Max Keiser

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Gold, Silver, Bitcoin
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The Future of Gold: Next 30 Years For Gold

Ti, 05/22/2018 - 14:32

Gold 2048: The Next 30 Years For Gold

Gold 2048 is an interesting and comprehensive new report from the World Gold Council which brings together industry-leading experts from across the globe to analyse how the gold market is set to evolve in the next 30 years.

Key insights from authors such as George Magnus, senior economist; Rick Lacaille, Global Chief Investment Officer of State Street Global Advisors; and Michelle Ash, Chief Innovation Officer at Barrick Gold include:

  • What does the future hold for gold?
  • “Gold will be a refuge for people in times of crisis as it has always been” – Magnus
  • The expanding middle class in China and India, combined with broader economic growth, will have a significant impact on gold demand.
  • Use of gold across energy, healthcare and technology is changing rapidly. Gold’s position as a material of choice is expected to continue and evolve over the coming decades.
  • Mobile apps for gold investment, which allow individuals to buy, sell, invest and gift gold will develop rapidly in India and China.
  • Environmental, social and governance issues will play an increasing role in re-shaping mining production methods.
  • The gold mining industry will have to grapple with the challenge of producing similar levels of gold over the next 30 years to match the volume it has historically delivered.

 

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Gold 2048 full report and related reports are published by the World Gold Council (May, 2018) and available to subscribers here

Our Economy Is Failing Our Society

Ti, 05/22/2018 - 02:14

One of the most unrecognized dynamics of our era is the structural dependence of our society on our economy. One set of pundits, politicos and academics wring their hands over the fragmenting of civil society (the rise of disintegrative, divisive forces and the decay of integrative forces) and decry the rising inequality that is our economy’s dominant feature, while another set of pundits and academics celebrate the economy’s remarkable adaptability or focus solely on reading financial tea leaves (interest rates, Fed policy tweaks, unemployment rates, etc.)

Those few analysts who escape their respective silos/academic ghettos rarely get past generalities such as the erosion of social mobility, a dynamic that is clearly economic and social. But the precise mechanisms behind the secular erosion of social mobility are lost in platitudes about how A.I. and robots will free us all to be poets or consumers of a vast and endlessly enjoyable leisure.

The key understanding that’s lacking is that economic structures organize and limit the social structures underpinning civil society. To understand why civil society is disintegrating on so many fronts (public health, civil discourse, etc.), we must understand how our economy has failed to support the social structures required for an integrative, inclusive civil society.

Our economy is transforming/adapting as a result of powerful secular trends:the 4th Industrial Revolution (a.k.a. the digital-networked-AI-Big-Data revolution), globalization, the commoditization of ordinary capital and labor, the financial and political dominance of quasi-monopolies and cartels, and perhaps the most unrecognized dynamic, the devaluation of ordinary capital and labor in favor of scarce and often rarefied forms of capital and labor in the fields of technology, entrepreneurship and finance.

Collectively, these profound structural changes have created a winner take most economy that favors the politically connected, the privileged (i.e. those who are already wealthy, powerful or holding privileged positions) and those few who have mastered scarce skills in financialization, technology and entrepreneurship.

Everyone below this class has seen their income stagnate or decline, and their household wealth erode unless they happened to own homes in skyrocketing markets or happened to have stock options or some other substantial (and relatively rare) ownership of income-producing assets such as a profitable family business.

My analysis of IRS income found that at most a few million households out of America’s 130 million households have productive assets (i.e. assets that generate net income) that aren’t tied to asset-bubbles in real estate and stocks. Once those bubbles pop (and all asset bubbles eventually pop), then the millions of households who reckoned their bubble-era wealth was a permanent feature of their lives will discover that bubble-era “wealth” is temporary, a phantom sort of wealth that vanishes as quickly as it arose.

The top tier of our economy lives in a different society than the bottom 90%.Some of the socio-political manifestations of this reality are discussed in a lengthy Atlantic essay: The 9.9% Is the New American Aristocracy.

If we read between the lines, we discern the differences in the economic classes are not just differences in higher education credentials or skills–the fantasy that all we need to solve these structural asymmetries is “more job training”–but differences in values, social networks, family structures and perhaps most invisibly to critics left and right alike, in the positive social roles available to their children.

The foundation of any economy is its money, and this is why I keep saying: if you don’t change the way money is created and distributed, you change nothing. Yes, we can tweak various financial parameters and delude ourselves into believing that yet another raft of laws and regulations will actually reverse the erosion of civil society or reverse the rapidly widening gulf between the top 5% and the bottom 95%, but delusions aren’t reality.

If we want to extend the opportunities for positive social roles to everyone, we have to change the way money is created and distributed in our economy.That will require a transformation not just in whiz-bang technology but in the foundations of our entire economy.

These two charts reveal the structure of economic and thus social asymmetry: the top owns capital/productive assets, the bottom own either a bet on an unstable asset bubble (housing or stocks) or no productive assets at all:

 

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Make It Or Break It Week: Either Gold & Silver Or The Cartel Will Set The Tone Going Into Summer

Ma, 05/21/2018 - 16:16

Gold & silver really need to rally this week.

It really boils down to one word: Momentum.

My call has been for the rally to begin this week. However, if the rally doesn’t begin this week, I feel we can kiss any hopes of a rally goodbye until the second half of June.

Why?

Well, much of it has to do with next week.

You see, U.S. markets are closed next Monday for Memorial Day.

Point one: The cartel loves to strong arm the markets on holiday shortened weeks.

And if that were not bad enough: Next Friday is the BLS Jobs Report.

Point two: The cartel loves to smash the metals on Jobs Friday.

Moving past next week, we have a week of pain, which would lead us into the second week of June, and that week culminates with the FOMC (presumed) rate hike and Fed Head Love Fest (otherwise known as MSM press conference after the statement).

What does all of this mean?

If we don’t rally this week, we have almost no hopes of rallying next week, and the MSM will be all over the Fed in the week leading up to the FOMC meeting. That means we have to deal with the whole, “the economy is awesome, rate hikes are good for the dollar and bad for gold” memes.

We’ve gone over that a million times as to why rate hikes are not bad for gold, but I digress.

We really need to rally this week, or it will be three more weeks of pain.

And there’s plenty of economic speed bumps and potholes to navigate around this week.

To name a few:

  • Lot’s of Fed news including the minutes from last month’s meeting and a Fed Head Powell speech on Friday
  • Tuesday COT Report ‘repositioning’ and metals options expiration
  • Real estate data (new home sales & existing home sales)

The point here is that we have our plate full, and perhaps you have heard the old cliches – “sell in May and go away”. That’s generally a stock market term, but it looks like it could apply to the metals this year.

There’s also the term “summer doldrums”.

Ugh.

If there’s a bright spot, it’s that the metals have consistently rallied coming off of FOMC rate hikes, which next month is on June 13th, 2:00 p.m. EST. There’s no reason to think the metals won’t rally in a “sell the rumor, buy the news” fashion again.

And if the Fed doesn’t hike, well that’s good for gold too.

There is also the possibility that traders could front-run all this economic data and news, and if that’s the case then the metals could begin to rise before the FOMC, but I’m not holding my breath.

Let’s just see how we get through this week. We’ll know how things are by Friday that’s for sure.

So we’ll just have to see.

Bottom line: If we begin the rally this week, we get momentum, and if the rally gets put on hold, or if the metals have another bad week, then the cartel will firmly have the upper hand.

The dollar punched through 94 in the overnight session:

A strengthening dollar will surely act as a headwind for gold & silver.

But geez, how long is the greenback going to remain “overbought”?

It just keeps going, and going ,and going.

We’ll be watching the yield on the 10-year for insight:

We will be starting the week above 3.0%.

That’s new, and we’re about to see just how priced-in higher rates really are.

If the stock market it any indication, it looks like Wall Street is not liking the higher rates:

The S&P 500 looks like it could be rolling over.

Which is interesting, because the stock market even has the help of a newly subdued VIX:

Volatility has faded the move ever since the “Volpocalypse”, and we’ve been below the 200-day moving average for days now.

Interestingly, copper rose in the overnight session:

You see, the commodities and the dollar generally move in opposite directions – known as “inverse correlations”. If the correlation still holds, one of them is wrong. I’d say the dollar, because all indications are for a weaker dollar, and if it’s the dollar that has it wrong, we would see it breaking down soon. Especially if the commodities are going to keep rising.

Crude oil has been rising with the rising dollar, but crude has basically gone nowhere for three days:

Again, either the dollar or crude oil has it wrong – so it would be safe to assume a pullback in crude as the dollar continues rising, or a rise in crude with the dollar finally rolling over.

Palladium showed a little strength overnight:

This is nothing to write home about. We really need to see palladium working away at the moving averages, getting the 50-day rising again to cross up and through the 200-day.

But if platinum is a taste of what’s to come, it’s tasting very sour:

Whereas palladium rose in the overnight session, platinum has fallen in the overnight session and looks to be setting up for the seventh down day in a row.

Platinum is fast approaching oversold territory, but if platinum loses $872 to the downside, that will look very bearish and it could get a lot more oversold before it’s through falling.

Looking to the gold to silver ratio, we can see the top is clear:

That’s a textbook roll-over in progress. We now have 78s across the board.

I get it, it’s for the wrong reasons, but on the next rally, if silver finally begins to lead gold, then it will be for the right reasons, as in silver outperforming gold.

Gold is now down over 1.5% year to date:

Looking like it wanted to pivot over the last three days, we can clearly see the bearish candle that has formed in the overnight session.

If there is good news, gold is at risk of becoming “oversold” on the RSI.

You see, the dollar is screaming “overbought”, and gold is about to enter “oversold” territory.

Can it go on much longer than forecast?

It already has, hasn’t it?

At least the dollar anyway.

So we’ll see. Perhaps a flush out day with a drop below $1280, call it $1275, is just what we need to jump start this rally?

Silver is down nearly 3.7% year to date:

Again, this is not what anybody was calling for at the start of the year. Well, anybody except the haters, trolls, mainstream financial media and cartel.

They have succeeded thus far.

And we’ve had to endure half a year of pain.

What do we want to see from silver this week?

For starters, we need to get above the 50-day moving average on the quick, and then get above and close above $16.80 where the 200-day moving average is. Close above the 200-day today, tomorrow, or Wednesday, and breaking out above $17 with a close on the week above $17 is critical going into next week..

Let’s also look for some volume coming back in the market on that type of price action.

If we can get above $17.50 and close there, we’ll be above $18 in no time, and I get it, “Half Dollar, that’s only like a buck or a buck-fifty from here”.

Yeah. In the grand scheme of things, pretty pathetic.

But that’s the type of year it has been, so I’d take closing out the week above $17. Anything more would be a bonus.

We’re right at a critical point in time right here, right now, in this very week.

If we rally this week, we will have momentum on our side.

Momentum can be a powerful force in markets.

If we don’t rally this week, I will be wrong in the forecast I’ve held for weeks now, and the cartel will have the calendar and economic events on its side, and those are very powerful forces in the markets too, especially when those forces are at the fingertips of agents who stand at the ready to click into existence as many paper contracts as necessary to cap price.

This week will set the tone going into summer.

It’s make it or break it week.

Stack accordingly…

– Half Dollar

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

Beware “Snollygosters” and the Empty Promises of Pathological Politicians

Ma, 05/21/2018 - 15:02

Beware “Snollygosters” and the Empty Promises of Pathological Politicians

By Jeff Thomas of International Man

Snollygoster is an archaic term for:

“A fellow who wants office, regardless of party, platform or principles, and who, whenever he wins, gets there by the sheer force of monumental talknophical assumnancy.”

All right, that’s a rather antiquated definition, but then, “snollygoster” is a very antiquated term. It hasn’t been in use since the mid-1800’s.

Another definition is, “A shrewd, unprincipled person, especially a politician.”

So, of what interest is this bygone nomenclature to us today?

Well, the definitions are exactly in keeping with our present-day politicians. When we look at our senators, parliamentarians, presidents and prime ministers, we see that, even with the passage of considerable time, the term snollygoster is applicable today.

And, we, the constituents, could be referred to as “grumbletonians,” a word common in England in the 1600’s for those who are angry or unhappy with their government.

And we’re just as likely to be so exasperated with our political leaders that we resort to a “whipmegmorum” – a Scottish word from the 1700’s for a noisy quarrel about politics.

 

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These ancient and forgotten terms may be entertaining, but they may additionally raise a question in modern minds. We may ask ourselves, “Do you mean that it isn’t just that our present leaders are virtual cartoons – and destructive ones at that? Do you mean that (gulp) it’s always been this way?

…’Fraid so.

But, how is this possible? How is it that, regardless of the times we’re in, and regardless of whether we have literally hundreds of millions of citizens to choose from (in the larger countries), we end up with literal cartoon characters as leaders? Is it that we’re so bad at making a selection that we always choose the worst person?

Well, actually, there, the answer would be, “No.”

Voters don’t actively seek out the worst. The problem is that they’re presented with the worst. In the UK, we can complain about how useless Theresa May is; that she continually drops the ball and repeatedly acts with foolhardy overconfidence. But, if asked, “Would you rather have Jeremy Corbin?” those of us who grumble are likely to respond vehemently in the negative. (We don’t wish to jump from the pan into the fire.)

Similarly, across the pond in the US, Americans, including republicans, cannot help but laugh at their president as being an arrogant and petulant buffoon. (For the record, those of us outside the US also regard him as a source of perverse entertainment). Still, I expect that most of those same people, if asked whether they think Hillary Clinton would be closer to their ideal of the perfect leader, they’d emphatically say, “No.”

So, the problem is not that the voters “get the leader they deserve.” The problem is that the game is rigged – that there are no good choices. In a small country, it’s easy to introduce a candidate whom the electorate actually believe in, then to push him forward to victory. But, the larger the country, the more impossible it is for anyone who deserves a leadership position, to actually achieve it. (The system promotes its own kind.)

But, this notion presupposes that the majority of people within the political structure are already “contaminated,” that they, too are, for all practical purposes, undesirable. Can this actually be the case?

Again… ‘fraid so… But how is this possible?

Well, as long as we’re discussing definitions, there are two more that we might want to investigate. Let’s look at this one:

“A long-term pattern of abnormal behavior characterized by exaggerated feelings of self-importance, an excessive need for admiration, and a lack of understanding of others’ feelings. People affected by it often spend a lot of time thinking about achieving power or success.”

Well, that certainly fits virtually all political leaders and political hopefuls. This definition is used to describe “narcissistic personality disorder.” A fuller description is:

“Persistent grandiosity, excessive need for admiration, and a personal disdain for, and lack of empathy for other people… Arrogance, a sense of superiority… actively seeks to establish abusive power and control over other people… openly disregards the feelings and wishes of others, and expects to be treated as superior, regardless of their actual status or achievements… usually exhibits a fragile ego, an inability to tolerate criticism, and a tendency to belittle others in order to validate their own superiority.”

 

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Take a moment and ask yourself whether the above describes a leader near you.

And, here’s another interesting definition:

“A pervasive and persistent disregard for morals, social norms, and the rights and feelings of others. Individuals with this personality disorder will typically have no compunction in exploiting others in harmful ways for their own gain or pleasure and frequently manipulate and deceive other people, achieving this through wit and a facade of superficial charm.”

This is a definition for sociopathy, or “antisocial personality disorder.” To expand, sociopaths demonstrate a

“Disregard for right and wrong, persistent lying or deceit to exploit others, callous, cynical and disrespectful of others, using charm or wit to manipulate others for personal gain or personal pleasure, arrogance, a sense of superiority and being extremely opinionated… repeatedly violating the rights of others through intimidation and dishonesty, impulsiveness or failure to plan ahead, hostility, significant irritability, agitation… lack of empathy for others and lack of remorse about harming others, unnecessary risk-taking or dangerous behavior with no regard for the safety of self or others… failure to consider the negative consequences of behavior or learn from them.”

Initially, we may be tempted to say to ourselves, “Surely, it’s not as bad as all that.” But, if we really want to get an accurate picture, a useful exercise might be to picture a specific leader whose behaviour we’ve witnessed repeatedly and then read the above descriptions once again, whilst picturing his face.

The surprising truth is that many political leaders and political hopefuls display these characteristics exactly. Many are clearly narcissists, sociopaths, or both.

But, why should this be? Well, the easy answer is “obsessive behaviour.” Those who have the above disorders will literally do anything to achieve superiority over others and will have no remorse or regret whatever. Therefore, it’s perfectly predictable that, over time, any government will become populated by pathological individuals.

This is not a new occurrence. ‘Twas ever thus. The snollygosters have been a chronic dominant presence in governments for millennia. And they’ll continue to be dominant.

However, there is a positive takeaway here. If we recognise that this syndrome is in fact the norm, in any age, in any country, we can stop hoping for a hero to arise and save us from the parasitical dominance of governments. We can accept that, if we’re to thrive, this may only be accomplished through our own independence of mind and action, not through the empty promises of pathological leaders.

Courtesy of International Man

 

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News and Commentary

Weak Gold Hands Push for the Exits on Strong Dollar and Lack of Fear (Bloomberg.com)

Gold slips as U.S-China trade war put ‘on hold’ (Reuters.com)

U.S. Puts ‘Trade War’ Against China on Hold, Mnuchin Says (Bloomberg.com)

Turkey Repatriates All Gold From The US In Attempt To Ditch The Dollar (ZeroHedge.com)

America, Beware — Dollar Supremacy Is Not Forever (FT.com)

Central Bank Russia added 17 tons of gold to its reserves in April (Twitter.com)

Strong dollar is a stock-market drag and poses a threat to earnings growth (MarketWatch.com)

End of a Fiat Era Will Birth Beautiful Prosperity Worldwide (BusinessInsider.com)

Credit Card Delinquencies Spike Past Financial-Crisis Peak (WolfStreet.com)

 

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

18 May: USD 1,287.20, GBP 954.20 & EUR 1,091.16 per ounce
17 May: USD 1,288.85, GBP 952.07 & EUR 1,090.50 per ounce
16 May: USD 1,291.75, GBP 958.61 & EUR 1,093.60 per ounce
15 May: USD 1,310.05, GBP 966.42 & EUR 1,098.35 per ounce
14 May: USD 1,320.70, GBP 972.30 & EUR 1,101.86 per ounce
11 May: USD 1,324.80, GBP 978.23 & EUR 1,110.45 per ounce

Silver Prices (LBMA)

18 May: USD 16.39, GBP 12.16 & EUR 13.92 per ounce
17 May: USD 16.39, GBP 12.14 & EUR 13.90 per ounce
16 May: USD 16.26, GBP 12.07 & EUR 13.79 per ounce
15 May: USD 16.41, GBP 12.12 & EUR 13.77 per ounce
14 May: USD 16.65, GBP 12.25 & EUR 13.89 per ounce
11 May: USD 16.76, GBP 12.35 & EUR 14.04 per ounce


Recent Market Updates

– US 10-Year Surges, Emerging Markets Implode…Where Next for Gold?
– Welsh Gold Being Hyped Due To The Royal Wedding?
– Oil Price Is Going To Keep Rising And Inflation Is Coming
– Gold Price Manipulation – A Comprehensive Guide By James Rickards
– EU ‘Nightmare Scenario’ As Popular Anti-Euro and Anti-EU Government Takes Power In Italy
– “Oil price highest in 3 years, gold ready to follow”, by Daniel March
– Gold Mining Supply Globally Looks Set To Decline
– Gold Bullion Demand In Iran May Surge On Trump Sanctions
– “Money Is Gold — and Nothing Else”
– U.K. Home Prices Plunge 3.1% In April – Largest Monthly Drop Since Financial Crisis In 2011
– Weekly Gold Update – Gold In Dollars Lower Despite Poor US Jobs and Other Data
– Own Some Gold and Avoid Overvalued Assets
– Gold Demand Falls In Q1 Despite Robust Central Bank and Investment Demand and Surging Demand In Turkey and Iran

[KR1229] Keiser Report: Emerging Market Currencies

Su, 05/20/2018 - 04:56

In this episode of the Keiser Report, Max and Stacy discuss all heck breaking loose in emerging market currencies as the Fed tries to taper a ponzi and a parallel currency being proposed for Italy’s ruined economy. In the second half, Max interviews Marshall Long of EOS.fish about bitcoin mining, from the claims of environmental catastrophes to the assertions that miners are losing money at current bitcoin prices. They also discuss EOS and why it’s better than Ethereum.

Sustainability Boils Down to Scale

Su, 05/20/2018 - 03:38

Several conversations I had at the recent Peak Prosperity conference in Sonoma, CA sparked an insight into why societies and economies thrive or fail: It All Boils Down to Scale. In a conversation with a Peak Prosperity member who goes by MemeMonkey, MemeMonkey pointed out that social / economic organizations that function well at small scales (i.e. localized) fail when scaled up and centralized (i.e. globalized).

I was immediately struck by the impact of scale on markets (Capitalism) and the state (Socialism), an ideological spectrum I’ve written about recently.

Both markets and governance function well at a small scale because those making the decisions must absorb the consequences of their actions/choices.

In large-scale centralized systems, those at the top of the wealth-power pyramid who wield the greatest influence are typically immune from the consequences of their (self-serving) decisions.

Indeed, the entire point of centralized hierarchies is to buffer top decision-makers from the consequences of their actions and choices.

This ties directly into Nassim Taleb’s most recent popularization of the critical role played by participants having “skin in the game,” i.e. exposure to the consequences of their actions and choices.

In a small localized group, it’s basically impossible for anyone, even those at the top of the local welth-power pyramid, to escape the consequences of extractive activities that disupt the local ecosystem.

For example, should overfishing destroy the local fisheries, even the leaders no longer have access to fish.

Should the leadership pursue a conflict with a neighboring tribe, the leaders are just as likely to be killed or maimed as any participant (and very possibly more likely to be killed/injured, as leaders are naturally high-value targets).

History offers many examples of leadership that suffered the consequences of their poor choices/strategies. In the catastrophic Roman defeat at Cannae, roughly a third of Rome’s entire political leadership elite was killed in combat. This is the acme of “skin in the game,” a point Taleb makes by noting that our political leadership is free to pursue wars of choice with zero risk of being killed on the battlefield. No wonder it’s so “cost-free” for leaders of highly centralized hierarchies to pursue disastrous policies: they evade any of the consequences or blowback.

In a conversation with fellow Peak Prosperity scribe Davefairtex, Dave described the centrality of the reward structure of cheating: approximately 20% of the populace experiences an outsized positive brain-chemistry reward (dopamine release) when they get away with some form of cheating–passing off a lie or deception or successfully concluding a fraud or scam.

A similar percentage of humanity is genetically predisposed to experience outsized brain-chemistry rewards for detecting and revealing cheating.

Dave also noted that human groups (and primate groups including monkeys, chimpanzees, et al.) become very agitated when group standards of fairness are flouted.

Cheating–broadly speaking, what’s known as the “free-riding problem,” as cheaters get a free ride on the work of everyone who abides by the rules and fulfills their duties– pays dividends.

Males who father children via a secret tryst with a married woman pass on their genes without having to support their offspring or the mother. Cheaters who reap unearned wealth from the group benefit by slicing off some of the income and wealth of everyone else in the group.

So there are powerful incentives to cheat and equally powerful incentives to ferret out and expose cheaters, lest the group dissolve and everyone is tossed out to face the world (and potentially hostile groups) alone.

This conversation made me realize this is partly why small-scale markets and groups succeed: cheaters must work in a small theater where their actions are more easily observed and exposed. It’s therefore much more difficult to get away with systemic cheating in small-scale organizations.

Compare this to the vast centralized hierarchies that are the controlling dynamics of our socio-political-economic system (i.e. our Mode of Production). Cheaters at the top of the wealth-power pyramid hire slick attorneys to evade consequences, or they buy political influence/protection, in effect legalizing cheating by those at the top of the pyramid in systemic ways.

Once we grasp the critical role played by scale, we conclude that centralized hierarchies cannot function effectively because their scale makes it too easy and too rewarding for those at the top of the wealth-power pyramid to cheat and evade consequences.

Only small-scale markets and structures of governance can succeed in the long run because only these small scale systems can sustainably impose “skin in the game”– consequences, accountability and oversight.

State-issued currency (“money”) is the perfection of a centralized system: here is the Venezuelan national currency the bolivar, a once-stable currency obliterated by Venezuela’s political-economic elite:

 

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

US 10-Year Surges, Emerging Markets Implode…Where Next for Gold?

Su, 05/20/2018 - 02:44

US 10-Year Surges, Emerging Markets Implode…Where Next for Gold?

  • US 10-Year Yields Top 3%, US Dollar Pushes Higher
  • Brent Hits $80, Highest in 4 years
  • Emerging Market Chaos, the Lira and Peso in Freefall
  • Italy’s New CoalitionSignal their Plans,Yields Jump
  • Japanese Economy Contracts, GDP worst since 2015
  • And Where Next for Gold?

Weekly Update by Daniel March

Gold and silver ended the week down (USD -2.2%, GBP -1.4%, and EUR -0.5%) as rising US 10-Year yields (hitting a high of 3.12%), and a stronger dollar index, pressured the precious metals complex lower.

The major commodity to buck the trend was oil. Brent crude ending the week up 2.1%, touching $80 for the first time since 2014. (Charts courtesy of Stockchart.com)

In addition to Brent crude, lumber continues to press higher, and ended the week as one of the bestperforming commodities. It’s difficult to gauge the true fundamental picture in lumber however given the impact trade tariffs are having on the price, but coupled with the relentless push higher in oil is it perhaps a leading indicator of future inflation?

In other markets, stocks had a mixed week, with DJIA and Nasdaq ending lower, with the small-cap Russell 2000 pushing higher. The VIX remains the best performer,highlighting the uncertainty in the marketplace. With the industrial metals of copper, platinum and palladium all ending lower on future growth concerns from China.(Weekly performance by Finviz.com)

In emerging markets, Argentinareceived a short term reprieve on Tuesday when they ‘rolled over’ $26 billion of debt (known as Lebacs), and issued new debt totalling $200 billion. However, at rates between 38-40%, it raisesquestions on the long-term sustainability of such financing.

In Turkey, President Erdogun, continues to take an active role in managing monetary policyin an attempt to target growth at the expense of inflation – which now stands at 10.9%.The market has been unimpressedby the president’s attempts to micromanage policy, with Turkish Lira making new all time lows against the US dollar.

Click here to read full story on GoldCore.com.

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Holding T-Bills Now Pays 30x More Than Your Bank Savings Account

La, 05/19/2018 - 17:30

Back in November, by holding extremely conservative short-term (i.e., 6-months or less) Treasury bills, TreasuryDirect participants were receiving over 16x more in interest payments vs keeping their cash in a standard bank savings account.

Today, they’re now receiving over 30 times more. Without having to worry about the risk of a bank “bail-in” or failure.

So if you’re holding cash right now and NOT participating in the TreasuryDirect program, do yourself a favor and read on. If you’re going to pass on this opportunity, at least make it an ‘eyes-wide-open’ decision.

Click here to read the full article

[KR1228] Keiser Report: Capricious Nature of USD Empire

Pe, 05/18/2018 - 15:44

In this special double header episode of the Keiser Report, Max and Stacy discuss the capricious economic and financial policies of the United States that are even leading European allies to consider alternatives to the SWIFT system upon which much global trade currently relies. As the US has increasingly used its authority over the payments system to economically punish competitors, enemies and allies alike, many wonder if a more stable trade system might be found in a more neutral decentralized system. In the second half, Max interviews Gabriel Abed of Bitt.com about the future of cash and whether a stablecoin can help the economies of the Caribbean and neighboring islands.

Welsh Gold Being Hyped Due To The Royal Wedding?

Pe, 05/18/2018 - 14:52

Welsh Gold Being Hyped Due To The Royal Wedding?

– Welsh gold and the misconceptions surrounding it – GoldCore speak to China Central Television (CCTV)
– Welsh gold mired in misconceptions, namely that it is ‘rarest’ and most ‘sought after’ gold in world
– Investors to be reminded that all mined gold is rare and homogenous
– Nothing chemically different between Welsh gold and that mined elsewhere
– Investors led to believe Welsh gold is more valuable, despite lack of authenticity in some Welsh gold products
– Peak gold: We tell Beijing’s largest TV network that Welsh gold is limited but so too is gold everywhere

Editor: Mark O’Byrne

Video Source: Reuters CCTV via YouTube

Is ‘Welsh gold’ more valuable than gold mined from anywhere else? Some believe it is. Others believe this is just hype ahead of the big day for Harry and Meghan.

Since 1923 various members of the British Royal family have chosen to use Welsh gold in their wedding rings. Famous wearers include Queen Elizabeth II, her daughter Princess Anne, Princess Diana and the Duchess of Cambridge.

This, combined with the fact that there is no active Welsh gold mine today confers on “Welsh gold” a certain exclusivity.

The prices charged for Welsh gold very much play on this desire for it to be seen as the ‘rarest’ and most ‘sought after’ gold in the world.

In reality the rarest thing about it is the lack of Welsh gold in the jewellery and other items claiming to be “Welsh gold”.  Welsh gold jewellery made today is likely to contain far less than 1% of the exclusive metal. The rest of the piece will be made up of gold from elsewhere.

Click here to read full story on GoldCore.com.

 

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Oil Price Is Going To Keep Rising And Inflation Is Coming

Ke, 05/16/2018 - 15:18

by Dominic Frisby, Money Week

2018 has been a noisy year so far: stocks have been up, then down, then up, but ultimately gone nowhere.

Precious metals are a little lower than where they started. Bonds are quite a bit lower. Crypto currencies are a lot lower.

 

Oil supply and demand chart (Money Week)

There’s been babble and squawk about all of them.

But one normally clamorous asset has quietly ground upwards.

And that asset is oil.

The stealth bull market in oil continues
Back in early 2016 I called oil my “trade of the lustrum” (a lustrum is a five-year period – it’s an almost criminally underused word). With West Texas Intermediate oil (WTIC) at $33 a barrel, and Brent crude oil at $36, we said “buy, hold and forget”.

The wager has been a good one. With the usual wobbles along the way, oil has steadily ground higher so that now, two years on, WTIC stands at $71 and Brent at $79.

On revisiting the trade along the way, we’ve noted that this is a stealth bull market, and stealth bull markets are the best kind of bull markets, because few people are talking about them.

But this is the bottom line: it’s a bull market. Bull markets are to be involved in, not stared at. You want to have some oil exposure in your portfolio. It’s that simple.

Previous oil bull markets have been accompanied by powerful narratives: the explosion of the Asian middle class – especially in China – means huge demand. A dearth of new discoveries in readily-accessible locations means the end of cheap oil. Oil production has peaked; it declines from here. We are past Peak Oil.

Instead we’ve seen technological advances which have seen the US become the world’s largest oil producer. Production is no longer such an issue, apparently. New battery technologies and electric cars have been the hot topics. And as for the Asian middle classes and their new-found wealth – they appear to have disappeared, for all you read about them.

Of course, the Asian middle classes have not disappeared. They are now richer than they were during the bull market of the 2000s. There are many more of them. And, despite what you may hear about the vehicles of the future, the vehicles of the present run on oil.

Supply may have increased, but so has demand. Demand is growing all the time and it exceeds supply, as this chart from the International Energy Agency (IEA) shows.

There will be wobbles along the way; there always are. Indeed, measures of momentum such as RSI (relative strength index) and MACD (moving average convergence/divergence) both show oil to be overbought and due a pullback.

But this is a trend, my friends, and my trade-of-the-lustrum advice remains in play: buy, hold, forget.

Oil bull markets end with a great deal of noise. This one has not got noisy yet.

I should say it’s all the more impressive in 2018 for the fact that the oil price has quietly carried on rising, even as the US dollar has strengthened.

By the way, the fact that Treasury bond yields have been rising in the US at the same time as oil makes the macro theory that the financial backdrop has changed from one of deflation to one of inflation all the more credible.

More and more, the theme of inflation seems to be making itself present in our lives once again.

Full Money Morning article including the best way to play rising oil prices here

 

News and Commentary

Gold crawls up on safe-haven support; dollar limits gains (Reuters.com)

Asian Stocks Decline With U.S. Yield Around 3% (Bloomberg.com)

Dow aims for 8-day win streak as trade worries fade (MarketWatch.com)

U.S. Stocks Mixed as Treasuries Slip, Oil Gains: Markets Wrap (Bloomberg.com)

Eisman of ‘The Big Short’ Fame Recommends Shorting Deutsche Bank (Bloomberg.com)


Source: Bloomberg

Gold Price Manipulation Best Summary – James Rickards (Gata.org)

Credit-Driven Train Crash (GoldSeek.com)

A Crypto Tycoon, Banking Heir and the Mysterious Fight for Gold (Bloomberg.com)

The property market is about to be swept up in a whirlwind (Telegraph.co.uk)

Keep buying gold as long as it’s above this key level (CNBC.com)

 

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Gold Prices (LBMA AM)

14 May: USD 1,320.70, GBP 972.30 & EUR 1,101.86 per ounce
11 May: USD 1,324.80, GBP 978.23 & EUR 1,110.45 per ounce
10 May: USD 1,314.80, GBP 969.27 & EUR 1,106.80 per ounce
09 May: USD 1,306.85, GBP 965.11 & EUR 1,102.07 per ounce
08 May: USD 1,310.05, GBP 969.44 & EUR 1,101.88 per ounce
04 May: USD 1,309.35, GBP 965.78 & EUR 1,094.09 per ounce
03 May: USD 1,313.30, GBP 966.19 & EUR 1,094.64 per ounce

Silver Prices (LBMA)

14 May: USD 16.65, GBP 12.25 & EUR 13.89 per ounce
11 May: USD 16.76, GBP 12.35 & EUR 14.04 per ounce
10 May: USD 16.60, GBP 12.24 & EUR 13.97 per ounce
09 May: USD 16.44, GBP 12.12 & EUR 13.84 per ounce
08 May: USD 16.45, GBP 12.17 & EUR 13.85 per ounce
04 May: USD 16.42, GBP 12.10 & EUR 13.72 per ounce
03 May: USD 16.47, GBP 12.12 & EUR 13.74 per ounce


Recent Market Updates

– EU ‘Nightmare Scenario’ As Popular Anti-Euro and Anti-EU Government Takes Power In Italy
– “Oil price highest in 3 years, gold ready to follow”, by Daniel March
– Gold Mining Supply Globally Looks Set To Decline
– Gold Bullion Demand In Iran May Surge On Trump Sanctions
– “Money Is Gold — and Nothing Else”
– U.K. Home Prices Plunge 3.1% In April – Largest Monthly Drop Since Financial Crisis In 2011
– Weekly Gold Update – Gold In Dollars Lower Despite Poor US Jobs and Other Data
– Own Some Gold and Avoid Overvalued Assets
– Gold Demand Falls In Q1 Despite Robust Central Bank and Investment Demand and Surging Demand In Turkey and Iran
– Smart Money Diversifying Into Gold – One Billionaire Invests Half His Net Worth
– “Blood In The Streets” Of U.S. Gold Bullion Market As Sale Of Gold Coins Collapse
– Most Important Chart Of The Century For Investors?
– Gold Mining Shares Are Speculative Making Gold Bullion A Better Investment

[KR1227] Keiser Report: Fracking and Russian Trolls

Ti, 05/15/2018 - 20:38

In this special double header episode of the Keiser Report, Max and Stacy compare the real data and future for fracking using actual balance sheet results and investor complaints on the absence of any profits as of yet. From Bloomberg and CNBC, headlines warn that fossil fuels face squeeze as the cost of renewables plunge and just as the surge in natural gas supply from fracking absolutely obliterated the entire coal industry, so too will solar do the same to fracking. And, when the fracking operators can’t even pay the interest on their ‘credit cards’ from revenues, the future in a rising interest rate world doesn’t look bright.

Gold Manipulation – A Comprehensive Guide to “Paper Manipulation” by James Rickards

Ti, 05/15/2018 - 14:18

Gold Price Manipulation – A Comprehensive Guide By James Rickards

In his latest book, “The New Case for Gold,” fund manager, geopolitical analyst, and financial letter writer James G. Rickards may have summarized the international gold price suppression scheme better than anyone, including GATA itself.

Indeed, the book’s sub-chapter titled “Paper Manipulation” is so expert, specific, and compelling that your secretary/treasurer today asked Rickards and his publisher, Penguin Publishing Group, for permission to share it with you, though it is far longer than excerpts for which reprint permission is customarily granted.

Your secretary/ treasurer argued that the sub-chapter is really a historic document, containing information the world simply must have if it ever is to achieve free markets and a more democratic financial system.

 

Rickards and Penguin quickly and most generously granted the request and provided PDF copies of the subchapter’s 15 pages. A link to them is appended. (The pages are excerpted from “The New Case for Gold” by James Rickards, in agreement with Portfolio, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC, and are copyright 2016 by James Rickards.)

Remarkably, the book is available through Amazon for less than $11 and your secretary/treasurer enthusiastically recommends it.

Here is your secretary / treasurer’s summary of Rickards’ outline of gold market manipulation:

— It can be done by what gold market observers like to call “banging the close” in the Comex futures market, where there is huge leverage in trading and little transparency for buyers and sellers.

— Big banks that are “authorized participants” in the gold exchange-traded fund GLD can use their exclusive access to the fund’s metal for market rigging.

— Gold from the U.S. gold reserve and the gold reserves of other countries may be leased, leveraged, or sold.

Leasing of unallocated gold — that is, paper gold, gold credits, imaginary gold — by bullion banks allows them to sell the same gold as much as 10 times over to 10 different buyers.

— “A central bank,” Rickards writes, “can lease gold to one of the London Bullion Market Association banks, which include large players like Goldman Sachs, Citibank, JPMorgan Chase, and HSBC.

Gold leasing is often conducted through an unaccountable intermediary called the Bank for International Settlements. Historically, the BIS has been used as a major channel for manipulating the gold market and for conducting sales of gold between central banks and commercial banks.

Click here to read full story on GoldCore.com.

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A Funny Thing Happened on the Way to Market Complacency / Euphoria

Ma, 05/14/2018 - 19:27

A relatively reliable measure of complacency/euphoria in the stock market just hit levels last seen in late January, just before stocks reversed in a massive meltdown, surprising all the complacent/euphoric Bulls.

The measure is the put-call ratio in equities. Since this time is different, and the market is guaranteed to roar to new all-time highs, we can ignore this (of course).

Two of the more reliable technical patterns are falling/rising wedges, also known as descending/ascending wedges or triangles. Ascending wedges are bearish, descending wedges are bullish.

The VIX index, one measure of volatility, has been crushed by the recent euphoria/complacency as participants realize that since this time is different, we don’t need no stinkin’ hedges. Unsurprisingly, the VIX has traced out a falling wedge:

But a funny thing happened on the way to market complacency/euphoria this year: every “this time is different” manic rally in the S&P 500 (SPX) formed a bearish rising wedge which promptly reversed once the pattern peaked.

Fortunately for Bulls, none of this matters. Fundamentals trump technicals (heh), and since profits are soaring while wages stagnate (funny how that works, isn’t it?), higher oil prices mean something or other that’s positive (it can’t be higher gasoline prices are good, can it? Must be something else), Facebook has recovered from its temporary swoon and the Fed is easing or tightening or doing whatever it’s doing, so it’s a clean sweep: the fundamentals are all rip-roaring good.

Oh wait a minute–technicals do matter–when they support the Bullish case.The descending trendline from the January highs was just broken to the upside, a clear technical signal that new all-time highs are essentially guaranteed–not later this year, but this month–maybe this week, so buy buy buy, you snooze you lose, don’t fight the Fed, etc. (insert your Bullish aphorism of choice).

Even more compelling (if that’s even possible), the quatloo-bat guano ratio just flashed a huge buy signal, something that only happens on 1.3% of trading days since 1968, so let me repeat: BUY BUY BUY (repeat your Bullish aphorism of choice). 

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format. 

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Winds Of Change: Recent Dollar, Gold & Silver Trends Are Changing As Prevailing Winds Shift

Ma, 05/14/2018 - 16:16

On the events calendar, we see two important pieces of data mid-week:

Retail Sales comes out on Tuesday and Industrial Production comes out on Wednesday.

Retail sales are important because we live in what is often labeled as a “70% consumption based” economy. The number tomorrow will help us get a sense of just how tapped-out the American consumer is. Industrial Production is important because that is a measure of how much stuff is manufactured in the economy, as well as how much stuff is mined out of the earth, and how much electricity and gas are used. In other words, if we want to MAGA, we’re going to need industrial production to start picking up in a meaningful way.

We’ve got a regular volley of Fed Head speeches this week – not shown is Thursday and Friday, but rest assured, they’re on the calendar.

If there was a theme for this week, I would call it “winds of change”.

For example, check out the dollar:

Did the dollar top out at my 93 target?

Overnight action and into this morning has shown U.S. dollar weakness – winds of change.

The S&P is up six days in a row going into today:

If the dollar party is over, I’m not expecting the S&P to just surge on up to new all-time highs.

See, the dollar is not the safe haven it once was. It is now more of an individual player in the midst of currency wars and money printing and all those controls the government and central banks like to put on the economy.

If the dollar is rising, it makes the U.S. stock market more attractive, because in addition to currency gains, there can be capital gains in the form of rising equity (which explains in part why we’ve seen a bounce in the S&P).

Here’s a question: If the dollar starts falling, half of the enticement of the U.S. stock market is gone, so are the indices just going to keep rising?

The winds of change appear to be coming to the VIX as well:

The VIX has been steadily declining as the dollar has been gaining.

What happens once the dollar starts falling and people realize the stock market may not be the great deal everybody thinks it is because there’s no longer the currency appreciation, so an overvalued and expensive stock market just became even more so?

What happens is volatility can come back as people re-asses their investment decisions.

We already have what looks like a bottom forming in the VIX around 13.

We’ll see.

And all of this means that we’re either going to get a break-out or a break-down in yield:

Notice how intertwined the markets are: If we get a break-out in yield, modern portfolio theory suggests that bonds become more attractive because of the “risk-free” nature of the returns. If an investor can get risk free returns rather than having to speculate in the stock market, the investors will move money from stocks to bonds.

If we get a break-out in yield, we could see a break-down in the markets, especially because a break out would get us moving through and beyond 3.0%.

Commodities have been mixed.

Copper is not sure what to make of all of this:

A weaker dollar is generally supportive of the copper price, yet overnight and into this morning we have a notable down candle forming on the daily chart.

Though crude looks like it is holding and set to open higher than Friday’s close:

Crude looks like it has some consolidating to do at this level, but with everything that went on in Iran, Israel and Syria last week, we could get geo-political factors influencing the price of crude as well.

Palladium looks like its going to ride the 200-day moving average:

However, with the technicals turning bullish, we’ll keep in line with the theme here – winds of change.

Platinum is still trying to just get above its 50-day moving average:

This is the third day of set-up to test that critical resistance. We’ll see if it can get up and through the level this week.

Gold and silver are mixed in a way that could see the gold to silver ratio back to an 80-handle:

The set-up is clearly there for the ratio to come down, but with the way the metals are opening the week, it might be going back above 80 first.

Gold held in there last night and this morning (so far) and looks to open between “unch” to slightly above Friday’s close:

We want to see gold work on getting above its 50-day moving average this week.

Silver, on the other hand, is down overnight and into the morning pre-market session:

But if the dollar is falling, which it is, then silver is not in a particularly natural direction, all things considered, but it does make sense when assuming these markets are not natural.

They are not natural.

So looking ahead this week, the theme can be winds of change.

That means more of the same as these trends finish running their course and the new trends take hold.

You know when how it’s springtime, and one day you wear shorts because it is nice and sunny, and the next day you wear jeans because it is cooler, and the day after that it rains all day long?

Yeah, kinda like those winds of change.

As in these markets are sorting themselves out this week, with the latest moves running their courses.

I still think the rally in gold & silver begins in earnest next week, not this week.

But that is assuming there are no economic black swans, or political or geo-political tensions.

That said, prepare for all sorts of surprising and not so surprising weather because these are the winds of change.

Could it clear up by Wednesday?

Perhaps, but I’m still keeping my rain jacket within arms reach all week long.

Just in case it doesn’t clear up.

Stack accordingly…

– Half Dollar

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

‘Nightmare Scenario’ For EU In Anti-Euro Italy

Ma, 05/14/2018 - 14:59

Firebrand populists of Left and Right are poised to take power in Italy, forming the first “anti-system” government in a major West European state since the Second World War.

Source: Wikimedia Commons

Leaders of the radical Five Star Movement and the anti-euro Lega party have been meeting to put the finishing touches on a coalition of outsiders, the “nightmare scenario” feared by foreign investors and EU officials in equal measure.

The unlikely allies vow a blizzard of contentious measures, threatening to cancel VAT rises, overturn key market reforms, introduce a universal “basic income” for the poor, and launch a fiscal blitz in open defiance of EU spending rules.

The formation of such a government – which could will stiffen German resistance to any form of EMU union or debt pooling. It effectively dooms the Macron plan for a eurozone budget, leaving monetary union as vulnerable as ever going into the next global downturn.

Earlier proposals included the creation of a parallel currency or “fiscal certificate”. This would be based on perpetual treasury notes to cover €70bn (£62bn) of tax rebates and funds owed to state contractors. It is a way to inject liquidity into the economy, and to reintroduce the lira by stealth.

The scheme would – if ever enacted – subvert the monetary control of the European Central Bank and destroy German political consent for the single currency. It ultimately renders the euro structure unworkable.

“It is not going to be so revolutionary from the beginning. Nobody expects us to come out of the euro on day one, but what we will have is the first free government in Italy for many long years .”

Full article on The Telegraph here (must register)

 

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[KR1226] Keiser Report: 10 Years After Financial Crisis of 2008

Su, 05/13/2018 - 19:23

In this episode of the Keiser Report, Max and Stacy reflect on the data and charts from 10 years after the financial crisis of 2008. Post-crisis and during the span of the Obama administration, the top 1% got much richer while the bottom 90% got very, very much poorer. The data doesn’t lie. In the second half, Max interviews Mish Shedlock of MishTalk.com about the economic and inequality disaster that central banks have wrought. They also discuss the latest jobs and GDP numbers.

“Oil price highest in 3 years, gold ready to follow”, by Daniel March

La, 05/12/2018 - 19:00

“Oil price highest in 3 years, goldready to follow”, by Daniel March

  • S. withdraws from Iran nuclear deal
  • Oil jumps past $70
  • Argentina hikes interest rates to 40%
  • S. 10 year disparity
  • Western buying returns to gold

Gold and silver both ended slightly up in a week dominated by heightening geopolitical news, weakening inflation data, and emerging market concerns.With gold closing the week at $1,318 (up 0.28%), €1,104 (0.37%), and £973 (0.2%).

In sterling, gold was up strongly on Thursday following the BOE’s decision not to raise rates, and from the weaker than expected industrial production data.

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

On Tuesday the U.S. pulled out a nuclear deal with Iran with oil jumping on the news, pushing past $70 for the first time since November 2014. In other markets, the move was less pronounced, prompting suggestions the move in oil was more over concerns of losing production (at a time of already falling crude inventory), rather than from the geopolitical event itself.

However, with middle east tensions rising by the day, the geopolitical risk remains extremely high. With the main question remaining, will gold soon follow oil’s move higher as investors seek protection in the world’s premium safe haven asset?

Economic data this week came in worse than expected, with inflation readings of 0.1% vs consensus of 0.2%. The market was initially unmoved following the PPI release on Tuesday, but once CPI confirmed the prospect of weakening inflationary pressures on Thursday, both gold and silver reacted along with the rest of the commodities sector, including platinum, palladium and copper, all ending the day notably higher.

Stocks were one of the best performing assets this week, with U.S. indices up between 2-3%, with investors in the short-term moving back into risk assets. The U.S. dollar ended the week flat (up 0.02%), giving back early weak gains from the miss in inflation, and talk of ‘profit taking’. Yields, like the dollar, started the week strong but ended the week down 0.27%. Full weekly performance, courtesy of Finviz.com.(https://finviz.com/futures_performance.ashx?v=12)

Emerging marketscontinuedto deteriorate this week, with Argentina and Turkey notably effected. Argentina has recently hiked interest rates to 40% in an attempt to stabilise a freefalling peso,and is currently seeking assistance from the IMF to avoid outright default.Turkey are taking similar measures, albeit not so aggressive, but still in attempt to fight soaring inflation at 11%

A strong U.S. dollar, and bond yield (when compared to global peers), is the main catalyst behind the deteriorating situation. During the expansionary period, following the 2008 financial crisis, low interest rates and an abundant supply of fresh Central Bank liquidity allowed easy money to flow into the emerging markets.But as U.S. yields went up, so too did the funding costs, making emerging market investments a less attractive prospect, causing capital to flow out of these markets and back into the ‘perceived’ safety of a 3% return in the U.S.

Highlighting the disparity in global yields,only Greece, Mexico, India and Brazil currently pay more than the U.S. to service their 10 year debt – quite a startling statistic for the world’s reserve currency.

https://tradingeconomics.com/bonds

While Fed members have indicated they are staying put on their current ‘dot plot’ rate hike trajectory, at some point they will need to take note of the growing yield disparity.It’s this writer’s view that if the spread continues to widen, and the effects start to begin to spill over into the wider economy, the Fed will be forced to take action andrealign to a more accomodativeglobal policy – all ofwhich is a bullish prospect for the precious metals complex.

Taking a look at the latest fundamental developments, the WGC have released their ETF inflow/outflow data this week, with the report showing strong growth in April.

“Global gold-backed ETFs holdings added 72.2 tonnes (t) to 2,481t in April. This is the strongest month of net inflows in more than a year. Growth in global holdings was les by significant North American and European inflows and supported by a small increase in Asia“(https://www.gold.org/data/gold-etf-holdings)

While the latest data represents the largest monthly inflow since February 2017, more importantly it shows North American and European buyers coming back into the market. Western demand has long been regarded as the key to higher gold pricing, and while this is first significant inflow from the west this year, should this trend continue it has bullish implications moving forward.

From a technical perspective, we can see gold has found significant support at 200 day moving average ($1307), while building positive momentum that looks poised to breakout to the upside.

Should gold push higher from here, key resistance will be at the $1360/$1370 level, an area gold continues to test. (Charts courtesy of Stockchart.com)

In silver we can see the 200 day moving average ($16.81)acting as resistance. However, just like gold, positive momentum is building.

Key resistance for silver will be at $17.30, and then $17.70, with further resistance at the psychological $18 level. Given the bullish technical picture in both gold and silver, and improving COT positioning,means we a likely building a base here, for a more substantial move higher.

The U.S. is meeting with North Korea this weekend, in an attempt to forge a long standing agreement. With the U.S. withdrawing from the Iran nuclear deal this week, it will interesting to see if this impacts the North Korean’s willingness to enter into such a deal. As always the key will be in the detail

In Europe, Italian bond yields continue to climb on the prospect of an anti-establishment coalition coming to power, with the League and 5-star movement party making significant steps towards forming government.Their final policiesare an unknown factor for the markets, but withItaly the 3rd largest economy in Eurozone, investors should take note of the Italian yield, and more importantly yields in the rest of the Eurozone, for signs on how the situation is developing.

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

On economic data next week, investors should pay close attention to ‘Retail Sales’and the ‘Philadelphia Fed Manufacturing Index’ for further signs of weakness, April ‘CPI’ from Europe for the latest on inflationary pressures, andApril’Industrial Production’ from China for an update on global growth.

These events, plus developments in the middle east, will help shape the near term direction in the dollar, bonds, stocks, and more importantly the next direction for gold and silver.

And finally, a quick look to the key FOMC meeting next month, and the latest Fed Futures pricing (a tool from the CME to indicates future rate hike probabilities). Where, as of the 12th May, the market is pricing a 100% chance of a rate hike June

(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html)

Given the market is pricing the event as a certainty means there’s a good chance we could be setting up for disappointment,where gold sells off in the run up the meetingonly to rally on the news. A play gold has followed many times on recent rate hike announcements.

All of which means the prospect for the seasonal ‘summer doldrums’ (a seasonal phenomenon discussed last week 5th May) may be short lived, and the buying opportunity in gold may come a lot sooner than many people expect.

News and Commentary

PRECIOUS-Gold eases on firmer dollar; but eyes first weekly gain in four (Reuters.com)

Gold steady as dollar hovers below 2018 peak (Reuters.com)

Bottom in place? Gold jumped to 10-day high (FXStreet.com)

U.K. House-Price Gauge Drops to 5 1/2-Year Low as London Slumps (Bloomberg.com)

London house prices predicted to keep falling (CityAM.com)


Source: US Funds

Gold Love Trade Looks Promising in India and China (USFunds.com)

The Wealthy Are Hoarding $10 Billion of Bitcoin in Bunkers (Bloomberg.com)

Gold Gets a Lifeline From a Surprising Source: Cheap Flights and Cars (Bloomberg.com)

Putin Wants to `Break’ With the Dollar But Dumps Euros Instead (Bloomberg.com)

The 1970s All Over Again? Part 1: The Middle East Explodes (GoldSeek.com)

Central Banks: The Great Experiment Has Failed (DailyReckoning.com)

 

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

10 May: USD 1,314.80, GBP 969.27 & EUR 1,106.80 per ounce
09 May: USD 1,306.85, GBP 965.11 & EUR 1,102.07 per ounce
08 May: USD 1,310.05, GBP 969.44 & EUR 1,101.88 per ounce
04 May: USD 1,309.35, GBP 965.78 & EUR 1,094.09 per ounce
03 May: USD 1,313.30, GBP 966.19 & EUR 1,094.64 per ounce
02 May: USD 1,310.75, GBP 960.52 & EUR 1,091.99 per ounce

Silver Prices (LBMA)

10 May: USD 16.60, GBP 12.24 & EUR 13.97 per ounce
09 May: USD 16.44, GBP 12.12 & EUR 13.84 per ounce
08 May: USD 16.45, GBP 12.17 & EUR 13.85 per ounce
04 May: USD 16.42, GBP 12.10 & EUR 13.72 per ounce
03 May: USD 16.47, GBP 12.12 & EUR 13.74 per ounce
02 May: USD 16.35, GBP 11.98 & EUR 13.62 per ounce


Recent Market Updates

– Gold Mining Supply Globally Looks Set To Decline
– Gold Bullion Demand In Iran May Surge On Trump Sanctions
– “Money Is Gold — and Nothing Else”
– U.K. Home Prices Plunge 3.1% In April – Largest Monthly Drop Since Financial Crisis In 2011
– Weekly Gold Update – Gold In Dollars Lower Despite Poor US Jobs and Other Data
– Own Some Gold and Avoid Overvalued Assets
– Gold Demand Falls In Q1 Despite Robust Central Bank and Investment Demand and Surging Demand In Turkey and Iran
– Smart Money Diversifying Into Gold – One Billionaire Invests Half His Net Worth
– “Blood In The Streets” Of U.S. Gold Bullion Market As Sale Of Gold Coins Collapse
– Most Important Chart Of The Century For Investors?
– Gold Mining Shares Are Speculative Making Gold Bullion A Better Investment
– Gold Price Increasingly Influenced By Declining Dollar Rather Than Interest Rates
– Cash “Vanishes” From Bank Accounts In Ireland

[KR1225] Keiser Report: Social Media Surveillance Capitalism

La, 05/12/2018 - 03:25

In this episode of the Keiser Report, Max and Stacy discuss the ‘turds’ ‘harvesting baby brains’ in the cryptocurrency markets, according to Charlie Munger, the 94-year-old billionaire, partner of Warren Buffett. Max and Stacy note that bitcoin was a direct response to the financial system created by the likes of Buffett and Munger so it makes sense that they would react more and more wildly against cryptocurrencies that mock their legacy. In the second half, Max continues his interview with Michael Krieger about social media surveillance capitalism and The Road to 2025.

How Safe Are We? Our Blindness to Systemic Dangers

Pe, 05/11/2018 - 22:12

If you’ve bought a new vehicle recently, you may have noticed some “safety features” that strike many as Nanny State over-reach. You can’t change radio stations, for example, if the vehicle is in reverse. Who knows who or what you’ll run over in reverse if you were allowed to change radio stations while in reverse gear?

How many injuries can be traced to people changing radio stations while in reverse?

A friend recently told us that the California Legislature is considering a law that makes it legal for parents to let their children walk to school unattended.

Perhaps this is “fake news,” but it’s certainly plausible, given that leaving any child unattended is now viewed as not just irresponsible but criminal.

How the Free-Range Kids Movement Is Helping Parents Embrace Their Libertarian Side

The mainstream “news” is chockful of worried-looking news anchors announcing another e coli outbreak or recall of a consumer product, many of which now sport absurd warnings, including scary-sounding ones such as “This product contains chemicals known to the state of California to cause cancer.”

This is scary until you realize it’s on practically every consumer product in the state of California, which mandates the warning.

The narrowness of this obsession with safety comes into focus if we ask: how can a society so obsessed with safety have spawned an opioid addiction crisis that kills tens of thousands of people and ruins the lives of millions of Americans?

How safe are we when products that addict millions and kill thousands are readily available via prescription within our healthcare system?

While addictive illegal drugs have long been targeted with extremely harsh criminal penalties, how is it that the legal drug industry and the officially sanctioned and regulated healthcare industry created the vast destruction of the opioid crisis without anyone tasked with “safety” noticing?

How do we explain our obsession with relatively low risk dangers and our collective blindness to manufactured/marketed scourges that kill tens of thousands of people annually? (Tobacco and alcohol come to mind.) Then there’s the well-documented impact of rising wealth and income inequality on public health–for example, The Health Effects of Income Inequality: Averages and Disparities.

Several dynamics come to mind: the immense profitability of products such as tobacco and synthetic opioids, and the profitability of fear-inspiring content in terms of attracting eyeballs to media and social media engagement. Fear gets our attention and is thus a powerful marketing tool.

In other words, there are built-in incentives in our system to profit from dangerous products, and influence government regulators to overlook the dangers.

I also wonder if our narrow obsession with low-risk safety (warnings on everything, etc.) reflects a subconscious awareness of rising systemic insecurity, which we counter by regulating what can be easily regulated in terms of manufactured consumer products. This gives us a sense of control in a world in which our ability to control systemic risks is decaying.

Adding regulations aimed at increasing safety/reducing risk also gives elected officials an opportunity to say “we’re doing something useful here to protect you.”

It’s well established that our innate ability to assess risk is limited; we tend to exaggerate some kinds of risk (being attacked by sharks while swimming, etc.) and under-estimating other kinds of risk (eating junk food, getting addicted to prescription painkillers, etc.)

As a result, a single tragic accident caused by someone changing radio stations while in reverse gear can trigger a new law/regulation (“we should make it impossible to change radio stations while in reverse, as this will preclude any more of these preventable tragedies”), we don’t recognize the systemic tragedy of the loss of positive social roles that fuels much of the despair and pain that we treat with addictive prescription painkillers.

There is a terrible irony at work: We live in a system in which an opioid-addicted individual whose life has been devastated by an entirely preventable systemic scourge can put his/her car in reverse with less likelihood of injuring others, if the vehicle is new enough to have all the mandated safety features–and we pat ourselves on the back for our obsession with preventing injury.

Assessing risk and improving safety are complex issues, but we clearly have a political-social-economic system that is blind to systemic dangers that could be prevented, were we to widen our narrow obsession with safety to include them.

 

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format. 

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Sivut