Friday, August 23, 2019

Strong Retail Numbers and a Divided Fed Send Markets Spinning

The annual Jackson Hole, Wyoming Federal Reserve symposium began today and markets, as expected, were a nervous wreck, gyrating and throwing their typical temper tantrums.

The reasoning for the chaos that was unleashed throughout Thursdays trading season were numerous, but the one above all others that sowed doubt in the market's collective mind, was the recently released July 30-31 Fed minutes, which showed that the members of the board were incredibly divided over the quarter point rate cut.

Some members believe the economy is healthy, while others believe that the ongoing trade wars, that seemingly have no end in sight, pose a significant threat to not only the United States economy, but the world as a whole.

The divide heading into todays and tomorrows meetings is likely now only going to get worse.

Recently released impressive retail results posted by companies such as Nordstrom, Lowe's and Target, all of which are trading higher due to better than expected results, paints a promising picture of the US economy as a whole.

Nordstrom in particular is up by 10% in today's extended trading session alone, due to better than expected quarterly results fueled by growing digital sales (up 4%) and reduced inventory (down 6.5%).

This is a massive gain and as some Fed members are likely to argue, shows the true strength of the  economy, while other board members are going to continue to point to the deepening concerns surrounding the trade wars.

The markets hate uncertainty, and that is unfortunately exactly what we currently have as everyone holds their breath, waiting for the highly anticipated speech by Fed Chairman Jerome Powell.

This uncertainty caused the S&P 500 and Nasdaq to nose dive early on in the trading season, only to slightly recover as the day's trading action unfolded.

Reacting to this negative trading season, President Trump once again went on the attack and engaged in his own form of double speak, both talking up the economy while also encouraging rate cuts, which seemed bizarre to many.

Hoping to spur the Fed into action, the President had the following to say via his Twitter account;

"The Economy is doing really well. The Federal Reserve can easily make it Record Setting! The question is being asked, why are we paying much more in interest than Germany and certain other countries? Be early (for a change), not late. Let America win big, rather than just win!"

Gold and silver bullion also traded slightly lower, as precious metals responded as the markets did, taking the strong earnings from the retail sector as a sign that rates may not be lowered next month, as many anticipated they would be.

However, I wouldn't rule out a rate cut just yet, as I personally believe that the threat to the global economy due to increasingly unstable geopolitics is a much greater threat than anything else currently ongoing.

The trade wars, and the powder keg of a situation in the Straight of Hormuz could upset the proverbial "apple cart" at any given time, sending the global markets crashing lower and precious metals catapulting higher.

I believe Fed Chairman Powell knows this, and despite the jawboning and double speak that you are going to hear from him tomorrow, he is ultimately going to move forward with this at the front of his mind.

Lower rates are ultimately coming, if not next month, then soon, very soon.

Easy money is here to stay and precious metals are destined to go higher.

Until then, enjoy the discount and keep stacking.

- As first seen on the Sprott Money Blog

Thursday, August 22, 2019

Wednesday, August 21, 2019

Jim Grant: Cycles Begin and End In Excess

Gold now pays better interest at 0 than $13 trillion in negative paying bonds! 

Socialized Risk: Big boys get winnings & tax payer takes all losses. 

Bagehot: Central Banks should lend at very high interest rates & only with collateral.

Tuesday, August 20, 2019

Tom Luongo: The Mother of All Safe Haven Trades Has Begun

As the sovereign Debt Crisis unfolds, we have now entered the SafeHaven trade with Gold. 

Tom Luongo says it's "the mother of all safe haven trades". Investors will also seek out safety in silver, but what about the dollar? 

Tune-in for the answer to that question and a whole lot more! Today we welcome first-time guest Tom Luongo to Silver Doctors. 

Looking for independent, free-market and alternative analysis with just the right blend of market, economic, political and geopolitical analysis? Then look no further!

- Source, Silver Doctors

Saturday, August 17, 2019

Scaramucci Talks Gold Price and Market Volatility; Weighs In on a Gold Standard 2.0

Gold is a near-term safe haven asset, said Anthony Scaramucci, but the hedge fund manager and former White House Communications Director sees potential in other assets on a longer-term basis. 

“It’s a near-term safe haven but long-term it really doesn’t solve people’s problems,” Scaramucci told Kitco News. “I would prefer to put the money or the capital into assets that I think are actually going to return something as opposed to be waiting for other people to think it’s more valuable to me in terms of where my entry point is.” 

Scaramucci noted Warren Buffett’s view on gold, which is that the yellow metal’s value is derived from its finite supply rather than contribution to productive economic growth.

- Source, Kitco News

Friday, August 16, 2019

Inflation Rising: Consumer Goods Prices Increase by Most in Seven Years

The trade wars are taking root and finally, finally the damage is starting to ripple through not only Wall St, but Main St as well, as inflation steadily ticks higher.

This comes on the heels of a rate cut last month, in which one of the reasons why the Federal Reserve acted, was because they believe inflation was too low.

This is laughable that this is even a reason to act and it just goes to show the complete disregard that the Fed has for the average person on the street, who works hard their entire lives, saves for retirement, just to see those saving slowly chipped away by an easy money policy.

The Federal Reserve has a 2% inflation target, a target that until recently they believed they would not reach.

That may however be about to change, as the Labor Department stated on Tuesday that its consumer price index increased by 0.3% last month,  surpassing some analysts expectations.

Meanwhile, CPI Goods are up 0.4% year over year, which is the highest level since November 2012.

Relatively speaking, these levels are minor and nothing major to worry about, but what is truly worrying is how the Federal Reserve openly admits that they would love to see inflation rise to higher levels.

Rest assured that this recent uptick in inflation is going to do nothing to change the Federal Reserves easy money policy that they have embraced, the printing presses are going to continue working in overdrive and the markets are still highly anticipating an additional rate cut at the next months Fed meeting.

Both Goldman Sachs and Morgan Stanley are amongst those who believe that more rate cuts are on the way, with Morgan Stanley even going as far to predict that rates are going to return to zero, which is pure madness.

These additional cuts are only going to fuel inflation to even higher levels.

Sadly, more pain is on the way as we have yet to see the full ramifications of the ongoing US - China trade wars, that continue to loom over the worlds head.

Next month, on Septemeber 1st, an additional 10% in US tariffs are set to be enacted on Chinese goods entering into the country. It is expected that this will affect roughly $300 billion worth of imports.

Once again, these tariffs are going to hit consumer goods the hardest, as that it predominately what is imported from China, meaning that new highs in the CPI goods are likely on the way.

This strategy to drive prices higher and force companies to move the production of their goods to other countries is working, as I have recently highlighted, however, it is undoubtedly going to cause some short to medium term pain for consumers as well.

President Trump once again inflamed the divide between the United States and China, taking to twitter to launch a renewed attack on Tuesday;

"Through massive devaluation of their currency and pumping vast sums of money into their system, the tens of billions of dollars that the U.S. is receiving is a gift from China. Prices not up, no inflation. Farmers getting more than China would be spending. Fake News won’t report!"

No one is going to come out unscathed from these trade wars.

Sadly, it appears that we are going to be entering into a new era of rising inflation, as the Fed continues to be beholden to the markets, maintaining an easy money policy and as consumer goods prices continue to rise due to the ongoing trade wars.

Fortunately, this is exactly where precious metals come into play and as we have witnessed recently, are doing exactly what they should do in their time of need.

Most notable has been gold, as it continues to maintain above the crucial $1500 level, despite suffering repeated attacks from those who would love nothing but to see it brought lower.

If these trade wars are not rapidly brought to a close, then I believe that gold is destined to go higher, much higher, possibly even testing than breaking through old highs, with silver rapidly following suit shortly after.

The trade wars continue on, the easy money policies continue on.

Keep stacking.

- Source, as seen on the Sprott Money Blog

Thursday, August 15, 2019

Steve Keen: Could A Debt Jubilee Really Work?

One way or another, we're going to have to address the $trillions of outstanding bad debts. 

Over the past decade, the world’s central banks have distorted the price of money by bringing interest rates to record lows. 

With credit so cheap, asset prices have risen dramatically as companies and governments have borrowed to the hilt. 

And now with the “Everything Bubble” threatening to burst (perhaps in mid-bursting already?), we’re suddenly realizing that the phantom asset price gains were ephemeral, while the debts are permanent. 

How will the economy cope with dangerously overleveraged nations, industries and households? Not well.

- Source, Peak Prosperity

Wednesday, August 14, 2019

Rob Kirby: Protect Your Money Before It's Too Late

You've been warned. You're enjoying the rising tide that's lifted your IRA, 401-K, and home valuation.​.. 

You know you're at risk... 

You know you're riding on a bubble... You've told yourself you'll take some steps to deal with it... Some day... Pretty soon... But you've gotten too busy... 

And on the news, and the president, and lots of people are saying everything's going to be okay... But you know in your gut everything's NOT okay. 

Rob Kirby, experienced credit and precious metals expert, proprietary analyst, and founder of KirbyAnalytics.com, returns to Reluctant Preppers to answer YOUR viewer questions, and to offer us his characteristically honest insight.

Tuesday, August 13, 2019

Wolf Report: Fuel for the Next Mortgage Bust?

Here we go again: Cash-out refi hype is back full-blast, and for the first time since early 2006, people are doing it.

- Source, The Wolf Report

Monday, August 12, 2019

Bill Murphy: Silver Cheapest Asset on the Planet

Bill Murphy, Chairman of the Gold Anti-Trust Action Committee (GATA) is most bullish on silver. 

Murphy says, “For anyone that wants to get involved in precious metals, silver is going to be a home run. It actually just started.

Gold goes first because the physical market is tight. Then, the industry and silver people are going to make sure they have secure supply, and all of a sudden it’s going to be like a panic.

Silver is the bargain of a lifetime. It’s certainly the cheapest asset on the planet.”

- Source, USA Watchdog

Sunday, August 11, 2019

Craig Hemke: Watch Gold Now, Gold Knows What is Happening

Trade wars, escalating tariffs, China is devaluing their currency while unloading US Debt and stockpiling gold, ​US Economy struggling, and looming recession... 

Which way will these mega-forces drive our economic lives? Craig Hemke, founder of TFSMetalsREport.com, returns to Reluctant Preppers to answer YOUR viewer questions and also share his perceptive and witty perspectives on the imminent breakthroughs in the gold market. 

Hemke tells us to watch gold closely at this time, since China's fiscal policy response and each week's closing gold price may ignite the next stage of the current gold rally...

Saturday, August 10, 2019

The Renewed Eruption of the Currency Wars Will Ensure Gold and Silver Move Higher

Gold is trading solidly above the $1500 mark at the time of writing and I believe we are only just getting started, the currency wars are back in full swing and they are going to be more intense than ever.

The United States government, ironically labelled China a currency manipulator for the first time since 1994, marking a severe uptick in their rhetoric against the Chinese government as the trade wars continue to spiral out of control, with seemingly no end in sight.

Many simply waved this move off as nothing more than what it initially appeared to be, jawboning with no true ramifications behind it, however others see it as a blatant threat by the US administration against China, as the last time this language was used 25 years ago, was when China was placed on a currency blacklist.

Some were surprised by this move, as they see it as an overreaction, fearing that we have now moved into another phase of the ongoing currency wars that have been bubbling behind the scenes for years, currency wars that are now in plain site for all to see.

Unfortunately, this should come as no surprise to anyone, as President Trump stated back in 2016 that he fully intended on labelling China a "currency manipulator", a statement that was laughed off, until now.

This move comes on the heels of a Fed interest rate cut, in which the Fed Chief Jerome Powell lowered rates by 0.25%, citing fears in a weakening global economy and ongoing trade wars.

Of course, China is far from the only currency manipulator in the world, as countries are constantly "racing to the bottom" in an attempt to lower the value of their currencies, increasing their competitiveness on the international markets, by artificially making the price of their goods lowers.

In addition to this, lowering the value of ones currency drastically cuts down on the true cost of the national debt, of which the United States now finds itself roughly $22.5 trillion dollars in the hole.

Savers be damned. Retirees be damned. The race to the bottom must and will continue on.

This race to the bottom is one of the many reasons why gold and silver are posting such impressive gains recently, as the markets are finally coming to the realization that many of us in the precious metals community reached years ago. The printing presses are not going to be slowed down, they are not going to be stopped.

This is not just limited to the United States, but is a global phenomenon, as no country can afford to be left behind in the currency wars. 

On Wednesday, three additional countries joined in on the action, following the United States lead. 

Central Banks in India, Thailand and New Zealand all lowered interest rates in a move that shocked and surprised the markets, signalling just how rapidly things are deteriorating.

This, in addition to the moves made by China on Monday, in which they allowed the Renminbi to fall through a key threshold level, earning them the "currency manipulator" title, sent markets spinning throughout the week, only just stabilizing on Thursday.

Expect rate cut after rate cut, by country after country.

Already the Fed has been under renewed attack by President Trump, who took to Twitter to state the following;

"As your President, one would think that I would be thrilled with our very strong dollar. I am not! The Fed’s high interest rate level, in comparison to other countries, is keeping the dollar high, making it more difficult for our great manufacturers like Caterpillar, Boeing, John Deere, our car companies, & others, to compete on a level playing field. 

With substantial Fed Cuts (there is no inflation) and no quantitative tightening, the dollar will make it possible for our companies to win against any competition. 

We have the greatest companies in the world, there is nobody even close, but unfortunately the same cannot be said about our Federal Reserve. They have called it wrong at every step of the way, and we are still winning. Can you imagine what would happen if they actually called it right?"

Sadly, if people think the "worst is over", then they are badly mistaken. We have entered into a whole new phase of the currency wars, in which country after country is going to be racing to see who can spin the quickest down the drain.

The markets and the President are going to continue to lean on the Federal Reserve, who is likely to cut rates multiple times more, even before the year is out.

Other countries are simply going to follow suit as the two economic powerhouses that are the United States and China continue to battle it out.

The currency wars are here, they are full blown and gold and silver are going higher in response to the madness that is erupting all around us. Much higher.

- As first seen on the Sprott Money Blog

Friday, August 9, 2019

John Williams: A Compelling Case for Dollar Destruction and Hyperinflation

Walter J. "John" Williams shares his educated opinion on how soon he sees a dollar decline leading to hyperinflation and what we should do to protect ourselves.

Is there a strong case for letting the dollar destroy itself? What will be the ultimate outcome if that is what happens?

Unfortunately, it appears that, that is the path we are headed down, no matter what we do now.

- Video Source, Jay Taylor Media

Wednesday, August 7, 2019

Ray Dalio: How The Economic Machine Truly Works

Economics 101 -- "How the Economic Machine Works." 

Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, "How does the economy really work?" 

Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur.

- Source, Ray Dalio