored a book in 2006 titled, Gold Trading Boot Camp where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce. He's a highly sought-after presenter at financial conferences throughout the country and is a regular guest on many popular financial shows, and it's great to have him back here on the Money Metals Podcast.

Greg, good to talk to you again today and thanks for coming on.

Greg Weldon: Thanks, Mike. My pleasure.

Mike Gleason: When we spoke to you last back in February, Greg, we talked about the U.S. dollar. It had been sliding for more than a year and looked weak. Since early April, however, the greenback has been rallying hard. The move has been weighing on gold and silver prices over the past couple of weeks. What is your take on the dollar's recent move higher? What's driving it? Do you think it has further to climb or is this a bit of a sucker's rally?

Greg Weldon: Well, how about all of the above? I think that it's a corrective move first of all. I see an upside push maybe towards 96 would be kind of a target for a rally here in the dollar. I think the secular pressure on the dollar remains in full force, and that is Twin Towers deficits particularly the deepening U.S. budget deficit, how that links into first of all the tax cuts of course, but really more significantly, the rise in interest cost. So you're kind of in this cycle here where higher interest costs beget higher debt which begets deeper deficits which begets higher interest costs, so on and so forth.

I think longer term by the end of the year we're probably looking at a lower dollar, but having said that I think last week gave us a really good kind of example as to why the dollar has pushed higher here, and it really kind of only broke out in the last few days. And I think that's on the back of the downside reversal you have going on in some of the European bond markets after Mario Draghi's press conference last Thursday. I thought it was very interesting the comments that he made, particularly about, "We don't see signs of sustained inflation. We see a moderating in the economy. That moderating is sharp, it's broad, although we believe it's temporary."

So, the thought process had been that maybe the ECB, once the end of September came and the QE kind of taper, ran down that they might actually tap out from QE. And as a preparation for raising interest rates next year, something that is still priced into the futures market in the Euro Board deposit rate futures, but less so than it had been. And I think the key here of course is inflation. I think inflation is going to be rising throughout the rest of the year. We talked about this earlier in the year, the end of last year in our January year ahead piece and we targeted the May to June period for this to start to really show up in the data. And I think we're going to see that in terms of energy prices.

And then the wild card, which is the Ag markets and food prices, which we see on the rise as well, particularly as it relates to the U.S. grain crops and some of the stuff that we can talk about maybe in a minute. But I think that in that context, thinking that European bond yields are going to break down further from here seems unrealistic unless in fact the ECB is going to re expand QE, something that Mario Draghi floated on Thursday. So I think that really caught the market by surprise. It really hurt the euro, boosted the dollar, but I think to suggest that the German two-year can get back below -60 basis points at a time when German GDP growth is three percent, and German inflation is 1.6 and likely to rise. I mean, not only is it a negative 60 basis point two-year in Germany, think about the real yields you're talking about here. They're so deeply negative.

We saw the same thing in the U.S. really in September when then chair Janet Yellen suggested they wanted to not normalize rates, but go to neutral, which meant to lift the bond market, particularly in the short end, which was wildly overpriced because of QE to the level of inflation. And that's what we've seen in the two-year note. It went from 140 when she made these comments in September of last year to where it is now at 250, which is a new high. So, in the context of the rising ECI, the rising wages in the U.S. ... and let's not forget, and one point I'll make without making this answer too long ... If you look at the U.S. Employment Report from last month, all the talk was about hourly earnings being subdued and not rising. The fact of the matter is a lot of the Fed reports show us, tell us very clearly that firms looking for skilled workers, having difficulty finding skilled workers, are now extending the hours of their current workers. So, if you're not making more per hour, but you're working longer hours, you're still making more money.

So the weekly earnings from the Employment Report were at 3.3. You got import prices of 3.6, and now you got from the ECI private sector wages are around 3. So you see some movement here in the U.S. that boosts the two-year to two and a half, at the same time the German two-year is falling and thus the yield differentials kind of come back into vogue as a driving force in the dollar. But I think that the decline in European bond yields will be short-lived and I think you'll see a reemergence of an upside push, particularly in Germany. And that's probably something that will add to pressure on the dollar later in the year along with a continued deficit widening story.

Mike Gleason: Greg, those of us who question whether or not the Fed can get away with raising rates, look at the months ahead as sort of a moment of truth if "normalizing" interest rates means that treasury yields are headed back to four to five percent. You've got to think that it will just crush the federal budget and the U.S. economy, which is addicted to ultra-low rates as we all know will in our view have to endure some painful withdrawal symptoms. And now on the one hand, the Fed has hiked rates several times seemingly without major repercussions. On the other, volatility is creeping back into the equity markets and the indexes have fallen since their highs in late January. Mortgage rates have moved higher. So we're very curious about how this will play out and wanted to get your thoughts. Is the Fed going to be able to stay the course and double the Fed funds rate over the next 24 months here, Greg? Or are the markets and the economy at large going to rebel and force officials at the Fed to abandon their plans for tightening?

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

April 25 2018

moneymetals

House Monetary Policy Committee Member Questions Treasury and Fed about Their Gold Activities

Washington, DC (April 25th, 2018) – A Member of Congress posed some pointed questions to the Federal Reserve and the U.S. Treasury this week about their activities involving America’s gold reserves, including, apparently, efforts to “drive gold out of the world financial system in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.”

In a letter dated April 24, Representative Alex Mooney (R-WV) wrote to Jerome Powell, Chairman of the Federal Reserve, and Steven Mnuchin, Secretary of the U.S. Treasury, raising concerns about their formal policy to devalue the Federal Reserve Note (e.g. “inflation targeting”) and requesting information about the United States’ use of, and position on, gold.

“The purchasing power of our currency has fallen some 97% since Congress passed the Federal Reserve Act in 1913, with an acceleration in the rate of decline occurring since the early 1970s when the final link to gold was severed,” wrote Mooney while also pointing out there had been almost no inflation in the U.S. prior to the creation of the Federal Reserve System.

“This Fed policy of creating inflation has the effect of driving up the cost of virtually everything my West Virginia constituents consume, while simultaneously reducing the real value of their pensions, savings, and fixed income payments,” Mooney continued.

Check out the full press release here: (source

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).

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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

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