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7.17.19 - Dalio: Gold will be a top investment

Gold last traded at $1,423 an ounce. Silver at $15.97 an ounce.

NEWS SUMMARY: Precious metal prices rose over 1% Wednesday on safe-haven buying and a weaker dollar. U.S. stocks drifted lower as the corporate earnings season began with mixed results and included downbeat growth projections.

Trading a Currency War: Stay Clear, Buy Gold, Deutsche Bank Says -Bloomberg
"Should U.S. foreign-exchange policy spur a global currency conflict, Deutsche Bank AG sees gold as the ultimate victor. The possibility of U.S. FX intervention has created some buzz among Wall Street analysts after President Donald Trump took aim at China and Europe this month, saying they're playing a 'big currency manipulation game.' A U.S. attempt to weaken the dollar - a step it hasn't taken since 2000 - could prompt other nations to combat the intervention, sparking a 'true currency war' probably involving the yuan and euro, according to Deutsche Bank strategist Alan Ruskin. 'With a currency war most likely to be fought on USD/CNY and EUR/USD terrain, one approach would be to steer clear of the direct conflict,' Ruskin wrote in a note Monday. 'By far the most direct and simple way to trade the complexities of a currency war is by going long gold.' Gold has climbed 10% this year amid deepening U.S.-China trade tensions and climbing wagers on a Federal Reserve rate cut. The metal touched a six-year high last month, and hedge funds are close to their most bullish levels since 2017....Trump may get his wish for a weaker dollar if greenback sales accompanied monetary easing, Ruskin wrote. The Fed is widely expected to lower rates later this month."

piggy bank Insanity: Now even junk bonds have negative yields -Black/Sovereign Man
"75 years ago this month, a group of 744 delegates from around the world gathered at the very posh Mount Washington Hotel in New Hampshire to build a brand new global financial system. They called it the Bretton Woods system, named for the town in New Hampshire where they gathered. And their central idea was that the value of the US dollar would be fixed to gold at a rate of $35 per troy ounce, while every other currency would be fixed to the US dollar....During the roughly quarter-century that the Bretton Woods system was in place, banking crises were almost nonexistent. Recessions were rare...Then it all came to a screeching halt in 1971. The US government wanted the flexibility to print as much money as it needed without being forced to maintain the gold standard. So the whole system collapsed, practically overnight...The effects have been pretty disastrous...(It's ironic that, back in 1944, the price of a room at the Mount Washington was $18. Today it's over $250.)....Perhaps most of all, we now regularly witness some of the most extreme financial anomalies imaginable. And one of the most obvious examples of this is negative interest rates....Just a few days ago the insanity reached a whole new level. According to the Wall Street Journal, there are now some JUNK BONDS in Europe that have negative yields....It's possible this madness could continue for a while longer. Or it could end tomorrow...That's why I think makes sense to take sensible steps to protect yourself… no matter what happens next. That's why I own gold. Gold is still one of the only asset classes in the world that's not anywhere near an all-time high (unlike stocks, bonds and real estate). In fact, relative to what's going on in the world, gold is downright cheap. Gold is something people tend to buy in times of uncertainty… and right now, there is a lot of uncertainty."

Ray Dalio says gold will be a top investment during upcoming 'paradigm shift' for global markets -CNBC
"Hedge fund kingpin Ray Dalio is seeing a case for gold as central banks get more aggressive with policies that devalue currencies and are about to cause a 'paradigm shift' in investing. Dalio, founder of the world's largest hedge fund, wrote in a LinkedIn post that investors have been pushed into stocks and other assets that have equity-like returns. As a result, too many people are holding these types of securities and likely to face diminishing returns. 'I think these are unlikely to be good real returning investments and that those that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold' the Bridgewater Associates leader said...'For this reason, I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one's portfolio. I will soon send out an explanation of why I believe that gold is an effective portfolio diversifier.'....Investors, Dalio said, are going to need to change their mindset about what will work following the longest bull market run in Wall Street history. 'In paradigm shifts, most people get caught overextended doing something overly popular and get really hurt,' he wrote. 'On the other hand, if you're astute enough to understand these shifts, you can navigate them well or at least protect yourself against them.'"

Now It's a Climate 'Emergency' -Editors/Wall Street Journal
"When President Trump declared a national 'emergency' in February to take money from the Pentagon to build his border wall, these columns warned he was setting a precedent that Democrats would exploit. Well, that day has arrived, as Democrats last week introduced a resolution in Congress declaring a national emergency due to climate change. Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez introduced a joint resolution declaring that the climate Apocalypse is nigh, and demanding 'a national, social, industrial, and economic mobilization of the resources and labor of the United States at a massive-scale.' Some commentators are calling the resolution 'symbolic,' noting a contradictory provision that reads 'nothing in this concurrent resolution constitutes a declaration of a national emergency for purposes of . . . any special or extraordinary power.'...'The national emergency is not the border, it's the climate,' Mr. Blumenauer said on a press call. A Sanders spokesperson also drew the comparison, noting that, in contrast to Mr. Trump's 'phony national emergencies,' the Sanders resolution addresses a genuine 'existential' threat. Nothing will happen this Congress, but the resolution's real point is to put down a marker for the Democrat they expect will be President in 2021. If he or she declares an emergency as Mr. Trump did, it could be used to justify extralegal executive actions that Congress has refused to pass....The good news is the federal judiciary might check this trend. Mr. Trump was angry that Congress wouldn't give him more than $1.38 billion in wall funding and used his emergency declaration to reallocate several billion more dollars for the wall. But this was a stretch of executive power that even a dozen Senate Republicans voted to overturn....The Trump Administration is appealing, and the legal merits are debatable given the ambiguity of 'emergency' in the law. But conservatives who applaud Mr. Trump's run around Congress should think again. Progressives will exploit the precedent for their own purposes."

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7.16.19 - Recession fears rise for middle-class families

Gold last traded at $1,411 an ounce. Silver at $15.67 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday on mild profit-taking and a firmer dollar. U.S. stocks slipped after President Trump said trade progress between China and the U.S. has a 'long way to go'.

Recession fears rise for middle-class families -CNBC
"Middle-class Americans are less optimistic about their economic prospects than they were just six months ago, according to a new report from CUNA Mutual Group...They graded their chances of achieving the American dream as a 'C,' down from a 'B-minus' in the fall, the insurance provider found. Close to half were increasingly concerned about an upcoming recession. A separate report by Allianz Life found that 48% said they fear a major recession, up from 46% in the first quarter of 2019 and 44% one year ago. 'Americans keep hearing that this is the longest economic expansion in history,' said Steven Rick, CUNA Mutual's chief economist. 'People's expectations are that we are due' for a recession....'This should be a wake-up call to families to start shoring up their finances now, whether that takes the form of cutting spending, reassessing their savings to avoid having to cut into their retirement to stay afloat or even refinancing a mortgage if that'll put them in a better position,' Rick said."

gold coin A Gigantic Gold Coin Makes Its Way to Wall Street -Wall Street Journal
"Richard Hayes plans to leave a $45 million coin on the streets of Manhattan all day Tuesday, but he isn't particularly worried about a thief carting it off. The coin - with Queen Elizabeth's profile pressed onto one side and a mid-hop kangaroo on the other - is beyond the wiles of the average pickpocket. It measures nearly 32 inches in diameter and is almost 5 inches thick. Oh, and it weighs about 2,200 pounds...Mr. Hayes is the chief executive of the Perth Mint, one of the world's largest gold refiners. He flew to the U.S. from Australia with the world's largest gold coin in tow, on a publicity tour....The price of gold surged to a six-year high this month and stands at $1,413.50 a troy ounce as of Monday. Its run-up since the end of May has added about $3.3 million to the value of the giant coin, if it were to be sold simply for its weight in gold....One of the six Big Maple Leaf coins made by the Royal Canadian Mint (weighing 221 pounds each) was lent to a Berlin museum in 2017, where it was promptly swiped. The heist made 'Ocean’s 11' look way too complex: These thieves climbed a ladder, forced open a window, smashed the security case and rolled away the giant coin in a wheelbarrow. Four men, including a museum guard, were arrested several months later, but the coin was never recovered."

Full-Blown Currency War Can No Longer Be Ruled Out, Pimco Says -Yahoo Finance/Bloomberg
"A full-blown currency war where major central banks and governments, including the U.S., deliberately weaken their currencies can no longer be ruled out, Pacific Investment Management Co.'s global economic adviser Joachim Fels wrote in a report. The view is in line with a rising chorus of Wall Street analysts who warn that President Donald Trump's repeated complaints about the foreign exchange practices of key trading partners heightens the risk of U.S. intervention to weaken the dollar. Fels describes current conditions as a 'cold currency war, round three' that is at risk of escalating. 'Following a pause since early 2018, the cold currency war that has been waging between the world's major trading blocs for more than five years has been flaring up again,' Fels wrote....'Even the threat of outright dollar sales, coupled with continued verbal and tweeted 'weak dollar policy' interventions and, importantly, easier monetary policy by the Fed, could well do the trick,' according to Fels."

Democrats and Republicans agree - Donald Trump will be re-elected -New York Post
"It's a mixed marriage of a certain kind. He was a Trump supporter all along and she ­detested the man. But these days, they agree on one big thing: The president will be ­re-elected. Easily. 'Easily?' I asked, making sure I heard them correctly. Yes, they insisted, with her nodding as he said Democrats had gone bonkers and voters would respond by giving Trump four more years. The recent Manhattan conversation would be insignificant except that it dovetails with national trends, namely a growing belief that Dems are not coming back to this world anytime soon. One of many defining moments among the presidential contenders and pretenders came with their unanimous support for giving illegal immigrants free health care. They raised their hands to signal yes, as if the question was a ­no-brainer. Implicit in their so-called compassion is an invitation for millions and millions more to cross the border and get free care. Free, of course, except to American taxpayers....As Dems continue to devour each other, there are times when it would be wise for the president to follow the rule that you should never get in the way when your opponent is committing suicide....Broadly speaking, Trump's focus on borders is the linchpin of his presidency and the essence of putting Americans first...More than 100,000 people were apprehended in June and officials say many more crossed undetected. No rational American can say the situation is acceptable, yet even Friday, Ocasio-Cortez was still calling it a 'manufactured' ­crisis....The talk of eliminating the security designed after the worst attack in America's history is the stuff from which landslides are made - for the other party."

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7.15.19 - Congress is Coming for Your IRA

Gold last traded at $1,413 an ounce. Silver at $15.34 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday on a firmer dollar. U.S. stocks slipped as investors remained cautious at the start of the corporate earnings season.

Swedish people are getting chip implants to replace cash -New York Post
"Thousands of people in Sweden are having futuristic microchips implanted into their skin to carry out everyday activities and replace credit cards and cash. More than 4,000 people have already had the sci-fi-ish chips, about the size of a grain of rice, inserted into their hands - with the pioneers predicting millions will soon join them as they hope to take it global....They have particularly caught on, however, by enabling owners to pay in stores with a simple swipe of the hand, a big deal in a forward-looking country that is moving toward eliminating cash. The microchips were pioneered by former body piercer Jowan Osterlund, who calls the technology a 'moonshot' - and who told Fortune magazine that he's been hit up by hopeful investors 'on every continent except Antarctica.'...Osterlund insists the technology is safe - but that has not stopped alarm bells from ringing, with some fearing a link to a doubling in cybercrime in the country over the last decade....'People have shown they're happy to give up privacy for convenience,' he said. 'The chip is very convenient, so could we accept our data being shared very widely before we know the risks?' The trend coincides with Sweden's march toward going cashless, with notes and coins making up just 1 percent of Sweden’s economy."

gold nest The Fed Could Use a Golden Rule -Grant/Wall Street Journal
"Though money can't talk, people can't stop talking about it. With the nomination of Judy Shelton to the Federal Reserve Board, the discussion has tilted to gold. Gold is money, or a legacy form of money, Ms. Shelton contends, and the gold standard is a reputable, even superior, form of monetary organization. The economists can hardly believe their ears. The central bankers roll their eyes. How can this obviously intelligent woman be so ignorant? Let us see about that. America was on one metallic standard or another from the Founding until President Richard Nixon announced the suspension of the Treasury's standing offer to foreign governments to exchange dollars for gold, or vice versa, at the unvarying rate of $35 an ounce. The date was Aug. 15, 1971. Ever since, the dollar has been undefined in law....The advance of computer technology has made possible a world-wide monetary system based on the scientifically informed discretion of Ph.D. economists. The Fed alone employs 700 of them....Gold-standard central banking concerned itself with the present. Millennial central bankers dare to take a view of the future. The moderns forecast, or attempt to forecast, economic growth, inflation, employment....The ideology of the gold standard was laissez-faire; that of the Ph.D. standard (let's call it) is statism. Gold-standard central bankers bought few, if any, government securities. Today's central bankers stuff their balance sheets with them....In today's monetary regime, some $13 trillion of debt securities world-wide are priced to deliver a yield of less than zero. There's been nothing like it in 4,000 years of recorded interest-rate history. And if gold could once be brushed aside as an anachronistic form of money, that time is no more, with private companies competing to bring digital gold to the blockchain. In 1989, Ms. Shelton published 'The Coming Soviet Crash,' a brilliant and courageous analysis of the weakness of an overrated collectivist economy. She could be just the woman to remind the Fed's doctors of economics how monetary capitalism works."

NY Fed's "Recession Probability Index" Is Now At "Alarming Levels" -Zero Hedge
"In addition to being the longest economic expansion in United States history, a number of reliable recession warning indicators have been flashing red in 2019. The latest of these is the New York Federal Reserve's recession probability index...'In the past, every time since 1960 that this index has breached 30%, a recession followed,' Morgan Stanley Wealth Management CIO Lisa Shalett wrote in a July 1 note to clients. It rose to 32.9% in June. Shalett also pointed to the gold/silver ratio, weakness in auto sales, housing, manufacturing, earnings, and capital spending. 'Recession probability models have entered warning territory and it may be unavoidable,' she added according to Axios. The most worrying part of a recession is that not only have most Americans not recovered from the last one, but many are blissfully unaware that an economic downturn is right around the corner. As the mainstream media lambasts the American public with tales of an epic and monumental economy, the data points and actual facts continue to rise to the surface....Around 28% of adults in the U.S. have no emergency savings, according to Bankrate's latest Financial Security Index...That would mean that a job loss or one missed paycheck would put almost a third of Americans in financial hardship."

Congress Is Coming for Your IRA -Wall Street Journal
"Like grave robbers opening King Tut's tomb, Congress can't wait to get its hands on America's retirement-account assets. The House passed the Setting Every Community Up for Retirement Enhancement Act, known by the acronym Secure, in May. The vote was 417-3. The Secure Act is widely expected to pass the Senate by unanimous consent. While ostensibly helping Americans save for retirement, the bill would actually reduce the value of all retirement savings plans: individual retirement accounts, 401(k)s, Roth IRAs, the works. The main problem with the Secure Act is that it eliminates the stretch IRA, the fixed star in the financial-planning firmament since 1999. The stretch IRA lets savers leave their retirement accounts to children, grandchildren or other beneficiaries...Congress wants to kill this. The Secure Act gives nonspouse beneficiaries 10 years to pull out all the money in an IRA. The effect would be to make more of an IRA subject to higher taxes sooner, as distributions are made in supersize chunks. As much as one-third more of an inherited IRA would get gobbled up by taxes than under current rules. When the Tax Cuts and Jobs Act expires in 2025, taxes will rise across the board. If President Trump signs the Secure Act into law, the stage will be set for a taxpocalypse sometime in the next decade....The insurance industry loves the Secure Act's mandate that annuities be offered as a payout option in all retirement plans. Insurance companies sold more than $230 billion worth of annuities in 2018, and they would like to push that figure higher. The mandatory offer of an annuity is a first step that could lead to the mandatory annuitization of all retirement accounts. This would shoehorn the distributions into higher brackets, accelerate the collection of tax revenue, and eliminate the 'problem' of the inherited IRA. Best of all, politicians would get to accomplish all this without voting to raise taxes." Congress is Coming for Your IRA

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7.12.19 - Gold Is In a New Bull Market

Gold last traded at $1,412 an ounce. Silver at $15.23 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on safe haven buying and a weaker dollar. U.S. stocks rose after testimony from the top Federal Reserve official signaled a rate cut is coming.

Gold Is In a New Bull Market - and It's Heading a Lot Higher -Barrons
"It's gold's time to shine. The price of gold has gained 9.6% to $1404.30 an ounce this year, and my work projects the precious metal will move substantially higher from current levels as it starts a new bull market. The fundamentals and technicals are aligned for gold to maintain its upward trend in the coming months. Let's start with the fundamentals. Federal Reserve policy continues to be accommodative....And then there's the U.S. dollar, which is on the verge of declining. While the U.S. Dollar Index is down less than 2% from its high, my work confirmed a sell signal....Pausing at initial $1425-$1435 trendline resistance, the next resistance is $1485. Long-term, my work projects a $1600 objective....Bullish for gold also is the recent action in gold mining stocks...Gold stocks lead bullion higher during bull markets in gold."

Fed "All News Is Good News" As S&P Rises Above 3,000 While Bond Selloff Accelerates -Zero Hedge
"This is one of those mornings where bad news is good news for stocks, while good news is bad news for bonds... or in other words, any news is good for stocks. Despite fresh all time highs in US equities, where the S&P is set to open above 3,000 after closing at 2,999.9 on Thursday, world shares came within a whisker of posting their first weekly loss since May on Friday and the dollar was down for a third day, even as a stronger-than-expected U.S. inflation print failed to shake bets on Federal Reserve interest rate cuts. Earlier in the session, the MSCI index of Asia-Pacific shares outside Japan was down 0.1%, with the regional benchmark set for its first weekly decline since May, as investors continued to monitor trade tensions between the U.S. and China....China's trade surplus with the United States, a major source of friction with its biggest trading partner, rose to $29.92 billion in June from $26.9 billion in May....The dollar was lower for a third straight day, down 0.1%. A stronger-than-expected inflation print failed to shake convictions that the Federal Reserve will start cutting interest rates at a policy meeting later this month."

As Recession Fears Rise, Skittish Investors Sell Riskiest Junk Bonds -Wall Street Journal
"As anxiety over an economic downturn creeps higher, investors have been avoiding one of the riskiest markets for corporate debt. The amount of extra yield, or spread, investors demand to hold company bonds rather than safe government debt has jumped since March by 0.62 percentage point for triple-C-rated company bonds versus a 0.07 percentage point decrease for junk debt with higher double-B ratings. Bond yields rise when prices fall. The trend is concerning because it contrasts with the fresh records in stock prices and the widespread hunt for yield that fueled a world-wide rally in bonds. It is also troubling because companies with the lowest bond ratings are typically the most vulnerable to the effects of an economic downturn....Investors are closely watching for signs of weakness in corporate bonds because the U.S. government market has begun to send signals that the economy could be heading for a recession....The decelerating economy in the U.S. 'is definitely worrying, especially if you look at the slowdown in China,' said Tracy Chen, a bond manager at Brandywine Global Investment Management....Federal-funds futures, which investors use to bet on central bank interest-rate moves, show a rate cut is priced in for later this month."

The Golden Rule Is as Golden as Ever -Reed/FEE
"Whenever you think it might have first happened, and whether you believe it was God-inspired or evolutionary happenstance, it was a great day in human history when individuals decided to treat others the way they themselves would want to be treated....The very essence of a free marketplace is voluntary, mutually-beneficial exchange...most transactions are wins for everybody. Each trader believes that what he's trading for is worth more to him than what he's giving up. This is only true when trades are entered into freely. If a party is forced to trade, he almost certainly believes he'll be worse off after the fact. Compulsion is as incompatible with the Golden Rule as fraud. In the marketplace, we offer each other something of value. If another party says, 'No, thank you,' we don't pull out a gun and demand that he trade. If we did, we certainly wouldn't be doing to him what we would like him to do to us. This is why socialism nullifies the Golden Rule. Socialists proclaim 'solidarity with the people.' They say they only want to help others. The problem is how they seek to do it...There's abundant truth in the popular internet meme that says, 'Socialism - Ideas So Good They Have to Be Compulsory.' The Golden Rule demands that we respect each other's differences, find common ground, and deal with each other voluntarily....If you're a socialist, you need to ask yourself why you want to handle so many issues and problems at gunpoint. Why must the cops (government force) be involved in everything? Where's your faith in and respect for your fellow citizens? The Golden Rule is as golden as ever. It's just that some people earnestly think they have something better in mind for their fellow citizens."

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