Bill Murphy: Gold Looks Different This Time

Bill Murphy, co-founder of the Gold Anti-Trust Action Committee (GATA) and a champion for legal and honest precious metals markets, returns to Finance and Liberty to update us on the fallout from the recent action by the DOJ against JP Morgan’s gold trading desk as a “criminal enterprise.”

- Source, Reluctant Preppers

The RISE Of Gold: Will We See Gold Skyrocket As People Flee The Dollar?

Josh Sigurdson talks with John Anderson of Triumph Gold Corp about the rise of gold and why gold and silver as well as mining companies are so lucrative going forward as people pile out of the economy in fear of a complete collapse. 

While recession woes continue, gold and silver have had a good year and it's no doubt that people are looking at history as a lesson when it comes to the historic support for precious metals. 

John Anderson breaks down why he thinks gold will do well in the future as well how companies such as his own (Triumph Gold Corp) will do in a time of great "triumph" for gold.

- Source, WAM

John Rubino: All Hell Breaks Loose When Everything Falls Apart

Financial writer and book author John Rubino points out, “Fear is the enemy in a fiat currency system. Everything is based on our assumption that the guys in charge know what they are doing and that the confidence in them is good. 

You take that away, and they let us see them sweat, and it’s over. There is no real bottom for the dollar, euro or the yen. Their intrinsic value is zero. 

When the economic players out there in the global financial system realize that the central banks of the world are out of ammo, and nothing these guys do is going to fix our problem, then all hell breaks loose.

What worries me about today’s world is that everything falls apart all at once, and there is no way to fix what went wrong.

We have a lot of examples of governments doing crazy things when everything falls apart.”

- Source, USA Watchdog

Pot Calls Kettle Black: Fed Lectures Congress Over Ballooning Deficits

Did I hear correctly, or have I truly gone mad? Did Jerome Powell, the head of the Federal Reserve actually lecture Congress over their ballooning debt levels and out of control spending?

After reconfirming and double checking, no, my sanity is still intact and yes, the Federal Reserve, who know nothing else, other than printing fiat funny money into oblivion, is actually lecturing Congress on the path that the United States is heading down, one which now sees the National Debt level at a stunning $24 Trillion and growing with each passing second.

The irony is just too sweet, as the Federal Reserve are the kings of debt and the facilitators of this out of control debt, highlighted by their recent actions in the overnight lending repo markets, of which they have been vigorous plugging holes, throwing ungodly amounts of money at the problem and ballooning their own balance sheets in the process.

Regardless of this "pot calling the kettle black" scenario, the Federal Reserve is not incorrect in their assessment, as government deficits have indeed been exploding higher as of lately, accelerating at an alarming pace.

In fact, the latest Treasury Department Report, which was just released on October 31st, highlights just how much the deficit has been growing, with last month's shortfall being 34% higher than the same time period in 2018, hitting $134.5 billion in just one month!

Projections for the 2020 deficit don't get any better, with estimates indicating that the deficit will surpass the $1 Trillion mark, a number that was only reached previously in the years following the 2008 crisis.

This is happening in the "good" times and this is exactly why Federal Reserve Chairman Powell is ringing the alarm bells over Congress's head, as he knows that the Fed will not be able to bail out the markets like they did during the 2008 crisis. 

Perhaps, as the Fed's very own words are indicating, they know that they are out of bullets this time around, with interest rates at already historically low levels.

Below are just a few of the alarming statements that Federal Reserve Chairman Powell told Congress during Wednesdays meeting;

“The federal budget is on an unsustainable path, with high and rising debt,”

“Over time, this outlook could restrain fiscal policy makers’ willingness or ability to support economic activity during a downturn.”

In addition to this "talk down", the Fed Chairman also reiterated his previous position, that the Fed has no intentions of lowering interest rates anytime soon, unless the economy takes a nose dive lower in the coming months.

The broader markets appear to believe this recent hawkish stance that the Fed has adopted, with the odds plummeting for a rate cut at the next Fed meeting.

As it stands today, the markets believe that there is a 96.3% chance that rates will not be changed at the next months Fed meeting.

This is likely to be the case and I would say that these odds are absolutely correct, as the damage to the Feds reputation would be severe indeed if they continued to lower rates after all this hawkish talk of lately and especially after they just wagged their fingers at Congress for their reckless spending.

Still, 2020 is an entirely different ball game and I expect continued intervention in the markets on behalf of the Federal Reserve, continued excessive spending and record deficits from Congress and extreme volatility as we head into the 2020 elections, the latter of which I believe are going to be incredibly violent and nasty, leading to even further division within the United States.

All of this is a recipe for higher gold and silver prices, who as of the start of November have been suffering under renewed attacks against their prices and are thus trading at a discount to what I believe to be much higher future prices.

Until then, keep stacking and ignore the noise.

- As first seen on the Sprott Money Blog

Harry Dent: What Does Wall Street See that These Charts Don’t?

Wall Street continues to be convinced that the economy is edging back up again after a stall following the tax cut boost and near 3% GDP figures in 2018.

I talked last Monday about how there were some key indicators like industrial production growth and construction spending that were not confirming such a resurgence… at least not yet. And such falling trends tend to be a leading indicator of falling profits.

This chart is more disturbing, as it comes from those very CEOs that got the direct benefits from the tax cuts at the beginning of 2018. Their confidence in the economy is not just slowing, it is plunging!

They clearly and haven’t been making significant investments in new capacity as they don’t need it. The publicly-traded ones are buying their own stocks to goose earnings per share instead.

But are they seeing signs of declining demand from their customers? Are they worried about Trump getting impeached and ending the corporate tax and deregulation gravy train? All, legitimate concerns, which could accelerate the pending financial crisis. Wall Street is clearly not reacting much to that threat yet.

The next chart also clearly shows that earnings per share are cratering as well. Part of that is to be expected as the surge from the tax cuts does not continue forward. But the actual 4% decline in the third quarter should be alarming.

This combination of indicators simply does not bode well for the stock market, yet it keeps edging up. How long can the markets continue to be divorced from Main Street and the real world?

So, what does Wall Street see that these charts don’t?

Good question…

I say it simply sees “more crack” from lower rates and more QE.

How much longer can that last?

- Source, Harry Dent via Economy and Markets

Palisade Radio: A Financial Crisis is on the Way & Will Push Gold Much Higher

Sam discusses how 2015 was the bottom of the bear market for gold and why he doubts that we will ever see those levels again. 

Gold may retest the 2016 highs over the next month and then head higher by the end of this year. 

Sam believes that markets are inefficient and that underlying systemic risks have yet to be priced into gold. He recommends investors keep a close eye on the Fed's balance sheet over the next few months. 

Don't try and call markets but instead diversify your portfolio and invest in physical if you believe in gold.

- Source, Palisade Radio

When the Market Crashes, How Do You Continue to Profit?

Hedge fund manager and author Hari Krishnan, portfolio manager at Doherty Advisors, breaks down his analysis of hedging and profiting from market downturns, concluding with his view of the risks and opportunities.

- Source, Real Vision

This is A Big Deal in the Context of the Biggest Financial Bubble Ever Blown

“I’ll emphasize again the profound change possibly happening in bond yields overseas and what that can mean for US yields. The Japanese 10 yr JGB yield jumped another 4.3 bps to just a hair below zero at -.02%. This is the least negative since mid April and is now really jumping. 

In response, the Topix bank stock index is at the highest since April. Last week there was a soft 10 yr auction and today was a messy 30 yr auction. I’ll repeat, for the first time in more than 20 years of BOJ easing, they are telling everyone that they want higher long term interest rates in order to breath some life into their banks. 

This is a big deal in the context of the biggest financial bubble ever blown. Sorry for the hyperbole. Yields are up slightly in Europe and the US 10 yr is at 1.94-.95%.

The October NFIB small business optimism index improved by .6 pts m/o/m to 102.4 after falling in the two prior months by a total of 2.9 pts. For perspective, this number has averaged 102.9 year to date and the peak in the expansion was 108.8 in August 2018 just as the tariff fight was about to intensify. 

After falling by 3 pts in September, Plans to Hire rose by 1 pt but finding the needed help is still the big challenge. With this, current Compensation Plans rose by 1 pt while future Comp Plans jumped by 4 pts to the highest since May…"

- Source, Peter Boockvar via King World News, read more here

Forget Current Prices, Investors Need to Add More Gold Now

Although gold prices have seen a slump recently, investors should not take this is as a bearish sign and instead, consider adding more of the yellow metal to their portfolio, this according to Frank Holmes, CEO of U.S. Global Investors. 

Holmes noted that gold stocks and gold bullion are currently underweighted in investors’ portfolios. “When you look at Canada, and you look at the index and percentage of gold stocks, they’re extremely underweighted,” he said.

- Source, Kitco News

Chinese Central Bank Gold Buying, On a Need to Know Basis Only

After announcing monthly gold purchases for ten straight months between December 2018 and September 2019, the Chinese central bank, the People’s Bank of China (PBoC), has now paused buying for its strategic gold reserves.

At least that’s according to October figures from the State Administration of Foreign Exchange (SAFE), China’s currency management agent, which each month announces the value of China’s foreign exchange and gold holdings for the previous month-end.

Given the pause or halt last month in China’s gold accumulation, the strategic gold reserves of the People’s Republic of China (PRC) now remain unchanged at 1948 tonnes for October. But for ten months back-to-back between December and September, the Chinese central bank claims to have added a total of 106 tonnes of monetary gold to its reserves, taking China’s strategic gold stockpile from a reported 1842 tonnes at the end of November 2018 to the current total of 1948 tonnes.

Chinese central bank gold reserves – No buying in October

However, as with a lot of official Chinese figures, there is widespread skepticism about China’s official gold holding figures, as well as a widely held belief that the Chinese state holds far more gold than it claims to hold. This view subscribes to the opinion that China prefers to keep a large part of its gold reserves unreported as it continues to accumulate monetary gold towards or above the holdings of other economic blocs such as the Euro area or US.

A Trail of Crumbs

That’s not to say that criticism leveled against China in not being forthcoming about its national gold reserves could not be leveled against practically all the world’s central banks and monetary authorities. It could. I do not even know of even one central bank that is fully transparent about its gold holdings. Yet in a world of central bank gold holdings opacity, these official gold figures and their trajectories are arguably better than no figures at all. Crumbs to follow a trail. But better than no crumbs to follow.

Putting aside this empirical drawback, why has China decided to pause or halt state its gold buying now? In reality, the Chinese state probably has not stopped buying gold, but rather it wants to signal that it has, to perhaps thaw relations in its ongoing trade war with the US.

To see China’s stop-start gold accumulation and how it announces additions to its gold reserves when it feels like it or when politically expedient to do so, it’s instructive to look back at China’s track record in communicating its gold buying since the early 2000s. And the track record is not a pretty one when plotted on a chart, filled as it is with years and years of flat-lining, intermittent chunky jumps, and at times sporadic series of monthly moves upwards.

In early January 2002, the Chinese central bank revealed that its gold reserves stood at 500 tonnes. Previously, in late 2001, the PBoC had been reporting gold holdings of 394 tonnes, a figure which had not changed since 1980. So where did this 106 tonnes of gold come from and when was it bought?

On the Q.T.

Then towards the end of 2002, the PBoC updated its gold holdings to 600 tonnes, implying that it had purchased another 100 tonnes in less than a year. When were these purchases made? Following this for more than six years, Chinese central bank gold reserves remained completely static. In theory that it, for in April 2009 the PBoC made a shock announcement that its gold reserves now totaled 1054 tonnes. When was this 454 tonnes of gold purchased? In the world of physical gold accumulation, it is not physically possible to suddenly add 454 tonnes of gold to a central bank’s holdings by buying on the open market. True, there could have been a transfer from one central bank or the other, but no other central banks had significant corresponding gold outflows on or around that time. And we also know that the PBoC buys gold under the radar on the international market, such as in London and Hong Kong, using commercial bank agents.

As Reuters noted at the time on Friday 24th April 2009:

“China disclosed on Friday that it had secretly raised its gold reserves by three-quarters since 2003, increasing its holdings to 1,054 tonnes and confirming years of speculation it had been buying.“

So China was buying secretly, on the q.t. Fast forward to July 2015, and the Chinese central bank did it again, announcing that it now held 1658 tonnes of gold. Another six years of static gold reserves from April 2009, and then suddenly a 604 tonne addition. When was this 604 tonnes bought? Certainly not in July 2015. Rather the PBoC continually accumulates gold, and makes announcements about its gold holdings how and when it feels like it, keeping tight-lipped for most of the time.

As the Financial Times noted in its July 2015 article “China breaks 6-year silence on gold reserves“:

“China ended years of speculation about its official gold holdings by revealing an almost 60 per cent jump in its reserves since 2009.”

Again we see in July 2015 that China for whatever reason broke its six year silence about its gold buying, not that it suddenly started buying. July 2015 also saw the PBoC begin announcing monthly gold purchases, something it continued to do until October 2016, during that time claiming that Chinese strategic gold reserves rose from 1658 to 1842 tonnes, an addition of 184 tonnes. The monthly gold buying announcements began, according to the PBoC, because it decided that it would follow the IMF’s Special Data Dissemination Standard (SDDS) for the IMF international reserves reporting template which requires contributing countries to provide updated gold reserve data to the IMF on a regular basis.

Then why did China stop announcing gold purchases in October 2016 all the way through to December 2018? If you asked the PBoC, it would answer ‘because we didn’t buy any gold during that time’. But how believable is that when China at times went for years without announcing gold purchases, only to then announce massive gold reserve increases? The same goes for China’s monthly gold purchase increases for ten straight months between December 2018 and September 2019.

On paper, there is no consistency in the communication of China’s gold buying if looked at in isolation. The communication is even less credible given that its hard to believe China still has less than 2000 tonnes of accumulated gold reserves. If China’s true gold holdings differ from what it claims, then it undermines its entire gold buying communication strategy and the international reserve reporting data that China publishes through SAFE and through the IMF’s reporting database...

- Source, Bullionstar, read more here

The Real Truth About the Fed’s Rate Cuts...

“What is going on with the world economy?” That’s how Mike Maloney begins his new video, which is actually not about the economy, per se, but about currency abuse, interest rate cuts, and a big fat warning about the coming recession. 

Mike starts with a slide he’s shown before, US currency creation, but he revisits the topic so he can compare it to Switzerland. In response to the financial crisis, the US created about five times the original amount of its currency—but the Swiss created TWELVE times! 

Further, the US stopped currency creation in 2014, but unbeknown to most investors, the Swiss didn’t end their currency creation until just last year. All this from a country that supposedly has one of the strongest fiat currencies in the world. 

The Swiss franc has long been regarded as the most reliable and solid—yet it has been diluted and debased worse than the US dollar. 

The message being, those fiat currencies widely considered to be “strong” by international investors are actually just as weak or weaker than the US dollar, and thus highly vulnerable to a monetary and financial crisis. 

Mike then touches on the latest hot button issue in finance today, repurchase agreements (overnight loans the Fed makes that banks promise to “repurchase”). 

Check out the sudden spike in this chart from Mike’s video.In just the past few months, $215.5 billion worth of repurchase agreements have been created. You’ll notice it was flat for a full decade, and now is higher than it was at any time during the Great Recession. 

We agree with Mike’s reaction when he asks, “What is going on with the world economy?” Why have almost a quarter of a trillion dollars in repurchase agreements been created when the economy is growing, unemployment is at record lows, and the stock market is at all-time highs? 

Clearly, something else is going on behind the scenes that suggests not all is as well as presented. Mike ends with a “scary” chart about interest rate cuts and recessions. He uncovers something we haven’t seen anyone else talk about. 

Follow Mike’s cursor as he counts down the relationship between interest rate cuts and the timing of the next recession. It’s quite eye-opening. 

Mike ends with a four-word warning: “You better get ready.” Are you ready for the next phase of economic, financial, and monetary madness? 

The Fed’s desperate attempts to keep the game going are blatantly obvious, so Mike’s warning is not hyperbole. History shows that physical gold and silver provide the strongest buffer against crisis or calamity. 

We hope you and your family, like ours, will be ready when it strikes.

- Source, Gold Silver

Gold’s Compression, Institutional Buying, US Dollar Ready For A Bounce Up?

This week we review the price movements of gold, silver, platinum, palladium, and the US Dollar index as well as diving into the gold to silver ratio, platinum to palladium ratio, and more.

- Source, Golden Rule Radio

How the UK Election Could Pull the Fiscal Trigger for Markets Worldwide

This week Real Vision uses Refinitiv's best-in-class data to let you in on the big conversation about the global knock-on effects of the UK election - including implications for the dollar and bond yields. 

The market chatter explores a potential surprise inflationary boost towards year-end and whether gold will pop again. And the whisper is around what Sweden might be telling us about the economic future for Europe.

- Source, Real Vision Finance

The Fed's Artificial Fourth Quarter Stock Market Boom

Quantitative easing in the United States is alive and well, the markets know this and they are surging higher in the fourth quarter as a result of it, creating an artificial move higher in the S&P 500 as it steadily ticks higher.

This move higher in prices comes in spite of the fact that the global economy, including within the United States is actually beginning to slow down, as the stress of the ongoing trade wars continues to weigh heavily on the system.

One of the major warning signs comes from the US manufacturing sector, which in recent months has taken a sharp turn lower, as recent reports indicate;

Truck and trailer order rates are down between 50% and 70%. General distribution, a proxy for smaller machine shops and fabricators, is off by 4% to 7%. Automotive is down by 4%.

Typically a slowdown in US manufacturing is then followed by a slowdown in US non manufacturing sectors, which then leads to a cascading effect as a full blown recession sets in and takes hold of the economy.

Yet, despite these warnings and the risks that the world faces in the fourth quarter of 2019, the markets steadily and happily truck along, moving higher in price month after month.

This can largely be attributed to the direct, blatant manipulation that the Federal Reserve has been engaging in since the September scare in the overnight lending repo markets, in which the Fed had to intervene and come to rescue, preventing a crash within the banking sector.

Since this time, the Federal Reserve has continued to pump a monstrous amount of money into the system, doing what the Fed does best, throwing money at the problem and hoping to plug all leaks that appear with massive wads of cash.

Financial and geopolitical guru Jim Rickards recently tweeted out the following chart, which highlights just how rapidly the Fed's balance sheet has exploded higher;

This straight up move higher is due to the Federal Reserve injecting a stunning $175 billion in cash directly into the markets, pushing their balance sheet back up to $4.07 trillion, undoing much of their recent work in "exiting" the markets and proving my prediction correct, that once they tried to get out, the system would begin to fall apart and they would be forced back in.

This injection into the system coincidentally just happens to almost exactly match the 4% rise higher in the S&P 500, as the Fed's balance sheet has expanded by 4.5% since the Fed began once again to engage in "Not QE".

There is no getting out for the Fed, this is the system they have created and QE to infinity is here to stay. They are trapped.

This is the system we now find ourselves in. One that is completely broken and rotten just underneath the surface, papered over with ungodly amounts of fiat currency.

Ray Dalio, Co-Chief Investment Officer & Co-Chairman of Bridgewater Associates also vented his frustration with the current state of the system, penning a great article explaining the mess the world now finds itself in, titled "The World Has Gone Mad and the System Is Broken".

Ray Dalio isn't wrong. The world truly has gone mad and it is only a matter of time before the day of reckoning arrives, sending inflation soaring higher, markets reeling and precious metals rocketing higher.

Until that day, enjoy the discounts, keep stacking and keep preparing.

- As first seen on the Sprott Money Blog

NY Fed Discloses Repo Madness Averages $190 Billion Per Day!

Despite the NY Fed disclosing recently that Repo Madness averages (means that some days it's a lot higher) $190 billion dollars per day and not $120 billion dollars per day, the US Dollar Index is rallying and back over 98. 

The Fed's official balance sheet increased another $20 billion dollars in the last week. 

It's now increased $72 billion dollars in just the last 2 weeks and $279.5 billion dollars since the end of August 2019! About 5 months of Fed QT (balance sheet reduction) has now been reversed in barely 2 months!

- Source, Wall St for Main St