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7.25.17 - Elites Are Privately Warning About A Crash

Gold last traded at $1,252 an ounce. Silver at $16.54 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday ahead of economic clues from Wednesday's Fed statement. U.S. stocks rose on better-than-expected corporate earnings.

Gold retreats from 1-month high as Fed meets -Reuters
"Gold prices retreated from a one-month high on Tuesday as equities gained and the markets awaited clues about monetary policy from the U.S. Federal Reserve, which began its two-day meeting. The market is not expecting an interest rate increase following the Fed's two-day meeting, but it is looking for hints on the timing and extent of future moves....'The market is looking for clarity on the Fed's tightening cycle and when they are going to start with the tapering (of monetary stimulus),' said ETF Securities analyst Martin Arnold....'There is a dual-pronged attraction to gold at the moment, with low interest rates and investors looking at the metal as a hedge against U.S. political uncertainty,' Arnold said. Gold is often seen as an alternative investment during times of political and financial uncertainty."

stocks Wall Street bracing for 'significant correction' -CNBC
"When it comes to both fiscal and monetary policy these days, Wall Street looks to be expecting less. Respondents to the CNBC Fed Survey have marked down their expectations for Federal Reserve rate increases and for fiscal policy stimulus from Congress and the Trump administration. And there's growing worry that the stock market could be set up for a fall. 'Asset markets are very highly priced and investors are complacent,' said Mark Zandi, chief economist of Moody's Analytics. 'The pre-conditions for a significant correction in markets are coming into place.' The 44 respondents to the survey, including economists, fund managers and analysts, unanimously believe the Fed won't hike interest rates at its meeting this week....Respondents also are dialing back what they expect from the Trump administration and Congress....'The Trump trade has evaporated,' said Neil Dutta, head of economic research at Renaissance Macro Research."

The Elites Are Privately Warning About A Crash -Zero Hedge
"Many everyday citizens assume powerful global financial elites operate behind closed doors in secret conclaves, like the scene of a Spectre board meeting in the recent James Bond film. Actually, the opposite is true. Most of what the power elite does is hidden in plain sight in speeches, seminars, webcasts and technical papers. These are readily available from institutional websites and media channels....Mohamed A. El-Erian is a bona fide member of the global power elite...Yet he writes in a fairly accessible style on the popular Bloomberg website. When El-Erian talks, we should all listen. In a recent article he raises serious doubts about the sustainability of the bull market in stocks because of reduced liquidity resulting from simultaneous policy tightening by the Fed, European Central Bank (ECB) and the Bank of England. He says stocks rose on a sea of liquidity and they may crash when that liquidity is removed. This is a warning to other elites, but it’s also a warning to you....what does the head of Singapore's GIC say about markets today? Lim Chow Kiat, CEO of GIC, warns that 'valuations are stretched, policy uncertainty is high' and investors are being too complacent....Meanwhile, the typical American small retail investor probably has 60% or more of her 401(k) in developed economy equities, mostly U.S....The solution to this is to allocate 10% of your investable assets to physical gold or silver. That will be your insurance when the time comes."

Student loan borrowers, herded into default, face a relentless collector: the U.S. -Reuters
"Today, 11 percent of the $1.325 trillion of federal student loans outstanding is severely delinquent or in default, higher than the mortgage default rate at the peak of the foreclosure crisis in 2010, according to data from the Federal Reserve Bank of New York. Some of these debtors are deadbeats, of course, unwilling to make payments they can afford. But many are borrowers of limited means who ended up in default unnecessarily, after Navient and the DOE’s other servicers steered them away from affordable repayment plans and into options that reduce the servicers’ costs, according to state and federal investigators and regulators, consumer advocates and a growing number of lawsuits and complaints filed against loan servicers....Since the summer of 2015, student loan servicers and private debt collectors have garnished about $3 billion in wages, a Reuters review of federal data shows....The number of Americans who have had their wages or Social Security benefits garnished or their tax refunds seized jumped 71 percent in the five years ended September 2015, according to the Government Accountability Office."

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7.24.17 - Credit, Cash & The Coming Crash

Gold last traded at $1,254 an ounce. Silver at $16.44 an ounce.

NEWS SUMMARY: Precious metal prices touched 4-week highs Monday on safe-haven buying and dollar weakness. U.S. stocks traded mixed as tech earnings failed to lift investor sentiment amid rising political and economic turmoil.

Gold hits 4-week high on weaker equities, U.S. dollar -Reuters
"Gold touched a four-week high early on Monday, supported by weaker equities and a dip in the dollar to fresh 13-month lows due to political uncertainty in the United States....The White House said on Sunday that Trump was open to signing legislation toughening sanctions on Russia after Senate and House leaders reached agreement on a bill late last week. U.S. Republican Senate leaders aim to hold a procedural vote as early as Tuesday to take up legislation to repeal or replace Obamacare, but it remained unclear which version of the bill senators would vote on....Hedge funds and money managers increased their net long position in COMEX gold for the first time in six weeks in the week to July 18, U.S. Commodity Futures Trading Commission data showed on Friday."

credit Credit, Cash & The Coming Crash -PontificationBlog
"Between 2003 and 2013, the inflation-adjusted net worth of the typical household plunged by 38 percent, owing largely (but not entirely) to the crisis of 2008-2009 and the huge drop in the prices of homes, which millions had used as appreciating savings and then as their own ATM machines to pay for other things....In 2017, our economy still suffers from the bursting of the housing bubble and its debasement of the homeowner American Dream. The typical American household, reported CBS News, in inflation-adjusted dollars is 'still earning 2.4 percent below what they brought home in 1999.'....As borrowing and debt increase, we also face another problem. Many analysts study recurring patterns in the economy, society, and nature to foresee what soon could be coming. Ominously, many of these theorists are giving the same dire warning – that between now and the end of year 2020, a convergence of negative patterns and the low points of several cycles will hit us all at once. This is one of the worst convergences of negative forces in centuries! It could potentially batter the United States socially and economically. As Craig R. Smith explains in a new Crisis Timeline, this can also be a disaster for the unprepared. But for those who are prepared, it could be a huge opportunity....Globalists are eager to impose a 'cashless' society where everything is credit and debt, where values are easily manipulated, and where all financial transactions are monitored and taxed by government....And if the globalists get their way, an American economic and social crash is inevitable. Full story

The Dollar's Slide Continues -RealClearMarkets
"The US dollar lost ground against all the major currencies, save sterling, over the past week, and also fell against most emerging market currencies. There is little from a technical or fundamental perspective, including next week's FOMC meeting, that suggests a reversal is at hand....What they doubt is that the Federal Reserve will raise interest rates in the face of price pressures that have moderated. The fiscal course of the Trump Administration is also doubted....The Dollar Index fell for a second consecutive week. It has fallen in six of the past seven sessions. The week's 1.25% decline took it blow 94.00, its lowest level since June 2016. This area is important from a technical perspective, and a convincing break could open the door to another 3-5% decline."

America 2017 = France 1789 -Kunstler/Zero Hedge
"We are looking more and more like France on the eve of its revolution in 1789. Our classes are distributed differently, but the inequity is just as sharp. America's 'aristocracy,' once based strictly on bank accounts, acts increasingly hereditary as the vapid offspring and relations of 'stars' (in politics, showbiz, business, and the arts) assert their prerogatives to fame, power, and riches - think the voters didn't grok the sinister import of Hillary's 'it’s my turn' message? What’s especially striking in similarity to the court of the Bourbons is the utter cluelessness of America’s entitled power elite to the agony of the moiling masses below them and mainly away from the coastal cities....The floundering non-elite masses have not learned the harsh lesson of our time that the virtual is not an adequate substitute for the authentic, while the elites who create all this vicious crap spend millions to consort face-to-face in the Hamptons and Martha’s Vineyard telling each other how wonderful they are for providing all the artificial social programming and glitzy hardware for their paying customers....The next big entertainment for them will be the financial implosion of the elites themselves as the governing forces of physics finally overcome all the ruses and stratagems of the elites who have been playing games with money. Professional observers never tires of saying that the government can’t run out of money (because they can always print more of it) but they can certainly destroy the value of that money and shred the consensual confidence that allows it to operate as money. That’s exactly what is about to commence at the end of the summer when the government runs out of cash-on-hand and congress finds itself utterly paralyzed by party animus to patch the debt ceiling problem that disables new borrowing."

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7.21.17 - US Dollar Slide Prompts Gold Spike

Gold last traded at $1,254 an ounce. Silver at $16.45 an ounce.

NEWS SUMMARY: Precious metal prices shot up Friday on safe-haven buying and a sharply weaker dollar. U.S. stocks fell as GE led industrial stocks lower and political uncertainty increased.

Dollar slide sets gold up for biggest weekly rise in two months -Reuters
"Gold was set for its biggest weekly gain in two months on Friday as a surging euro pushed the dollar to its weakest since June 2016, making bullion cheaper for holders of other currencies....Gold is highly sensitive to rising interest rates because they cause bond yields to rise and tend to boost the dollar. The Fed's rate-setting committee is due to meet on July 25 and 26. Gold broke through resistance at its technically important 100- and 50-day moving averages, both around $1,250. 'We look to a break through the 100- and 50-day moving averages as a pivot point for further gains,' MKS PAMP trader Sam Laughlin said in a note."

retirement Another blow for heartland workers: Slashed pensions -CBSNews
"February was a bad month for Larry Burruel and thousands of other retired Ohio iron workers. His monthly take-home pension was cut by more than half from $3,700 to $1,600. Things have been rough in the Rust Belt, but this was a particularly powerful punch in the pocketbook for Burruel, who started in the trade at 19 and worked 36 years before opting for early retirement to make way for younger workers....Burruel and the 4,000 members of his Cleveland Iron Workers Local 17 pension plan are the canaries in the coal mine as far as pension cutbacks go....This cross-section of America includes more than a million former truck drivers, office and factory employees, bricklayers and construction workers who are threatened with cutbacks that could last the rest of their lives...Some would argue that these union workers should have contributed to IRAs because these investments can't be touched. But that wasn't the way these union workers thought....Unfortunately, this is only a glimpse into the future awaiting at least a million pensioners in the Rust Belt and elsewhere."

The Upside and Downside of Liquidity-Driven Markets -Bloomberg
"Over the past few months, government bond yields have fallen, the dollar has weakened and financials have underperformed, yet the major stock indexes are at or very near record highs, as persistently supportive liquidity conditions have more than compensated for policy and growth disappointments. By boosting returns and repressing volatility, ample liquidity is a gift for investors. It makes the investment journey pleasing, comfortable and lengthy. But it is not a destination....With Fed monetary measures already stretched, there has been little policy offset to a soft patch in indicators of household and corporate economic activity. Yet none of this seems to have been reflected in the major stock indexes. All three - the Dow Jones, Nasdaq and S&P - registered more record highs this week...So far, equity investors have experienced an unusually long and fulfilling journey - one that, absent a major accident, could last a little longer. What remains more elusive, however, is confidence that this will end up at an enjoyable destination."

The Federal Reserve May Show Trump No Love -Schiff/RealClearMarkets
"There could be no easier way to undermine the entire Trump presidency than an official bear market to erupt on Wall Street. In that sense, as I have said in a prior commentary, Janet Yellen presents a much greater threat to Trump than does Robert Mueller or Chuck Schumer. Yet despite these warning signs, investors have not yet shown much concern. They still seem to believe that if anything goes wrong, the Fed will provide the bail out. But that is not a risk Wall Street should be eager to test. My guess is that the 'Yellen Put' is still in effect, but the strike price may be much lower than most investors believe, meaning more substantial losses could be required before the Fed acts....How soon before stock market investors connect the same dots? With the Fed not only threatening more rate hikes, but also making noises that it will draw down its balance sheet, which would result in 'quantitative tightening,' U.S. stock market investors should not be getting too comfortable. Instead, the falling dollar and the more positive economic results coming from non-U.S. economies might suggest that a move into long-beaten down foreign markets may be opportune."

Bottom falling out of US dollar -CNBC
"The dollar is crumpling under pressure, and there doesn't appear to be much to stop it. European Central Bank President Mario Draghi was the latest catalyst, sending the euro higher with comments that the ECB would discuss when to start paring back its bond purchases in the fall. While some viewed the central bank president as a bit vague, his words still drove the euro to a near two-year high against the dollar....The dollar's decline Thursday is a continuation of a weakening that started last week after Fed Chair Janet Yellen voiced concerns about low inflation and talked about a lower than historic neutral rate."

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