Silver is Headed for the Moon, Watch Out Says Bubba

Silver prices are in for a bid if key levels are broken, this according to Todd Horwitz, chief strategist of Bubba Trading. 

“Silver has caught a bid and it looks like it wants to go higher. If this breakout can continue, we can clear $16 or $16.20 [an ounce], then I think we’re on our way to $17 and then if we can get through there, then I think you’re on your way to $20,” Horwitz told Kitco News.

- Source, Kitco News

China Dumps Treasuries, Buys Gold For Seventh Straight Month

The trade war with China continues on, with seemingly no end in sight.

Tensions remain high, with neither party willing to back down from the fight and unfortunately for many parties involved, it appears that the thought of a quick resolution has long ago been cast aside.

President Trump cannot and will not back down from this fight. 

In his eyes and those who support him, his hard headed attitude has won him a number of concessions in recent trade war bouts, even if it has come at a cost to certain companies and individuals, and he is not going to change his "winning" formula.

US farmers have taken the brunt of the damage domestically, having to be bailed out by the United States government repeatedly.

Iowa farmers, who have taken tremendous losses, just recently received approximately $1 billion in relief funds, that is intended to help them mitigate some of the damage these ongoing disputes have caused.

The pain and suffering are likely to continue on for years to come, and thus, you can expect the bailouts for US farmers hit the hardest to continue on as well, until they can appropriately adjust their business models to the new economic reality they find themselves in.

However, who has been hit the most is undoubtedly China, as businesses have been migrating their factories and thus production to the country for countless years, ballooning and swelling their economy, resulting in staggering economic growth.

Yet, this is starting to change, as businesses who have off-shored their production are also starting to feel the pinch of President Trumps roughly $250 billion worth of tariffs and are starting to make the required changes to circumvent these new taxes.

This is resulting in some companies redesigning their products to get around tariff laws, mislabeling items, or even outright moving production out of the country entirely.

Global News reports;

"Consider Xcel Brands, a New York-based company that owns such brands as Halston, Isaac Mizrahi and C. Wonder. Two years ago, it made all its clothing in China. 

Now it’s on the move — diversifying production to Vietnam, Cambodia, Bangladesh and Canada and considering Mexico and Central America as well. By next year, it expects to have left China completely."

These trade wars are undoubtedly one of the major reasons why China's GDP has continued to tick lower, albeit still at at enviously high growth rate of 6.2%.

Upon learning of this slowdown, President Trump took to twitter to claim victory, however preemptive it may be;

“China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. 

This is why China wants to make a deal with the U.S., and wishes it had not broken the original deal in the first place. In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!”

Still, if you think that China is going to take this lying down and that there are not going to be consequences then you would be horribly mistaken.

China continues to play the long game, knowing that they ultimately are going to be the most hurt throughout these trade wars, as they have built an entire economy on supplying goods to both the United States and Europe, the latter of which is also slowing down their demand for Chinese goods.

This puts China between a rock and a hard place and the best weapon they have is debt.

China has accumulated a monstrous amount of US Treasuries over the years, assisting greatly in the rapid accumulation of US national debt, which now stands at a staggering $22 trillion and growing.

Choosing to punch back, China has been dumping some of the US Treasuries that they have accumulated throughout the years, accelerating their deleveraging with each passing month.

In April alone, China shed $7.5 billion in Treasuries, according to the US Treasury Department, bringing their total holdings down to $1.1 trillion.

However, this is just what we know, as China is notorious for not disclosing all of their financial information, shrouding much of what they do in mystery and funnelling funds through alternative routes.

While at the same time China has been very open about where they prefer to park some of these newly liquidated funds, gold bullion.

Increasing their holdings for seven straight months, China added another hefty purchase to their gold reserves in June, 10.3 tons. 

This results in an increase of 74 tons over the same period of time, proving that this is not a "one off" and that they are dead serious on their long term strategy of dollar deleveraging and gold accumulation.

Regardless of whether or not the trade wars continue on for the foreseeable future, I believe that there is no going back from this strategy and that China, along with other countries such as Russia are going to continue to shed US dollars and buy gold.

This is going to create a floor in the physical price of gold, eventually overwhelming the fiat paper gold markets that are horrendously over-leveraged and thus destined to implode as physical demand becomes too much for it to bear.

I believe that this underpinning in the gold bullion markets is just one of the many reasons why we have seen such strength recently and is why I believe that over the next few years we are going to continue to see higher and higher prices, retesting and inevitably breaking through the old highs.

- As first seen on the Sprott Money Blog

Bitcoin Officially Declared a Currency: What's Next for GOLD?

Gold market insider and proprietary analyst Rob Kirby returns to Reluctant Preppers to answer YOUR questions about what's next for Gold, Silver, Cryptos, the Fed, free elections, and the financial collapse!

- Source, Reluctant Preppers

This is One of the Biggest Market Risks That Nobody’s Talking About...

A recession is a natural part of the business cycle, and policy makers should not be artificially propping up the economy, said Jeff Tomasulo, founder and CEO of Vespula Capital. 

“My view on it, and this has been my view for the last nine years, is that I don’t want a market manipulator in there. 

I don’t want the Fed to get as involved as they are, I want a recession to happen. I want the market cycles to come back the way market cycles should come back which is free markets. 

Let the market figure it out itself,” Tomasulo told Kitco News.

- Source, Kitco News

Retail Inferno: 12,000 US Stores Are Forecast To Close In 2019

The retail inferno is escalating in 2019.

According to Coresight Research,  in the US, year-to-date announced closures have already exceeded the total we recorded for the full year 2018. Coresight Research estimates announced US store closures could reach 12,000 by the end of 2019.

So far this year, US retailers have announced 7,062 store closures and 3,017 store openings. This compares to 5,864 closures and 3,258 openings for the full year 2018.

Here is Coresight’s complete list of store closures so far for this year:

Payless ShoeSource: 2,589 (includes 248 Canada locations and 114 smaller-format stores in Shopko Hometown locations).

Gymboree/Crazy 8: 749

Dressbarn: 649. Here are the locations that closed in June and closing in July.

Charlotte Russe: 494; but the company’s new owner is opening new stores.

Shopko: 371

Charming Charlie: 261

LifeWay Christian Resources: 170

Topshop: All 11 U.S. stores

Henri Bendel: 23

E.L.F. Beauty: 22

Here are more announced closures that could roll into 2020:

Family Dollar: As many as 390 stores

Fred’s: 442; the company said it would close another 129 stores with going-out-of-business sales beginning Friday.

Chico’s: 74, but 250 over the next three years.

GNC: 233

Gap: Roughly 230 in next two years

Walgreens: 195

Foot Locker: 165, total includes closings outside of the U.S.

Signet Jewelers: The parent company of Kay, Zales and Jared said it would close another 150 stores.

Pier 1 Imports: 57, but up to 145 could close.

Ascena Retail: 120

Destination Maternity: 117

Sears: 72

Victoria’s Secret: 53

Vera Bradley: 50

Office Depot: 50

Kmart: 48

CVS: 46

Party City: 45

Sears Hometown and Outlet Stores: 45

The Children’s Place: Up to 45

Z Gallerie: 44

DKNY: 41

Stage Stores: 40 to 60

Bed Bath & Beyond: 40

Abercrombie & Fitch: 40

Francesca’s: At least 30 stores

Build-A-Bear: Up to 30 over two years

Williams-Sonoma: 30

J.C. Penney: 27

Bath & Body Works: 24

Southeastern Grocers: 22

Saks Off 5th: 20

Lowe’s: 20

J. Crew: 20

Macy’s: 8

Nordstrom: 7

Target: 6

J.Crew: 5

Kohl’s: 4

Whole Foods: 1

Calvin Klein: 1

Pottery Barn: 1

Now, that is a lot of retail store closings! Hopefully, The Fed doesn’t adopt the practice of buying failing retail stores to prop-up REITs and CMBS.

- Source, Confounded Interest

CONTRARIAN ALERT: Only 1% Of People Think This Bullish Gold Catalyst Will Trigger

It looks like another bullish gold catalyst is falling into place from a contrarian perspective because only 1% of people think this will happen.

Only 1% Believe This Bullish Gold Catalyst Will Trigger

July 17 (King World News) – Peter Boockvar: “It was 3 months ago when Business Week had a headline magazine cover titled “Is Inflation Dead?” Today, I heard that in the BoA monthly fund manager survey, all of 1% of those surveyed are predicting an increase in inflation over the coming 12 months. It was 80% one year ago. So yes, 99% of those surveyed see flat to lower inflation from here in the next year…

This Could Lead To A Rise In Prices

I’ve argued for years that with services inflation being so sticky mostly driven by housing, medical care and tuition, all we needed was a rise in goods prices to see a more notable rise in inflation. Goods deflation is prevalent and has been for hundreds of years as long as technology progresses and business becomes more efficient and thus is a good thing. Rises in goods prices tend to be more cyclical experiences rather than secular. The question before the house is now whether the tariffs and large disruptions in supply chains are the cyclical sparks that could lead to a rise in goods prices which combined with services would lead to a rise in inflation over the next 12 months.

BULLISH GOLD CATALYST

We saw the .4% m/o/m gain in goods prices in last week’s CPI for June and while there were methodology issues surrounding apparel, home furnishings impacted by tariffs saw price gains of note. 

We’ll of course see whether this was a blip or not and somehow the tariffs will be eaten by companies (not from what I’m hearing from both private and public companies however) but if one tries to look at an extreme view point on something and tries to determine the odds of the possibility of an opposite outcome, this could be an area.

Considering where global bond yields are and with the Fed about to cut rates because of their worry about too low inflation, let’s hope that inflation doesn’t rise from here and the 99% are right.” King World News note: If we begin to see a significant increase in inflation, this will be yet another bullish gold catalyst. 

We have already seen iron-ore prices skyrocket more than 91% in the past year, and nickel has also been on the move, surging a violent 4.26% in yesterday’s trading. KWN will keep an eye on commodity prices and update as necessary.

- Source, King World News

Building Permits Plunge the Most in Three Years, Even as Rates Fall

After weak home sales data and re-weakening in mortgage applications (but a modest recovery in homebuilder sentiment), expectations were for a slowdown in starts and permits but the June prints were shockingly bad.

Housing Starts dropped 0.9% MoM (worse than the 0.7% expected) but Building Permits plunged 6.1% MoM - the worst drop since March 2016.

This occurred despite a collapse in mortgage rates during the reporting period.

This is the 6th month in a row of YoY declines in Building Permits...

Under the surface, multi-family starts tumbled 9.4% MoM as single-family jumped 3.5% from 818K to 847K

And multi-family permits collapsed 20.7%, from 454K to 360K, the lowest since Feb 2017.

Two of four regions posted an increase in housing starts last month, led by a 31.3% rise in the Northeast and a 27.1% advance in the Midwest. New construction declined 9.2% in the South and 4.9% in the West.

Get back to work Mr. Powell!!

- Source, Zero Hedge

Stock Market Experts Predict a 70% Correction

July 2019 will mark exactly 10 years since the end of the Global Financial Crisis in 2009. It will also mark the longest period of economic expansion on record, surpassing the 1991 to 2001 internet boom.

The question – Is the current boom sustainable?

The 90s economic boom was fuelled by the internet. This economic recovery has been fuelled by historically low-interest rates and cheap credit – a situation many investors and economists say cannot last.

Warning Signs: The End of the Economic Boom

2018 has been the most volatile year in the stock market since the recession, and volatility can make stock market crises more likely.

Source: CNBC

Yet, volatility is just one reason the world’s biggest hedge fund managers and leading economists are predicting a 2019 crash. Another reason is rising interest rates.

The Interest Rates and Financial Crises Relationship

As the US economy firing on all cylinders, the Federal Reserve has increased interest rates eight times since 2015. However, as the US nears full employment, there is an increased danger of rising inflation and consumer prices.

Increasing interest rates is a strategy to curb the rise of inflation – increasing the cost of credit and making saving more attractive strikes a balance between people spending and saving.

However, there are also dangers to this approach. Lower consumer spending has a negative impact on the revenue of consumer-facing businesses. Declining revenue then tightens spending across both the consumer and business landscapes. At the same time, higher interest rates make it harder for financially weak companies to meet their debt obligations.

In a vicious cycle that can lead to economic shrinkage, falling stock prices, and stock market crashes, it’s not surprising that interest rate hikes have preceded over 10 economic recessions in the past 40 years.

Source: Forbes

Expert Predictions: A 70% Stock Market Crash

Increased volatility and rising interest rates are leading investors and economists to warn of an impending stock market crash.

According to hedge fund manager Paul Tudor Jones, “We have the strongest economy in 40 years, at full employment. The mood is euphoric. But it is unsustainable and comes with costs such as bubbles in stocks and credit.”

Scott Minerd, Chairman of Investments and Global Chief Investment Officer of Guggenheim Partners has forecast a 40% retracement, while economist Ted Bauman believes the market could fall by 70%.

Finally, the CIA’s Financial Threat and Asymmetric Warfare Advisor Jim Rickards has claimed that a 70% drop is the best case scenario...

- Source, FX Empire

Inside The Battle For the Next Global Monetary System: Facebook Libra vs Central Banks

Could these be the opening shots in the battle for the next global monetary system? 

Join Mike Maloney as he explores the serious implications that arise from Facebook's foray into the world of finance, and whether or not their Libra project is the ultimate Trojan Horse.

- Source, Gold Silver

IMF: The Days Of Being Paid Interest May Be Over Forever

Deutsche Bank fires 18,000 people to try to stay afloat... Gold & Safe Havens now on the move - somebody knows something. IMF Paper looks at closing the money system & charging you for cash.

- Source, Golden Rule Radio

Financial Insanity: Good Job Numbers Equals Bad, Weakening Economy Equals Good

The DOW Jones hit its all time high on July 11th and is still trending strongly near the 27,000 point mark, indicating that the economy is booming and all is right in the world, nothing is wrong, nor does anything look like it could go wrong in the short, or medium term.

This spike in price comes on the heels of last weeks amazing jobs numbers, which blew away market expectations, who were expecting 160,000 positions to be added throughout the month of June, however, this was vastly outperformed as the economy added 224,000 positions instead.

But wait? You say that the markets actually threw a tantrum and were upset over these numbers last Friday, sending the markets lower on Monday? Surely, this makes no sense and defies all common sense!

Of course it doesn't make sense, as sanity was long ago abandoned in this new age of Quantitative Easing to infinity and perpetually low interest rates. Who needs basic economics anymore? That's a barbarous relic of the past!

You see, strengthening job numbers means that the FED may pull back the punch bowl and not lower interest rates, putting a damper on the raging low rates, easy money party. What was once good is now bad and what was once bad is now good. This is the economic madness we currently live in.

Fortunately for Wall St, they had little to fear and were simply overreacting as we would quickly discover.

The rally resumed as the printer in chief, Federal Reserve Chairman Jerome Powell testified before the House Committee on Financial Services on the monetary policy and the state of the United States economy, making some incredibly dovish comments in his opening remarks.

A strong indication was given that he would be quite comfortable with cutting rates at this month FED meeting, which is scheduled to take place on the 30th-31st.

This was all the green light that the markets needed to resume the party and end their temper tantrums, as odds for the chances of FED rate cut at the end of this month once again shot back to their previous 100% odd level, as according to the CME Group FedWatch tool.

This also caused gold bullion to resume its trend higher, once again moving above the critical $1400 price level, with a number of closes above this price point. 

Once again gold bullion appears to the only rational, sane asset in the house, performing as it should and adjusting for an increased chance of interest rate cuts and dipping lower when the positive jobs report was released.

Meanwhile, smart Central Banks around the globe continue to not play into this nonsense and are continuing to purchase precious metals, with one of the key players being China, who once again added to their gold reverses throughout the month of June, adding 10.3 tons.

Poland has also continued their accumulation in the face of this insanity, stating that they have more than doubled their gold reserves over this year and last, making them the largest holder of the yellow metal in central Europe and thus a possible financial powerhouse within the region in the future.

In conclusion, the future for gold and thus precious metals in general remains bright, as predicted, I believe it will continue to rally throughout the remainder of this year and next. 

This asset class will be an anchor in the coming storm, as sanity and reality are forcibly injected back into the markets, as they always have been and as they always eventually will be.

Until then, keep stacking.


- As first seen on the Sprott Money Blog

Bill Holter and Jim Sinclair: Gold $87000 per Ounce at Least

Legendary investor Jim Sinclair and his business partner Bill Holter say Gold is going much higher. It’s a mathematical certainty. Sinclair says, “You need to look at gold, not a speculation, but as a savings account. If the dollar gets sliced in half, you basically double the value (of your gold) if not more. I think much more.

In the second reset, that will take gold to a price where it will balance the ability to pay global debt. That’s the major move coming forward. Right now, we are definitely going back to the $1,850 and $1,925 area per ounce for gold.

The second reset, you can pick any price you want for gold. Pick a high price.” With the national debt officially at $22 trillion, and the additional “missing” $21 trillion discovered by Economics Professor Mark Skidmore at Michigan State University in 2017, you have a huge amount of debt and dollars floating around.

This fact makes Sinclair’s prediction of $50,000 per ounce gold a few years ago look conservative. Bill Holter has done the math and says it simply must go much higher.

Holter explains, “If you take the 8,300 tons the U.S. supposedly has, and I did this math last year when the official national debt was approaching $21 trillion, gold would need to be $87,000 per ounce to cover just the on books debt.

I am not talking about the “missing” money, not future guarantees, pensions, Social Security and things like that. So, the number is $87,000 per ounce for gold or multiples of that.

- Source, USA Watchdog

This Completely Reasonable Change In Investor Behavior Would Send Gold To The Moon

Mark Mobius took over for the legendary John Templeton at Franklin Templeton’s Emerging Markets Fund back in the 1980s, and filled those big shoes well for three decades. Now running his own shop, he recently made what seems like a completely reasonable suggestion about gold — one that if adopted by the broader investment community would send the metal’s price to the moon:

Gold Bull Mobius Says Every Portfolio Needs at Least 10%

(Bloomberg) — Veteran investor Mark Mobius says that gold’s set to push higher, potentially topping $1,500 an ounce, as interest rates head lower, central banks extend purchases, and uncertainty surrounding geopolitics and cryptocurrencies fans demand.“I love gold,” Mobius, who set up Mobius Capital Partners LLP last year after three decades at Franklin Templeton Investments, said in an interview in Singapore, adding bullion should always form part of a portfolio, with a holding of at least 10%. “As these interest rates come down, where do you go?”

Gold has rallied in 2019, rising to the highest level in six years, as investors contemplate slowing economic growth, prospects for easier monetary policy in the U.S. and Europe and festering trade frictions.

The upswing has been given added momentum as central banks, including authorities in Russia and China, step up purchases. A revival in cryptocurrencies may lead to spillover demand from investors for the older haven, according to Mobius. “Interest rates are going so low, particularly now in Europe,” he said.

“What’s the sense of holding euro when you get a negative rate? You might as well put it into gold, because gold is a much better currency.”

Two points about Mobius’ suggestion that most portfolios should be 10% allocated to gold:

First, the idea of replacing dollar cash with a historically better-performing store of wealth seems like a no-brainer in a world of soaring fiat currency debt and plunging interest rates.

Second and vastly more interesting, the current allocation to gold in the financial world is about 1% of total investable capital, so moving from here to 10% would produce spectacular price gains for gold. If it’s even possible, which it might not be: Most current demand for physical metal is from the Chinese and Russian central banks, which presumably won’t be selling their reserves to investors anytime soon.

As for gold mining stocks, here’s a chart from Marin Katusa showing their weighting within the S&P 500. Note that it’s both minuscule and historically low. A reversion to just the average would send the miners up dramatically.

- Source, John Rubino

Gregory Mannarino: Get Out Of The Central Banks System, Global Currency Devaluations Coming!

Greg Mannarino, founder of TradersChoice.net, says the only thing you can count on in this economy is more debt being created. Mannarino says, “World central banks’ power exists in one thing, and that is their ability to issue debt. The more debt they issue, the stronger they become. So, they are loving this.”

Mannarino says the end game is simple, and that is “a gigantic wealth transfer effect. The global central banks are going to create a massive, massive problem, and then they are going to offer a solution. It’s the same scenario over and over again.”

Mannarino says central banks are signaling “this is the time to buy gold and silver because they are telling you they are going to create debt and devalue global currencies.” Mannarino says, “Get out of their system and become your own central bank by getting hard assets like physical gold and silver.”

- Source, USA Watchdog

Pompeo & Bolton Are Good For Gold & Bad For Peace...Gold Soars

It took a little over a decade, but the fantasy that The Fed has had things under control since the 2008 collapse has turned into the reality. 

It was all a lie. QE failed and is no longer just a “temporary” measure. Add in the prospect of yet another war and the motivation to own real money like gold is accelerating!

- Source, Ron Paul