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3.23.18 - Gold Jumps As China Tariffs Shake Markets

Gold last traded at $1,349 an ounce. Silver at $16.58 an ounce.

NEWS SUMMARY: Precious metal prices rose to one-month highs Friday on safe haven buying and a weaker dollar. U.S. stocks struggled as China trade war fears loomed over the global financial markets.

Gold jumps as Trump tariffs shake global markets -Reuters
"Gold prices surged to a one-month high on Friday as the threat of a global trade war sent investors scrambling for safe assets. U.S. President Donald Trump signed a memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China, prompting Beijing to urge the United States to 'pull back from the brink'. The tariffs have a 30-day consultation period, leaving room for compromise, but investors fear a trade war could develop with potentially dire consequences for global growth....Adding to the turmoil, Trump also threatened to veto the $1.3 trillion spending bill passed by Congress, raising the specter of a government shutdown. World stock markets, the U.S. dollar and U.S. bond yields were all lower. 'Risk aversion is currently the name of the game in financial markets,' said Peter Fertig, analyst at Quantitative Commodity Research. 'Markets are looking for safe havens.'"

government The Worst Part Of The GOP's Massive $1.3 Trillion Spending Bill Is What's Not In It -Investors
"Some Republicans were complaining that they didn't know what was in the massive $1.3 trillion 'omnibus' spending bill they voted on this week. But it's what's not in the bill that's the most troubling. The real problem with this bill is what it doesn't contain. First on this list is any semblance of spending discipline. It is, rather, an orgy of new spending, which hikes outlays in the next six months by almost $77 billion. Over the next two years, it will increase defense spending by $160 billion and domestic spending by $128 billion....As Heritage Foundation budget expert Justin Bogie put it, the bill 'is unshackling the Washington swamp to spend without constraints.'....Border security is the second glaring omission in this bill. The bill includes $1.6 billion in funds to build a border 'wall.' But - incredibly - it specifies that only a portion of it can be used to extend existing barriers, and specifically bars the money from being used to build anything other than what 'is currently deployed.' In other words, none of the money can be used to build any of the prototypes Trump just visited."

China Started the Trade War, Not Trump -Wall Street Journal
"If there's a trade war between the U.S. and China, don't blame Donald Trump: China started it long before he became president. Even free traders and internationalists agree China's predatory trade practices - which include forcing U.S. business to transfer valuable technology to Chinese firms and restricting access to Chinese markets - are undermining both its partners and the trading system. Mr. Trump's China crackdown is risky, but it's on firmer legal, political and economic ground than many of his other trade complaints, for several reasons. 1. These products are different: The classic case for free trade predicts that each country specializes where it has a comparative advantage, lowering costs and raising incomes for everyone....2. The WTO isn't enough: When China joined the World Trade Organization in 2001, many advocates thought it would play by the global rules against advantaging its own firms and hurting others. Instead, China does so anyway in ways not easily remedied by the WTO....3. The U.S. isn't alone:...'Everyone who trades with China faces this problem,' Peter Navarro, Mr. Trump's trade adviser, told reporters Thursday....4. China isn't like Japan:...It is a military ally and is thus sensitive to U.S. pressure on trade. China is a geostrategic rival pursuing and sometimes stealing U.S. secrets for both civilian and military purposes."

You are not friends with Facebook and Mark Zuckerberg. You are their product. -USA Today
"Attention Facebook users, all 2 billion of you. If after reading the latest news about a private company harvesting your personal data for political gain, you think Facebook has screwed you, you have no one to blame but yourself. Facebook has been playing fast and loose with your data and privacy for years....For years, we loved Facebook without thinking of how it worked or what the consequences were. We happily, giddily traded all of our privacy and shared data - without much thought - for access to free information about friends, relatives and news....Fair or not, the onus to protect our data is on us to get smarter. We really have no right to be mad. There is no such thing as a free lunch. We always knew that, but it was convenient to look away and hit the 'like' button instead. So here's how to adjust your Facebook privacy settings. Do it."

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3.22.18 - Fed A 'Wet Blanket' For Stocks

Gold last traded at $1,327 an ounce. Silver at $16.38 an ounce.

NEWS SUMMARY: Precious metal prices stabilized Thursday after rising sharply following the Fed statement and rate hike. U.S. stocks traded sharply lower as China trade war fears and tech troubles worried investors.

Gold Gains After Fed Decision -Wall Street Journal
"Gold prices extended gains in aftermarket trading Wednesday, boosted by a less hawkish than expected Federal Reserve and worries over a brewing trade war with China. Gold for April delivery was recently up 1.6% at $1,333.20 a troy ounce in electronic trading. Fed officials said they would increase their benchmark federal-funds rate to a range between 1.5% and 1.75%, as widely expected. They also said they have penciled in a total of three rate increases for this year, a less aggressive outlook than some investors were anticipating. A slower-than-expected pace of rate increases tends to buoy gold, which struggles to compete with yield-bearing assets when borrowing costs rise....Investors view a growing trade conflict 'as a huge negative,' said Ira Epstein, a broker at the Linn Group. Those concerns are buoying gold, a popular destination for nervous market participants, Mr. Epstein said. A further boost for gold came from a falling dollar."

boxing China Braces For Trade War With US, Accuses Washington Of "Repeatedly Abusing" WTO Rules -Zero Hedge
"The White House unveiled $50 billion worth of tariffs on more than 100 different types of Chinese goods Thursday at 12:30 pm ET - what President Trump has characterized as a response to China's larcenous Intellectual Property practices (and, quite possibly, a preemptive strike as China prepares to launch its petroyuan contracts next week). This is how UBS' Chief US Economic Paul Donovan summarized what is coming: 'President Trump is expected to announce a tax increase for US consumers who have dared to purchase goods that have been partially made in China. There is likely to be a large US flag, suitably photogenic and smiling American workers and a dramatic signature. And selective tariffs, investment restrictions and visa limits. US Trade Representative Lighthizer said that an 'algorithm' was used to maximize the pain to China and minimize the pain to US consumers (this acknowledges that there is pain for US consumers). Trade data (presumably the algorithm input) is complex and often out of date. Saying the word 'algorithm' in an authoritative voice does not magically reduce the risks.' The tariffs will be imposed under Section 301 of the 1974 US Trade Act and focus on Chinese high-tech goods. There will also be restrictions on Chinese investments in the US, said US Trade Representative Robert Lighthizer....China's shift to a consumption-based economy has made it less dependent on exports - so the $50 billion tariffs imposed by the US likely won't have much of an impact. But Moody’s Investors Service said the impact would be far greater if the US significantly expands tariffs and throws in broad-ranging protectionist measures."

The End of the Petrodollar? -National Interest
"In a move that could portend massive shifts in the global oil game, the Shanghai International Energy Exchange will soon unveil an oil-futures contract denominated in Chinese yuan rather than U.S. dollars. Experts warn that the growing clout of Chinese currency in international financial markets could erode the primacy of the U.S. dollar, a long-term economic trend that should greatly trouble Washington. The International Energy Exchange conducted a final set of drills to test trading, settlement, and quote transmission back in December. China's Securities and Regulatory Commission has announced that the crude-futures contract will launch on March 26. The new benchmark is so significant because it directly challenges the dollar-dominated pricing scheme of crude oil markets - commonly known as the petrodollar system - which helps to undergird the dollar's status as the international reserve currency. That arrangement dates back to 1974, when Saudi Arabia and other regional oil suppliers, in exchange for sustained U.S. military aid and equipment, agreed to exclusively accept the Greenback for oil sales and - perhaps most importantly - to invest their oil revenues into U.S. treasuries."

The Fed Is Now A 'Wet Blanket' For Stocks -Forbes
"The Federal Reserve raised the overnight funds rate 25 bips as expected. No one was surprised. But when Fed chairman Jerome Powell said that they will hike more in 2019 if inflation rises on economic growth - which it, of course, will - the Fed will just hike less rather than stop. In other words, even if the economy slows, the Fed funds rate is going higher. This is hawkish, and a head-scratcher. The Fed 'adopted a slightly more hawkish tilt to policy at this meeting,' HSBC Global Research analysts led by Kevin Logan in New York wrote in a note to clients last night. 'The shift was apparently motivated by a re-assessment of the outlook for economic growth and inflation. Our own forecasts for the federal funds rate are unchanged. We still anticipate two more rate hikes this year and one additional rate hike in 2019,' he says....The contrarians over at The Daily Reckoning sent a cautious reminder to subscribers last night that 10 of 13 post-World War II tightening cycles have ended in recession. And at 105 months of economic expansion, the current bull market is running on fumes. By May it will become the second-longest bull market in history."

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3.21.18 - Gold Rises Over 1% after Fed Rate Hike

Gold last traded at $1,325 an ounce. Silver at $16.41 an ounce.

NEWS SUMMARY: Precious metal prices rose over 1% after the Fed hiked interest rates a 1/4 point. U.S. stocks traded mixed despite an upbeat Fed outlook.

Gold rises more than 1% after Fed raises interest rates -CNBC
"Gold prices rose higher on Wednesday after the U.S. Federal Reserve approved a widely expected raise in interest rates. While baseline forecasts of three more rate hikes this year were unchanged, the Fed hinted that the path of rate hikes could be more aggressive in the following two years. Spot gold soared 1.28 percent at $1,327.64 an ounce at 2:14 p.m. EST, having dropped as low as $1,306.91 in the previous session....The dollar index, which measures the greenback against a basket of six major currencies, slipped 0.55 percent to 89.87 after climbing to its highest since March 1 in the previous session. A weaker greenback makes dollar-denominated assets such as gold cheaper for holders of other currencies....Among other precious metals, silver added 1.74 percent at $16.467 an ounce while platinum rose 1.06 percent at $950.50 an ounce."

debt At $21 Trillion, The National Debt Is Growing 36% Faster Than The US -Black/The Sovereign Man
"Well, it happened again. On Friday afternoon, the national debt of the United States hit another major milestone, soaring past $21 trillion for the first time ever. Clearly that is an enormous number… it's actually larger than the size of the entire US economy, which is pretty incredible....Most disturbingly, the national debt has grown by more than $1 TRILLION… just in the last SIX MONTHS. I'm scratching my head right now wondering - where did they spend all that money? Was there a major economic crisis, wave of bank failures, or severe depression that required massive fiscal stimulus? Nope. It was just business as usual....The size of the US economy increased by 4.4%. Yet the national debt grew by 6%...On a proportional basis, the national debt expanded 36% faster than the US economy....Over the course of several years, that effect compounds into something that's quite nasty. At the end of 2008, for example, the size of the US economy was $14.5 trillion. A decade later, the size of the economy is $19.7 trillion, 36% greater. Yet over the past ten years, the national debt has grown from $9.4 trillion to over $21 trillion - a growth rate of 123%! It's really, really hard to pretend that this is good news."

Politics & Investing -Merk Investment Insights
"When it comes to your investment portfolio, do you ignore the noise coming out of the White House? Do tariffs matter? Or would it be more prudent to chill and focus on other potential drivers of the markets?....We all recall how many predicted a stock market meltdown when Trump was elected; the selloff lasted a few hours, then the markets rallied. Go figure. Similarly, I allege that if I were to look at your investment portfolio, odds are high I can tell you whether you are a Democrat or Republican at heart. If this were actually correct (I have no proof, although I have anecdotal evidence my claim has some merit), should your political preferences dictate how you deploy your capital?....Socially conscious investments may have moved from the fringe to the mainstream. My own take had been, well, in a market that goes up, and up, and up, it doesn't really matter what you invest in, so you might as well invest in a good cause with a subordinate interest whether the return on capital is as high as it could be if social factors were not considered. There's a saying that bull markets make smart investors. Meaning, as Warren Buffett has put it so eloquently, when the tide moves out, we will find out who swims naked. Differently said: investing according to your political convictions may make you feel good, but may not necessarily be financially prudent....So how does one take a deep breadth, and take a step back, to assess what the implications are and not be euphoric or horrified, depending on your political leanings? Well, it’s not easy. An article in the New York Times earlier this month had a novel suggestion: read a printed newspaper. More specifically, shut down all your electronic gadgets....We don’t have a crystal ball, but what we do know is that with all the noise there is, the most important thing may be to have a plan. Then, the political drama may be less stressful to investors. Depending on one's investment process, it doesn't mean one should ignore Washington, but it may mean turning off the talking heads once in a while to get away from it all. So get off your desk and off your iPhone, it may well be good for both your health and your portfolio!"

Orbitz says hacker stole two years' worth of customer data -ZDNet
"Travel booking website Orbitz has been hacked, the company said. The site, now owned by Expedia, confirmed in a statement that it 'identified and remediated a data security incident affecting a legacy travel booking platform.' According to the statement, the company found evidence in March that an attacker had access to the company's legacy systems between October and December last year. It was during that time the hacker accessed customer data from the previous two years - between January 2016 and December 2017 - which included names, dates of birth, postal and email addresses, gender, and payment card information. On the company's consumer platform, the attacker may have accessed personal customer data between January and mid-June 2016. Orbitz said that about 880,000 payment cards are affected by the hack....'We are working quickly to notify impacted customers and partners,' said the statement. 'We are offering affected individuals one year of complimentary credit monitoring and identity protection service in countries where available.'"

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3.20.18 - Gold: A Good Insurance Policy as Rates Rise

Gold last traded at $1,311 an ounce. Silver at $16.18 an ounce.

NEWS SUMMARY: Precious metal prices slipped Tuesday on a firmer dollar ahead of anticipated Fed rate hike. U.S. stocks rebounded from Monday's sharp sell-off on bargain hunting as Fed meeting begins.

Gold Still A Good Insurance Policy As Rates Rise – Degussa -Kitco
"Gold has fallen to a three-week low as the Federal Reserve starts a two-day monetary policy meeting; however, one bullion firm said that it sees some buoyancy in the precious metals, despite the threat of higher interest rates. Although gold prices are testing support just above $1,300 an ounce, analysts at Degussa said that the current price could represent an attractive entry point for investors looking for some market insurance. 'At the current price, there is a good reason to expect that gold can serve as insurance against the vagaries of the fiat money system, providing its owner with optionality,' the analysts said in a recent report....'The Fed's tightening policy is like taking away the 'punch bowl,' and if it raises interest rates too much, the party would definitely come to an end. It is against this backdrop that gold, even in times of slightly higher real interest rates, is increasingly attracting investors, which has ultimately led to a price increase,' the analysts said....Degussa's comments come ahead of the Federal Reserve's widely expected interest-rate hike Wednesday."

stock market Has the Stock Market Already Peaked In 2018? -Kass/Real Clear Markets
"The Return of Volatility: 'Maybe it's because of the experience of the last month and because we tend to read the latest trend into our forecast, but there was a consensus at SIC that market volatility is going to resume its normal place in our lives...The volatility of February was not the odd thing; it was the preceding 15 months that was extraordinary. Have we seen a market peak, as my friend Doug Kass thinks? Maybe.' - John Mauldin, SIC Perspectives - Here are my Top 10 Reasons why the markets may have already peaked in 2018: 1) A Presidency of One: Trump's behavior may finally matter to the capital markets...2) The Outcome of the Mueller Investigation Could Be Market Unfriendly...3) A Blue Wave in the Mid-Term Elections Could Also Be Disruptive to the Markets...4) The Expectations of a Synchronized Global Economic Recovery May Be Wrong...5) Global Central Bankers are Pivoting Towards Tighter Money...6) The US Lacks Fiscal Discipline...7) Inflation Pressures Are Building and Interest Rates are Heading Higher...8) Trade Wars Seem More Likely - Threatening World Trade...9) Facebook, Google and Amazon Face the Existential Threat of Regulations and More Legislation...10) Expanding Individual Investor Optimism...Bottom Line: Based on the above, and other factors, I am currently net short and expect heightened volatility and a widening trading range in 2018."

Trump's Turning Point In History (And Ours) -Pontification Blog
"Progressives continue to suffer shock and awe that Trump, like a mythical Greek hero, did the almost-impossible by defeating Clinton. This man of destiny prevented our doom, although it remains to be seen for how long. He is tough but honest about his agenda....As part of the media's frenzied coup attempt to destroy Trump, CBS '60 Minutes' plans next weekend to interview a fame-and-wealth-seeking pornographic movie star who claims she and Trump had an affair. She says she was paid $170,000 not to discuss this matter in public, but now she will - which means that nothing she says can be trusted. CBS is changing from the Tiffany to the titillation network, airing smut for ratings. Did it do this when Progressive Bill Clinton was sexually accused? Bill and Hillary Clinton were given prime time on '60 Minutes' in a pre-taped, pre-election interview - basically a free ad - where Executive Producer Don Hewitt gave them the questions in advance, along with guaranteed do-overs if they slipped and said anything embarrassing. Republicans are never allowed to edit their CBS interviews like this...CBS is sinking from being fake news into Pornews, airing pornography as news. Anything to destroy Trump....Trump has struck fear into our smug unelected rulers who thought they were above the law and would pay no price for attempting a coup d'etat. Leftists now know this war with Trump could cost them their accumulated power. Trump has less than seven years left to serve, but supporters act as if he has made America permanently prosperous. Seven good years might be coming, or, God forbid, tomorrow morning's news could report that Trump's presidency has suddenly ended and the economy and dollar are in free fall. We should be prepared with honest money, prudent diversification, and individual responsibility."

How the Deep State Robbed the Working Stiff -Bonner/Bonner And Partners
"Is the economy remarkably resilient? Yes. Resourceful? Yes. Strong? No. The growth rate - probably the best measure of 'strength,' has been generally softening for the last 30-plus years. And what 'growth' there is… is spotty. Some areas are doing much better than others. As we saw last week, the big urban agglomerates, with many immigrants, tend to be dynamic and prosperous. Many other areas have been left behind, especially in former manufacturing regions of 'flyover country.' Some people, too, have done very well. The richest 10% has gotten almost all the wealth gains of the 21st century. That means 90% of the population has gotten nothing. The median man, for example, has lost real income (when adjusted for inflation), not just for the last 18 years, but for the last 40. The typical working stiff feels he has been cheated....But not by the Mexicans… or the Chinese… or by bad trade deals. He's been cheated by his own elite....From ancient Rome, to the court of Louis XVI, to the Soviet Union, there is always a group of insiders who manage power for their own benefit. Why does this matter? In 1971, President Nixon ended the convertibility of the U.S. dollar to gold. Almost without realizing it, the Deep State got control of America's dollar. By 1987, they had learned how to use their control to boost their wealth far beyond anything they had seen before. But now, they face a new test: Their fake-money system may soon explode."

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3.19.18 - The Best Financial Advice Nobody Gives

Gold last traded at $1,317 an ounce. Silver at $16.32 an ounce.

NEW SUMMARY: Precious metal prices rose Monday on market volatility and a weaker dollar. U.S. stocks fell sharply on political and economic worries as tech giant Facebook's shares skidded over 7%.

How to Maximize Your Gains in a Gold Rally -The National
"The price of gold is likely to move higher again this week if the Federal Reserve raises interest rates as forecast. Gold prices have jumped after each of the previous five rises of the current cycle and is more than 30 per cent up from its recent bear market low of $1,050, touched in December 2015....If any single factor can be isolated to explain the latest price surge for the yellow metal, it has to be the relative weakness of the US dollar over this period....The five Fed interest rate rises have so far failed to stop the fall in the greenback's value as the market is more worried about a surge in the national debt courtesy of tax cuts and increased military spending. One possible future scenario is that January's US stock market decline resumes and that the Fed then cuts interest rates to counter an even more serious correction. That's what happened in 2008 when rates rose up and up until the stock market crashed and then went down all the way to zero. The effect of that was a dollar crash and soaring precious metal prices, with gold hitting an all-time high of $1,923 an ounce by October 2011....Open your eyes to a wealth of opportunities right now in the gold and silver sector, where you can still get in ahead of the crowd."

crashless When Did the Stock Market Crash? -Motley Fool
"A stock market crash is loosely defined as a sudden and sharp decline in stock prices across a broad portion of the stock market. Crashes can be triggered by panic, economic factors, bursting of speculative bubbles, and these days, by automated trading technologies. Since 1772, the U.S. has experienced a total of 22 stock market crashes, but not all have been equally harsh or long-lasting. With that in mind, here are some of the most notable U.S. stock market crashes, and a brief rundown of the causes and results of each one....One of the worst stock market crashes in U.S. history was the Panic of 1907. The stock market fell by about 50% during a three-week period...which led to the collapse of the Knickerbocker Trust....The Crash of 1929 was the worst, and longest-lived crash we've had. From September 1929 through July 1932, the Dow Jones Industrial Average lost a staggering 89% of its value....October 19, 1987 was the largest one-day percentage drop in the Dow Jones Industrial Average in history. The Dow fell by 508 points on the day, which was a 22% drop at the time. For context, this would be like a one-day drop of 5,500 points in 2018."

Suddenly, it seems as though many experts are warning us about a potential stock market collapse. Truth is, America appears to be getting stronger by the day, not weaker. And so what if the stock market takes a big correction? It always comes back, right? Discover how to find the hidden positives and negatives of today's rising economic optimism in a brand new Swiss America Special Report: THE CRASHLESS SOCIETY.

The Best Investment Advice Nobody Will Give You -567 Capital
"Even if you're an investing novice, it's likely you've heard of Warren Buffett. And for good reason: Warren Buffett is currently the third-richest person in the world with a reported net worth of $84 billion. Unlike the two richest men, Buffett created his wealth mostly by investing - as in the actual act of buying and selling companies - rather than creating a product or service....If you were able to invest $1,000 in Berkshire Hathaway when Buffett was named as CEO, your initial investment would be worth approximately $21 million versus $161,000 from a $1000 investment in the S&P 500. Here's the rub: It's virtually a certainty that you're no Warren Buffett. Don't take this personally....Here's the best advice nobody in the financial industry will tell you: Your savings rate is more important to your investing success than your rate of return.To drive home this point, meet Saver Sally. Sally is a consistent investor and accepts the market's return instead of attempting to time or beat the market. After 20 years of stashing away $1000 per month, Sally has an admirable nest egg of approximately $760,000....Too often investors are looking to be the next Warren Buffett (without the prerequisite investing intelligence) rather than the next Saver Sally. It may not be as exciting, but investing more money has the benefit of being a less-risky approach to increase your net worth."

74% Of Americans Believe The "Deep State" Is Running The Country -Zero Hedge
"According to a new poll, that's precisely the case because a supermajority of Americans believes the faction of unelected officials, known as the deep state, is orchestrating policy in Washington, D.C. and effectively running the nation. The Monmouth University Polling Institute found that no less than 74% of Americans believe in a 'deep state' when it is described as a collection of unelected officials running policy. Only 21% do not believe this kind of group exists. As a result of countless 'conspiracy theories' being proven as facts in recent years, chief among which the Edwards Snowden revelations which exposed the NSA as nothing short of 'big brother'... fully 8-in-10 believe that the U.S. government currently monitors or spies on the activities of American citizens, including a majority (53%) who say this activity is widespread and another 29% who say such monitoring happens but is not widespread. Just 14% say this monitoring does not happen at all. Shockingly, there were no substantial partisan differences in these results....Monmouth University Polling Institute Director Patrick Murray said in a statement. 'There's an ominous feeling by Democrats and Republicans alike that a 'Deep State' of unelected operatives are pulling the levers of power.'....'This is a worrisome finding. The strength of our government relies on public faith in protecting our freedoms, which is not particularly robust. And it’s not a Democratic or Republican issue. These concerns span the political spectrum,' said Murray."

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