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1.19.18 - Wells Fargo Glitch Empties Accounts

Gold last traded at $1,333 an ounce. Silver at $17.03 an ounce.

NEWS SUMMARY: Precious metal prices rose Friday on U.S. government shutdown worries. U.S. stocks traded mixed as blue chip stocks fell and politicians attempt a budget deal before midnight deadline expires.

Wells Fargo Glitch Leaves Customers With Empty Bank Accounts -CBSlocal
"Many Wells Fargo customers got a terrifying shock after finding their checking accounts drained due to a series of errors by the embattled bank. The Jan. 17 glitch reportedly emptied several customers’ accounts after processing their online bill payments twice and doubling transaction fees. According to CBS News, the banking error also triggered overdraft fees on many checking accounts as customers around the country were mistakenly informed they had a zero balance. The bank's phone lines were reportedly jammed through the night as angry customers demanded answers for the embarrassing mistake. Wells Fargo later put out a brief statement on Twitter explaining the situation. 'Some customers may be having an issue with their Bill Pay transactions. We are working to fix the issue and resolve this tonight. Thanks for your patience.' -Wells Fargo. The social media outrage was immediate as customers replied to the statement, many who were left without a way to pay for any goods. 'Utterly ridiculous, overdraft and in negative, four payments taken out twice...at gas station to be told that Wells Fargo card has been rejected only then found out by logging into online wells fargo account. SERIOUSLY!!! I wonder who will compensate the customers for the stress of this!!!' - Maheen Khan"

In November 2014, Swiss America chairman Craig R. Smith wrote the bestselling book, Don't Bank On It! The Unsafe World of 21st Century Banking. Since then Americans have witnessed (and often experienced first-hand) one crisis after another related to the pitfalls of keeping their money safe from; cyberhacking, banking glitches and the government's ongoing war on cash. Discover why it is wise to have alternative forms of money readily available so that your financial life remains in your own control in any situation - request a FREE Executive Summary of DON'T BANK ON IT!

Venezuela Venezuela's economy on the brink of collapse -CNNMoney
"You can't get $1 out of the bank in Venezuela, I tried. Four hours. Four banks. Six cents. This was a typical day in Caracas, Venezuela, capital of the world's most miserable economy. In most of the world, getting a little money out of the bank is an errand, something forgettable. In Venezuela, for millions of people, it is complicated, tedious and surreal, or just impossible. I moved here a year and a half ago to cover the country's economic crisis as a freelance journalist. I knew how bad things were, but I never imagined the constant daily struggle to achieve even the simplest of tasks. As Venezuela has sunk to new depths, prices have skyrocketed, and the currency, the bolivar, has become next to worthless. Supermarkets and banks have become scenes of confusion and chaos: Are they open? Do they have money or food? How much can I get? Inflation is so rampant - some experts say it ran above 4,000% last year - that it has devoured people's salaries. As I write this, one dollar fetches about 191,000 bolivars, according to the black market exchange rate that everyone uses....At 1:23 p.m., I finally presented my check and got the hard-earned cash: 10,000 bolivars, or 6 cents....With my 10,000 bolivars in hand four hours later, I met a friend for a coffee. My cappuccino cost 35,000 bolivars."

Gold bounces higher on risk of U.S. government shutdown -Marketwatch
"Gold prices climbed Friday, attempting to erase a loss for the week, as the risk of a U.S. government shutdown helped the precious metal rebound from the biggest one-day decline in more than a month. 'With the dollar struggling to gain ground and at the mercy of political uncertainty in Washington, the yellow metal is likely to remain buoyed,' said Lukman Otunuga, research analyst at FXTM. 'Taking a look at the technical picture, Gold continues to fulfill the prerequisites of a bullish trend as there have been consistently higher highs and higher lows,' said Otunuga. 'There is a possibility that a new higher low has been created at $1,324.15 and as such could provide a foundation for bulls to elevate prices back towards $1,340. A decisive breakout and weekly close above $1,340 could pave a path towards $1,360,' he said....The House on Thursday passed a one-month spending bill that would keep the government funded through Feb. 16. But the stopgap measure lacks support to clear the Senate and the current interim funding bill expires at 12:01 a.m. Eastern Time on Saturday. U.S. economic data released Friday was downbeat, with consumer sentiment for January falling to a six-month low."

A protracted cryptocurrency crash would 'spill over' into stocks -CNBC
"A sustained sell-off in the cryptocurrency market will hit the stock market where it hurts, one major Wall Street firm warns. It's a scenario investors are underestimating, according to Wells Fargo Securities' Christopher Harvey. 'We see a lot of froth in that market. If and when it comes out, it will spill over to equities,' the firm's head of equity strategy said Tuesday on CNBC's 'Futures Now.' 'I don't think people are really ready for that.' Harvey's comments came as bitcoin, the cryptocurrency market's largest player, tanked. It plummeted 20 percent over two days, recouped much of those losses and then plunged below $10,000 Tuesday afternoon on Coinbase....In a worst-case scenario, he sees it affecting technology stocks first and then financials. Harvey believes investors don't recognize how much exposure they may have to the cryptomarket through stocks."

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1.18.18 - New Bull Market in Gold Has Begun

Gold last traded at $1,329 an ounce. Silver at $17.08 an ounce.

NEWS SUMMARY: Precious metal prices rose Thursday on safe haven buying and a weaker dollar. U.S. stocks retreated a day after the Dow closed above a new frothy peak of 26,000.

The Next Great Bull Market in Gold Has Begun -Rickards/Daily Reckoning
"A new, long-term, secular bull market in gold has begun. This new trend will take gold past $1,400 per ounce by the end of 2018, past $4,000 per ounce by 2020 (if not sooner) and ultimately to $10,000 per ounce or higher by the mid-2020s. This bull market actually began on Dec. 17, 2015, when the dollar price of gold sank to $1,051 per ounce. That's OK. Bull markets begin slowly, almost unnoticed in the gloom of the prior bear market. The biggest gains often come after a few years when the crowd catches on and the price action gains momentum. This new bull market in gold is the real deal and should last until 2028 or beyond. The moves so far have been relatively small compared with what's ahead. This is the perfect time to make your allocation to physical gold, gold mining shares and gold royalty companies or 'streamers.' The last secular bull market began on Aug. 25, 1999, when gold bottomed at $252 per ounce. From there, it began a spectacular 12-year run until peaking at just under $1,900 per ounce on Sept. 2, 2011. The 1999–2011 bull market represented a 655% gain over the starting price, easily outpacing stocks, bonds, emerging markets and other competing asset classes."

We agree! An exciting new bull market in gold is now upon us, which should lift both bullion and classic U.S. gold coin prices. However, that's just one of six good reasons to add to your gold holdings this year which are detailed by respected financial analyst Axel Merk in our FREE 2018 Real Money Perspectives newsletter, The Future of Money.

shutdown Washington's Dare Game -Fox News
"A blame game will consume Washington if the government shuts down this week. But first, lawmakers from both sides of the aisle must play the dare game. Republicans will essentially dare Democrats to vote no on an interim spending plan to avoid a shutdown. If Democrats vote yes, the government remains open. But if Democrats cast nay ballots, Republicans will try to turn that decision against vulnerable lawmakers in the midterm elections. By the same token, Democrats will dare Republicans to reject the same stopgap plan. This is a hope that the GOP - wielding majorities in both the House and Senate and President Trump occupying the White House - will present themselves as incapable of governing. A nay vote by Republicans could trigger a government shutdown. Democrats will cast the shutdown as emblematic of the bedlam associated with the Trump presidency. The irony is that neither side truly wants to stumble into a government shutdown this weekend. But Republicans and Democrats alike are daring the other side to do so....So first, there's the dare game. We'll likely know today which side won the dare. But if the government shuts down, we may have to wait until November to see who emerged victorious in the blame game."

Cryptocurrency Crash Sparks Bitcoin's Nouveau Riche to Run to Gold -Bloomberg
"Amid the wild Bitcoin ride that's wiped more than 40 percent off the cryptocurrency’s price in a month, a pattern may be emerging: sellers are switching out of digital gold and into the real thing. Bullion dealer Sharps Pixley regularly sees trades north of a million pounds, while sales of gold coins at Frankfurt-based CoinInvest jumped fivefold as the largest digital asset collapsed after surging 1,400 percent last year, according to Director Daniel Marburger. The current price swings across seemingly every cryptocurrency are bringing to the fore a question that has loomed over the industry since its inception: to what extent can a virtual asset be a store of value? By swapping out of digital gold and into the real thing, some investors may be providing an answer. Customers as young as 25 come in carrying laptops holding bitcoin they accumulated when it traded at $1 or below. One had 1,000 bitcoin he intends to turn into physical metal. The company doesn't take possession of bitcoin. Customers buy via an intermediary. 'Bitcoin is a bit of a lobster pot - it's easy to get in, but hard to get out,' said Ross Norman, a gold dealer with a store tucked in a corner of London frequented by the upper classes. 'Gold also offers investors 4,000 years of history as a store of value, and that’s looking quite appealing right now.'"

Banking Expert's Big Bitcoin Warning: How I Lost It All -Motley Fool
"Back in 2013, Matt Koppenheffer bought some Bitcoin when it was trading at just $768. And he never sold. With Bitcoin trading at about $16,250... Mr. Koppenheffer should be sitting on a 2,016% gain. Instead, he has zero... and some big recommendations for those wanting to profit off the Bitcoin frenzy. Even though he never sold a single bit of his Bitcoin, the exchange he used, VirWoX, began charging account inactivity fees - in Bitcoin - that munched away at his balance until he had nothing left. So much for long-term investing in Bitcoin, right? Matt is a colleague of mine who was the banking and financial services bureau chief for the Motley Fool, and host of 'Where the Money Is,' one of the top-rated business podcasts on iTunes. He recently showed me his account statements. It was amazing to see his balance head downward even as Bitcoin soared upward! As Matt told me, 'Don't make the same mistake as I did. It's still the Wild West when it comes to Bitcoin wallets and trading, so don't make any assumptions. Be careful!'"

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1.17.18 - Dow 26k: Market's "Euphoria Phase"?

Gold last traded at $1,328 an ounce. Silver at $17.04 an ounce.

NEWS SUMMARY:Precious metal prices hovered near 4-month highs Wednesday on a flat dollar. U.S. stocks rebounded on better-than-expected major bank earnings.

Bitcoin Sinks 50%, Below $10,000 -Bloomberg
"Bitcoin tumbled below $10,000, bringing its loss to almost 50 percent from a record set only a month ago, as increased scrutiny from regulators around the world weighs on the digital-coin craze. The largest cryptocurrency dropped 10 percent to $9,610.05 as of 9:33 a.m. in New York, its first foray below $10,000 since Dec. 1, according to consolidated pricing data collated by Bloomberg. It has fallen from a record $19,511 reached Dec. 18, and seen more than $140 billion shaved off its market value. The selloff this week brings more trauma to a digital-coin market that has lost more than $300 billion in value just since Jan. 13. After a dizzying rally pushed Bitcoin higher by 1,400 percent last year, the latest plunge cast doubt on the viability of cryptocurrencies and the blockchain technology that underpins it. The most recent signs of a regulatory clampdown have come out of Asia, a hotbed of bitcoin trading. In South Korea, regulators warned they may shut down cryptocurrency exchanges, while China is said to have intensified its curbs on trading of the digital coins. In the U.S., the Securities and Exchange Commission asked at least 15 funds to pull applications this month for bitcoin-related exchange-traded funds."

Get the facts about the cryptocurrency craze in our free 2018 Real Money Perspectives newsletter, The Future of Money.

crash Is Dow 26,000 a sign that stocks are getting risky?-Shell/USA Today
"The Dow Jones industrial average's more than 1,000-point rise from 25,000 to "26K" in the past seven trading days has some investment pros warning that the nearly nine-year-old bull market may be entering its "euphoria phase" - which typically marks the final stage of a long, upward climb for stocks....This stretch of a bull market is characterized by higher share prices, rising investor optimism and fresh cash being funneled into the stock market by investors who fear missing out on gains despite the market's lofty levels....Main Street investors, who have been on the sidelines for most of the nine-year bull run after getting burned in the last market crash in 2008-09, are turning more optimistic. Last week, the number of individual investors who said they were "bullish" jumped to nearly 60%, the highest reading in more than seven years, according to the American Association of Individual Investors....Too much exuberance could be a dangerous thing, as it suggests Wall Street has gone from not just positive on stocks but 'all in,' says Brad McMillan, chief investment officer for Commonwealth Financial Network. 'We seem to be seeing that now.'"

A Weak Dollar Stirs A Toxic Stew -Alhambra Partners
"The dollar appears to be starting another downleg, breaking support last week to make a new low for this bear move. Next support is at the rising trend line at about 86 but a countertrend rally seems likely before a test of that level....A weaker dollar generally means stronger commodity prices and that is exactly what we've seen since the start of the year. Gold, in particular, has resumed its uptrend, not a particularly positive sign for future US growth. This is the easiest way to see how a weak dollar tends to offset the positives of tax reform. We experienced this before in the George W. Bush administration which paired a tax cut with a weak dollar policy and we know what that got us....I suspect markets - especially stocks - are in for a bit of a reality check. Expectations for growth are sky high and if I'm right about tax reform being a short tern negative, we are set up for disappointment....I am increasingly concerned about the impact of the falling dollar...A falling dollar drives investment to hard assets like gold, real estate and commodities."

Peak Gold Production Could Drive Prices Up -Money Morning
"Peak gold represents a watershed event for the yellow metal....In short, peak gold is the year in which gold miners extract as much of the yellow metal out of the ground as they ever will. Since 2015, production from gold mines has been flattening, according to data from Metals Focus. If the estimates for 2017 prove correct, peak gold happened in 2016. Metals Focus foresees a further decline this year. 'We're pretty close to [peak gold] if we're not at it,' World Gold Council Chair Randall Oliphant told Bloomberg last September at the Denver Gold Forum. Peak gold will fundamentally change the gold market by permanently restricting supply. And that in turn will serve as a major catalyst to gold prices and gold mining stocks for... well, forever....The shrinking supply is bound to drive prices up as gold-buying demand at least remains steady in 2018 and beyond. This is the perfect storm gold investors have been waiting for."

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1.16.18 - China Downgrades US Credit Rating to BBB+

Gold last traded at $1,334 an ounce. Silver at $17.15 an ounce.

Why cryptocurrencies cannot be digital gold -Forster/Financial Times
"I struggle to understand why so many are still cheerleading for crypto, especially the technorati. The entire edifice is so evidently internet bubble 2.0, plus a huge concomitant energy-hogging environmental impact. Digital 'assets' that can't be censored or counterfeited may be a technical marvel, but are not fit for purpose as currencies and none of it is scalable. Cryptos' underpinnings are worse than those of the dotcom era, as billions of people were already getting value from the internet at the time of that bubble. Crypto is not 'digital gold', justifying market capitalizations equivalent to the world's gold holdings. Gold and other precious metals have no substitutes - there is only one periodic table. While there may be scarcity of any given cryptocurrency, there is an infinite number of possible cryptocurrencies and so no sustainable scarcity value. Millions will be burnt financially when the bubble bursts. Everyone needs to be educated about this Ponzi-like madness."

Mr. Forster poses some very good arguments. Because the jury is still out on the future of bitcoin and cryptocurrencies, now is the time to understand the pros and cons before taking action. Get the facts in our free 2018 Real Money Perspectives newsletter, The Future of Money.

Aloha Aloha Apocalypse – How Prepared Are You? -Pontification Blog
"'Ballistic missile threat inbound to Hawaii,' said the warning sent Saturday morning to 1.4 million island state residents. 'Seek immediate shelter. This is not a drill.' But the terrifying alert from Hawaii's Emergency Management Agency was the result of a test in which 'an employee pushed the wrong button' during a shift change, Governor David Ige (D) later announced. Within three minutes the U.S. Pacific Command confirmed that North Korea had launched no missile at Hawaii, so cool and steady President Donald Trump continued his golf game in Florida. In Hawaii, however, the badly-mismanaged, state-caused alert spread for 38 minutes before being fully countermanded. Residents are accustomed to dire warnings, such as the tsunami warning that once caught my wife and me on Maui....What could make us safer today? America needs to become more decentralized, resilient, and self-reliant, not dependents on ever-bigger, more centralized government handouts that could vanish in national emergencies...If we do this, the warning of Hawaii could prove to be a sobering blessing."

Dow Industrials Top 26000 for First Time -Wall Street Journal
"The Dow Jones Industrial Average crossed 26000 for the first time Tuesday, just seven trading sessions after closing above its last 1000-point milestone. The blue-chip index gained 273 points, or 1.1%, to 26076 shortly after the opening bell. If the Dow industrials close above 26000, the jump from 25000 would be the fastest 1000-point leap in its 120-year history. Tuesday's historic rise builds on the Dow's 25% gain last year and its seemingly unstoppable climb to start 2018....'We have a high level of confidence in fourth-quarter earnings numbers,' said Tom Wright, head of equities at JMP Securities. 'But there's an even higher level of optimism around what forward guidance will be now that we have a new corporate tax structure."

2018: The Year of Living Dangerously -Rickards/Daily Reckoning
"I'm calling 2018 'The Year of Living Dangerously.' That description might seem odd to lot of observers. Major U.S. stock indexes keep hitting new all-time highs. 2017 went down as the first calendar year in which the Dow Jones industrial average was up for all 12 months....To understand why 2018 may unfold catastrophically, we can begin with a simple metaphor. Imagine a magnificent mansion built with the finest materials and craftsmanship and furnished with the most expensive couches and carpets and decorated with fine art. Now imagine this mansion is built on quicksand. It will have a brief shining moment and then sink slowly before finally collapsing under its own weight....What happens when you print $8.3 trillion in money and only get $2.1 trillion of growth? What happened to the extra $6.2 trillion of printed money? The answer is that it went into assets. Stocks, bonds, emerging-market debt and real estate have all been pumped up by central bank money printing....'Inflation' is not in consumer prices; it's in asset prices....Student loan debt is over $1.4 trillion, and default rates are over 20%....The tax bill will add $2 trillion or more to the deficit, something the U.S. can ill afford....A catastrophic wave of emerging-market defaults is coming....A war is coming between the U.S. and North Korea, probably by this summer."

China Downgrades US Credit Rating From A- To BBB+ -Zero Hedge
"Chinese credit rating agency Dagong downgraded US sovereign ratings from A- to BBB+ overnight, citing 'deficiencies in US political ecology' and tax cuts that 'directly reduce the federal government's sources of debt repayment' weakening the base of the government's debt repayment....'Deficiencies in the current U.S. political ecology make it difficult for the efficient administration of the federal government, so the national economic development derails from the right track,' Dagong said adding that 'Massive tax cuts directly reduce the federal government's sources of debt repayment, therefore further weaken the base of government's debt repayment.'....'The virtual solvency of the federal government would be likely to become the detonator of the next financial crisis,' the Chinese ratings firm said....'The market's reversing recognition of the value of U.S. Treasury bonds and U.S. dollar will be a powerful force in destroying the fragile debt chain of the federal government,' Dagong said."

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1.12.18 - Gold's Amazing Rate-Driven Rally

Gold last traded at $1,334 an ounce. Silver at $17.14 an ounce.

NEWS SUMMARY: Precious metal prices rose to 5-week highs Friday on strong fundamentals and a declining dollar. U.S. stocks rose as J.P. Morgan Chase, BlackRock and Wells Fargo all reported better-than-expected quarterly earnings.

Gold Confounds Skeptics With Rate-Driven Rally -Seeking Alpha
"The yellow metal is on track for its fifth straight weekly gain....Many stock market and gold bulls view rising rates as a confirmation that the U.S. economy is improving. This has provided them with an extra incentive to increase their holdings in both asset categories. Gold, however, is also benefiting from the gradual increase in inflation. This steadily rising inflationary pressure is clearly reflected in the extended rally in crude oil price and has only recently begun to be reflected in gold and other commodity prices...Consequently, when oil prices are on the upswing gold prices normally follow the lead soon thereafter....It should also be mentioned that as the dollar's value weakens, the euro currency rises, which also serves to boost demand for gold by making dollar-priced bullion cheaper for European investors....Market forces remain technically favorable for continued rising prices, and the historical pattern for a bullish January for gold is also to the metal’s benefit."

crypto Why blockchain is a belief system -Alphaville/Financial Times
"In an interview with Fox Business on Tuesday, JP Morgan CEO Jamie Dimon back-pedaled on his September claim that bitcoin is a fraud 'worse than tulip bulbs'. He said 'he regretted' making the remarks because they dismissed the technology in broad terms....According to Bloomberg, Dimon 'believes in blockchain' - a turn of phrase that speaks volumes about the state of the technology being advocated. However, 'blockchain' as a phrase is entirely meaningless. For the most part it is just a bundle of pre-existing technologies brought together in a cryptocurrency context to solve a problem most of the regulated financial system does not have: a lack of trusted intermediaries....To all other extents and purposes, blockchain in its original bundle is not cheaper to run, not more efficient to operate and certainly not faster than the conventional settlement system. Proof of this comes in bitcoin's own payment dysfunctionality. Moreover, since banks don't actually want or need immutable ledgers or trustless systems, that leaves only one aspect of the technology with any potential use: its resilience and security features against hacking. Ironically, this feature is often the first thing dropped by those adapting the tech for official business due to its expense."

The Gift Horse Of Government Shutdown -Daily Caller
"The threat to shut down the government if Republicans don't provide for some sort of legal status to the so-called Dreamers. To which I say: Don't look a gift horse in the mouth. Regardless of where you stand on immigration - wall up or open borders - the proper response to Democrat threats of government shutdown is: 'You promise?' The short of it is this: If Congress doesn't pass a bill to fund the government by January 19, the government will 'shut down.' In order to pass such a measure, Republicans need at least some Democrats. But Democrats are refusing to support any such spending bill unless it includes legal status for the so-called Dreamers and Republicans refuse to do that without border security measures that Democrats so far say they will not support. The president should view this not as a bind - but as a boon. The Democrats are threatening something that libertarians have longed for, but have never had the political clout to carry through. If libertarian-leaning members of Congress can't find the chutzpah to corral this Democratic gift horse, let's hope President Trump brings his best bravado to the stand-off, and says 'make my day' and not 'make a deal.'....Now it would be better to make targeted cuts than having an untargeted government shutdown. But a government shutdown might actually get that conversation started about getting us to a smaller, more sustainable government. Something more like what the Founders envisioned when they wrote the Constitution."

Pew: US media bias ranks worst in the world -Washington Examiner
"More than in any other country, Americans on both sides of the political aisle believe the media does a poor job covering political issues fairly, according to a blockbuster new survey of media consumption in 38 nations. What’s more, the Pew Research Center's study found that supporters of President Trump believe the media is doing a worse job covering politics than the supporters of any of the other international political leaders in countries surveyed....The survey found that just 21 percent of Americans supportive of Trump and Republicans believe the media is fair. Some 55 percent of those who don’t back Trump also believe the media is fairly covering politics in the U.S."

North American Bitcoin Conference No Longer Accepting Bitcoin Payments -Slate
"The North American Bitcoin Conference, which will take place in Miami next week, is no longer allowing people to pay for tickets with cryptocurrencies due to 'network congestion and manual processing' issues. The ticketing page for the conference notes that it had accepted such forms of payment up until 14 days before the event, but that bitcoin transactions would not be possible for last-minute buyers because of 'print deadlines.' Moe Levin, the conference's organizer, told Bitcoin.com, 'We wish this was easier, but no ticketing options exist which can handle large volumes of ticket sales, and transaction fees on the Bitcoin blockchain exceed $30 at certain times of the day.' His team is reportedly trying to find a way to implement cryptocurrencies with lower transaction fees, such as bitcoin cash, into the payment system. Yet, as Levin notes, it's difficult to set up crypto payments when ticketing services like Eventbrite don't accept bitcoin yet. The news underscores concerns that Bitcoin is, at the moment, virtually useless for making payments. A number of vendors have actually stopped accepting it for purchases due to its wildly fluctuating value and high transaction fees."

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