When the Tree Falls Down… or the House Floods

In 1990, my wife and I celebrated our first Christmas together. We were broke.

We had enough to eat, but I balanced our checkbook to the penny and we carried an uncomfortable balance on our credit cards.

We tried to save money wherever possible, including paying $ 8 to “cut your own” Christmas tree and then making decorations by painting wooden clothes pins.

Some of it worked, some of it didn’t.

Using paint, pens, and paper, my wife turned the clothes pins into horses and cowboys, which was very fitting for our first holiday season in Texas. That was a win.

The tree, however, didn’t turn out so well.

To save money, I nailed two pieces of wood in an X shape into the trunk as a makeshift stand. We had two cats at the time, strays that had wandered up on a co-worker’s porch. In the middle of the night, we heard a loud crash and, upon investigation, found the cats had crawled up the tree, knocking it over and breaking the precarious stand.

As my wife reminds me, I used colorful language to address both the cats and the tree at 2 a.m. as I forcefully tried to get the thing back in place. It didn’t work. The wood broke into pieces and I more or less propped up the tree in the corner for the rest of the season.

I don’t try to make wooden tree stands anymore, but we still have a few of those caballeros and horses in our decorations box.

In subsequent years, we added ornaments, stockings, and decorations that have come to represent different people and times in our lives. The ones that are fleeting remain in the storage box, but those with a strong tie seem to make it onto the shelf or tree, no matter how dated or damaged they’ve become.

It’s the same thing with gifts.

I don’t remember anything my wife and I exchanged that first Christmas. I’m sure it’s all long since disappeared. But over time we’ve given things – jewelry, clothing, sports equipment, etc. – that have become special. Not for value’s sake, but because they were thoughtful and hold memories better than we can just in our minds.

These gifts, along with all the decorations, act as positive memory triggers, and bring back a flood of warmth that is dearly welcome each year. My association with these things allows me to relive and recall some of the best people and times in my life.

The notion of things, particularly Christmas things, holding memories and being dear was brought home recently by Hurricane Harvey. As we mucked out my sister’s house, removing mud, walls, insulation, etc., we also threw away items that were stored at ground level and had been damaged.

Her ornament boxes were 24 inches tall and all filled with water. Items that had been carefully stored year after year were now floating in dirty water.

In the craziness of 15 people trying to cut out walls, tear out insulation, and get ruined furniture to the curb, my first inclination was to simply throw out all the Christmas things.

Thank goodness I didn’t. Things matter.

And at the time, most of her things, along with those of hundreds of thousands of other people in our area, were being thrown away.

My sister and her husband have the wherewithal to rebound. They don’t worry about paying bills, and their home is almost back to normal. Their traditions remain alive, and of course they, like everyone else affected by the storm, recognize that their health and safety is the biggest blessing. But no one wants to lose the treasures of the past, precisely because they link us to our past.

The items she was able to save are now more precious… and I bet they’ll be stored on higher ground in the years to come.

May the rest of your Christmas be merry and bright, and may wonderful memories flow from your decorations and items you’ve shared, even as you create more.

Rodney Johnson
Follow me on Twitter @RJHSDent

The post When the Tree Falls Down… or the House Floods appeared first on Economy and Markets.

Rodney Johnson – Economy and Markets ()

House Passes Watered Down Tax Cuts; Ed Steer: Gold/Silver Price Management Scheme

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up we’ll hear a fantastic interview with first time guest Ed Steer of Ed Steer’s Gold and Silver Digest and also board member at GATA. Ed talks about a strategy that many mining companies are employing today that will have a long term and detrimental impact on the future supply of gold and silver. He also reveals how manipulation in the precious metals markets is poised to backfire. Don’t miss a wonderful interview with Ed Steer, coming up after this week’s market update.

Despite a big decline in crude oil prices and a slightly stronger dollar this week, precious metals markets are holding their own. Gold prices currently check in at $ 1,286 an ounce, up 0.8% since last Friday’s close. Silver is up 1.0% this week to trade at $ 17.11. Platinum prices come in at $ 944 per ounce, while palladium is trading at $ 993 as of this Friday’s recording.

On Thursday, President Donald Trump went to Capitol Hill to try to rally Senate Republicans behind tax reform legislation. The House passed its version of the bill yesterday. But many promising reforms have now been watered down or walked back completely in order to appease special interests and Big Government Republicans.

The Washington establishment has dashed the great hope of being able to cut out all the loopholes and needless complexity from the tax code, to lower rates dramatically across the board, and to allow Americans to file their returns on a postcard.

The multi-billion dollar tax compliance industry will continue to thrive, as will promoters of tax avoidance schemes such as offshore trusts. The line between legal tax avoidance and illegal tax evasion isn’t always clear, especially when it comes to complex financial structures and offshore arrangements.

There is rarely any legitimate tax benefit to be gained from owning assets overseas. And there are additional tax burdens, such as so-called “FATCA” foreign account reporting requirements. The FATCA rules make it difficult for U.S. customers to even open foreign bank accounts these days. In fact, many banks outside the U.S. don’t want anything to do with Americans because of all of the regulatory hassles.

It’s still possible to own and store gold coins in a safe located in a foreign country without triggering foreign account reporting requirements. But some offshore gold programs, including some digital gold accounts, are subject to FATCA rules. Others are in a gray area where not reporting the foreign gold holdings could be considered illegal depending on how IRS bureaucrats decide to interpret the law.

Some offshore promoters claim that holding precious metals outside of the country will protect them from the threat of confiscation in the United States. Much like promoters of specialty “rare” coins, offshore promoters tend to exaggerate the confiscation threat while failing to mention solutions that might be less expensive and less risky.

There’s no reason to believe other governments are inherently less prone to seize assets. Even Switzerland’s once sterling reputation for financial privacy and asset protection has been tarnished in recent years.

The super rich and people who travel abroad regularly may find it useful to store some gold in a vault in another country. But most people should keep their gold closer to home where they can access it whenever the need arises.

But that doesn’t mean your only choice is to keep your metals in your house. One good alternative to that is setting up a storage account with Money Metals Depository – which offers segregated storage at the lowest fees in the industry and free shipping when you buy for or sell from your storage account.

In the case of high-premium numismatic coins that are touted as “confiscation proof,” the same supposed legal protection can be gained from American Eagles. Popular gold and silver Eagles are considered by law to be numismatic.

Other coins that are just as historic as their “rare” counterparts can be had for bullion-like prices because they aren’t slabbed and graded. For customers who prefer to own coins with some history behind them, Money Metals Exchange is happy to sell Gold Libertys and Saint Gaudens Double Eagles from the early 1900s as well as Pre-1965 silver dimes, quarters, and half dollars and also circulated Peace and Morgan silver dollars. We just don’t sell versions of these coins that carry hefty numismatic mark ups.

At the end of the day, getting more metal for your dollars is a better hedge against economic and political risk. During a crisis, you may need to sell or barter with portions of your precious metals stash. Graded coins and proof finishes may not command any premium, as is the case now with a lot of these coins being sold into a relatively soft retail market. Keep in mind that the most widely recognized bullion products in the most common sizes will always be the most liquid and useful.

Well now, without further delay, let’s get right to this week’s exclusive interview.

Ed Steer

Mike Gleason: It is my privilege now to welcome in Ed Steer of Ed Steer’s Gold and Silver Digest. Ed has covered the precious metals markets for going on two decades now, having written for Casey Research prior to his latest project, and is also the director at GATA, the Gold Anti-Trust Action Committee, where he and his colleagues work to expose the manipulation in the gold and silver markets.

It’s a real pleasure to have him on with us today. Ed, welcome, and it’s great to finally have a chance to talk to you. Thanks for coming on.

Ed Steer: Well, thanks for having me, Mike.

Mike Gleason: First off here, Ed, I wanted to have you set the stage for a lot of what we’re going to talk about today, that being this big disconnect between the demand in the physical market and the futures market price. Explain how that all works for our listeners, who might not understand how there can be so much physical demand for metals throughout the world without prices moving higher. If you would, walk us through how the futures markets have allowed bankers to control prices by using paper silver and paper gold, which has an unlimited supply to meet demand.

Ed Steer: It’s actually very simple, really. Supply and demand really don’t enter into the picture as far as precious metal prices go. And that’s for the very simple reason that the price of the product, gold, silver, platinum, or palladium, is set in the COMEX futures market in New York. It’s not set in London, it’s not set in Shanghai, it’s not set anywhere else in the world. It’s set in the COMEX futures market in New York. I want to put that to bed right away.

And the fact of the matter is that eight traders – Ted Butler, silver analyst Ted Butler’s been working on this for decades now, three decades, as a matter of fact – eight traders, all of them US banks or investment houses, are short more than 50% of the entire COMEX futures market, open interest in gold and silver, platinum and palladium. They all work in collusion and they all buy at the same time, they all sell at the same time. When you control more than 50% of the market, you control the price. It’s as simple as that, and that’s the reason why prices are where they are today, regardless of what supply and demand is.

Mike Gleason: You wrote an article just yesterday about bullion banks once again increasing their already massive short position in the futures markets. They’re busy selling paper to any and all comers. It looks like, despite all the evidence of cheating and price rigging, very little has changed. But what is your sense? Are the bullion banks showing any concern about the lawsuits being brought by clients they have cheated, or is it business as usual?

Ed Steer: I’ll tell you what. I really don’t know what’s going on under the surface, but on the surface when you look at the face of it and the daily price activity, it certainly looks like business as usual to me. As a matter of fact, the price management scheme in the last year or so has become even more intense as these eight traders, especially the big four, J.P. Morgan, HSBC USA, Scotiabank, and probably Citigroup, have become more and more … The short position has become more and more concentrated with them. Nothing has really changed that we can see. There are signs under the surface which, if you want me to go into, I certainly can, that things are changing. But regardless of the fact of what’s going on under the surface, this can’t and won’t last forever.

Mike Gleason: Why hasn’t the mining industry been more vocal about the manipulative schemes by these bullion banks and central planners? This is something I’ve talked to First Majestic’s Keith Neumeyer about. He is very outspoken on the subject, and has actively recruited fellow mining execs to join him in speaking out about this. But, so far at least, he has gotten zero support. This is just mind boggling to me. Why are they silent, and why is Keith Neumeyer a lone voice here when it comes to speaking out against this practice in the futures markets that is suppressing the price of the product these mining companies sell? Any thoughts as to why more aren’t crying foul?

Ed Steer: Well, thank you for answering half of the question for me, because I was going to mention that Keith Neumeyer has been the only voice in the wilderness over the last several years. I’ve talked to Keith. I know Keith well, and he’s brought this up with his colleagues at the big mining companies in the U.S. Why he can’t get any traction with these guys, I just don’t know.

The mining executives and the big CEOs of these mining companies are paid well, they get good compensation, they have stock options up the wazoo, they’re sitting pretty. I don’t think they really care about what the average shareholder suffers in this thing. Why they don’t want to go after higher silver prices, I would suggest that they’ve been basically told that this would not be a very good idea. So I just do not understand for the life of me why they aren’t up in arms about this, because if I was in the silver mining industry I certainly would be. And my congratulations to Keith for all his efforts.

Mike Gleason: Speaking of miners, I’ve heard you talk about how these mining companies are changing their mining plans to high grade, which is going to hurt the shelf life of these mines. Now, we know how difficult it can be to get a new mine up and running and how long the exploration and permitting process can be. Talk about how damaging it is to the future supply of gold and silver for all these mines to change course and high grade. What is high grading, and what are the long-term effects for future supply as a result of that, Ed?

Ed Steer: Well, the problem with mining is it’s a low margin business. And in order for most mining companies to stay profitable, they have to go after the highest grade ore in their mines. This is not all mines, but certainly some mines. They go after the highest grade because they need the maximum amount of gold production just to make ends meet and to keep the company solvent.

The problem with that process, of course, is the fact that when you change your mine plan to mine this ore, you have to leave a lot of stuff in the ground that you’re never going to be able to recover because your drifts go this way and then your tunneling goes that way. When you do that to high grade whatever section, then there’s a whole section of lower grade ore that, because of what they’ve done in high grading, they just can never recover.

So it is hugely detrimental to the mining industry, but some of the mining companies have no choice. And that’s certainly going to show up as a supply factor down the road, and it’s coming up hard in some cases. Certainly, within the next two or three years we’re going to see mining in gold and silver, the production, drop off precipitously.

Mike Gleason: You talked earlier about how the markets are not truly driven by fundamental supply and demand, so to speak. Eventually, will that become the determining factor in determining the price of gold and silver, is if we truly don’t have enough supply to meet the demand? Does it matter if they can continue to sell all these paper ounces, or will the fact that there’s just not the physical metal out there because of the things that you just talked about, will that actually factor in?

Ed Steer: Well, certainly the supply issue is critical. There’s a point where I don’t care how much paper you write, if the physical supply isn’t there when it’s demanded by the consumer, especially industrial consumer in the case of silver, then all the paper in the world isn’t going to help and they’re going to go after whatever silver they can get, whether it be on the COMEX or from whoever. At that point, the price management scheme will certainly fail spectacularly. But until the boys, the central banks and the bullion banks have reached that point, I don’t think they’re going to give up this fight. But they certainly are aware of the fact that their best use or use before date is coming up on them pretty hard. At some point it will matter, but right now it doesn’t.

Mike Gleason: What will the tipping point be? When does the system break? How will it break? Do you have any thoughts on how that might play out when the whole jig is up, as they say, in the gold and silver markets?

Ed Steer: Everybody wants to know when. They’ve been asking that question for, what, 10 years now at least? Nobody has the answer to that. As far as how it’s going to end, I would think that there’s only one way for this thing to end, and that’s spectacularly and suddenly. I can hardly wait for that day, as far as I’m concerned, but as I said, until that day arrives it appears, at least on the surface of everything, to be business as usual.

Mike Gleason: A lot of people are just waiting for the incredibly overvalued stock market to finally undergo a correction, perhaps a very big one. Talk about what you think will happen to the metals in that situation. Could it look like the 2008 financial crisis, or how might it look different this time around? In that scenario would we see a flight to save havens that will drive the price up massively, or will we see a similar situation where the metals get taken down along with equities, at least initially? Where do you put the odds of a major stock market collapse, and if that happens, how do you expect the metals will respond, Ed?

Ed Steer: Well, all the markets out there, whether it be the financial markets or the stock markets or the bond markets or the currency markets, everything is managed. As Chris Powell of GATA said back in 2008, there are no markets anymore, only interventions. And if we see a big stock market correction, I would suspect that we’ll see gold and silver and the shares get hit equally as hard, but that won’t be because of supply and demand factors or because people aren’t buying. It’s because the boys just want to prevent people from having any safe haven out there. But at some point, they are going to get overwhelmed, but they’re going to do everything they can to prevent people from running to the precious metals.

If you look at the gold and silver charts this morning, the dollar index was heading lower and the gold and silver prices were heading higher. Then, as soon as the COMEX opened, they turned the dollar index and gold and silver got hit and they were both down on the day. It’s just kind of micro price managements going on hour-by-hour, day-by-day.

I would think that if we do see a major stock market correction, the boys will be standing by to make sure that none of that money runs into gold and silver. They’ll hit the price. But I would expect that sometime, like in 2007, 2008, regardless of that fact, there will be some sort of tipping point where enough people go into the market so it’ll drive the price higher. And I would expect that J.P. Morgan and the rest of the bullion banks will fight a hammer and tong until they’re down to their last COMEX contract.

Mike Gleason: Obviously there’s a very strong inverse correlation between equities and the metals, but also there is between the dollar and gold and silver. What do you see for the dollar coming up here? We’ve got a new Fed share coming up here at the beginning of next year. We’ve got another Fed meeting next month where it’s expected that they’ll raise interest rates. Any thoughts on the dollar and how that might impact gold and silver here in the short to intermediate run?

Ed Steer: Well, I can tell you right now that, despite the fact that the dollar index is down almost 1,000 basis points this year, it certainly hasn’t been reflected in precious metal prices. Like I said in the last question you just asked me, Mike, was the fact that if the dollar index goes down they don’t allow precious metal prices to rally that much. They were certainly in the market this morning when London opened, keeping the price under control, because it certainly wanted to blast higher.

The dollar index, like I said, has been down so much this year that that isn’t reflected in the prices either. They’re going to be fighting this thing all the way down, regardless of whether the dollar’s falling or the stock market is falling. They just do not want people to run from the paper markets into anything that’s solid. That includes the precious metals and any other physically traded commodity.

Mike Gleason: Any advice for the beleaguered and perhaps worn out metals investor who is processing all of this information about manipulation and feeling frustrated because metals continue to underperform other assets? What do you have to say to those folks as we begin to close here?

Ed Steer: Well, I can tell you this right now, this is not going to last forever. At some point, they’re going to have to give all this whole thing up and let the market find its true value. That’s just not in precious metals. I’m talking about the stock market, the bond market, the dollar index, because since the crash of ’87 the bullion banks and central banks of the world have been actively involved in keeping the markets up and going around the track.

As I said in my column this morning, I’ll just quote this for you, Mike, if you don’t mind. British economist Peter Warburton had this to say back in 2001. That was what, 16 years ago? Regarding the central banks and bullion banks, he says, “They incite investment banks and other willing parties to bet against the rise in the prices of gold, oil, base metals, soft commodities, or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the U.S. dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity they had against the fragility of the financial system by switching into a freely traded market for non-financial assets.”

Of course, that is the commodities market complex, with the precious metals market being the big case in point. The thing is that this has been going on now for almost a generation. And at some point, it’s definitely going to give way and we’re going to see brand new prices for everything and we’re going to see runaway inflation, and we’re going to see gold and silver at prices that, quite frankly, we couldn’t possibly imagine today. At that point in time, we’ll all be vindicated. The only thing we don’t know for sure, Mike, is when that day is coming. But it is coming.

Mike Gleason: It will be fantastic to truly finally have real price transparency, price discovery in these markets. It’s a long time coming. We’ll have to continue to wait and hopefully, that day will come relatively soon.

Well, thanks very much, Ed, for coming on and sharing your thoughts on these important matters. I really enjoyed having you on today. Now, before we let you go here, give our listeners a little more information about how they can learn about you and follow your work more regularly.

Ed Steer: Like you mentioned, I’ve been involved in this for almost two decades now. My name is Ed Steer, and if you just Google my name you’ll come up with my website EdSteerGoldAndSilver.com. And you can read a sample column on my homepage. If what I have to say interest you, then you’re free to sign up. The damages are $ 100 for 200+ columns per year.

Mike Gleason: Well, we’re big fans of what you guys are doing there at GATA and also the information that you put out there at the Gold and Silver Digest site. And we would love to follow up on these developing stories as they unfold, and I hope we can visit with you again down the road. Thanks very much, Ed, and enjoy your weekend.

Ed Steer: Thank you, Mike.

Mike Gleason: Thanks again to Ed Steer, director and board member at the Gold Anti-Trust Action Committee and also the purveyor of Ed Steer’s Gold and Silver Digest. Again, check out EdSteerGoldAndSilver.com for more information. He publishes a lot of great content there and covers the metals markets very closely. And we highly recommend everyone check that out.

I also want to urge folks to consider going to GATA.org and making a tax-deductible donation to ensure GATA has the resources to continue its important work of exposing the manipulation that continues to go on in the gold and silver markets.

Well, that will do it for this week’s Market Wrap Podcast. Be sure to check back throughout the year as we look to bring you more great content and exclusive interviews. Until then, this has been Mike Gleason with Money Metals Exchange. Thanks for listening, and have a great weekend, everybody.

Precious Metals News & Analysis – Gold News, Silver News

The United States Is Melting Down Under Extreme Corruption

I have fond affection for my sense of right and wrong – morally, spiritually and legally.  But it’s becoming increasingly difficult to behave responsibly as a citizen given the thorough corruption which has engulfed nearly the entire population of elected officials and business leaders.  Fraud, corruption, grand-scale theft and remarkable dishonesty is endemic to Wall Street, DC and across corporate America.

Every single elected official at the Federal level, and at most State levels, is a paid servant of  big banks, corporations and wealthy families/individuals.  Obtaining a House or Senate seat is worth $ 10’s of millions.  Getting into the Oval Office is worth $ 100’s of millions.  For those you who still harbor disillusions of Obama’s integrity, recall that he campaigned aggressively on a platform in 2008 that promoted “cleaning up Wall Street” as a high priority.  Not only did he not clean anything up, he enabled the same fraudulent business activities that sunk the financial system in 2008 to become even more grand in scale and stealth.  Now he’s greedily pocketing $ 1 million speaking engagement with the banks he bailed out in 2008 with $ 800 billion in taxpayer funds.

Anyone who believes their vote matters has their head buried in sand.  Even though he must believe his vote still matters, James Kunstler has written must-read commentary on the current plight of the U.S. political system:

What America might want to know right now is: how come Hillary Clinton doesn’t have any legal problems? Why aren’t DOJ investigators examining the financial records of the Clinton Foundation? You would think somebody would want to find out how over $ 120 million of Russian “charitable donations” ended up on its ledgers around the time that Secretary of State HRC approved the Uranium One deal — compared to which, Bill Clinton’s $ 500,000 payment from a Russian bank for giving a speech around the same time just looks like walking-around money…

…Watergate begins to look as quaint and simple as a game of Chutes and Ladders compared to RussiaGate. Not only are both parties implicated one way or another in multiple nefarious schemes, plots, and intrigues, but the Department of Justice and its subsidiary, the FBI, look culpable in a range of cover-ups and mis-directions. If the DOJ becomes disabled, how does any of this get resolved?

The whole extravaganza is heading toward a constitutional crisis that might clean out the system like a Death Wish coffee enema. Sentiment may arise for Mr. Mueller to step aside, if President Trump doesn’t make the rash decision to simply fire him. The latter would certainly foment a constitutional crisis that could include an effort to run Trump over with the 25th amendment. In the event, we’ll be in a new kind of civil war.

Click here to read the rest: SWAMP-O-RAMA

By the way, this is in no way a defense of Trump.  I have not voted since 1992 (I wrote in “Ron Paul” on my ballot) – I back my views with action, or non-action as it were.  Trump is in the business of casinos and real estate – specifically NYC-area real estate.  Both of those endeavors are tightly connected to criminal activities on every level.  If you are wondering why Trump rolled over so quickly to the command of the Swamp/Deep State, just imagine the thick folder of bribe material they have on him…

Investment Research Dynamics

China’s Gold/Oil Play; Greg Weldon: Debt-Driven Consumer Economy Breaking Down

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up we’ll hear from Greg Weldon of Weldon Financial and WeldonLive. Greg’s research calls for the markets to roll over, and he’s expecting some very rough waters ahead based on key metrics he’s focused on – consumer spending and debt. He also weighs in on the tricky spot the Fed is in and where this is all pointing for both stocks and for gold. Don’t miss a wonderful interview with Greg Weldon, coming up after this week’s market update.

Precious metals markets pulled back earlier this week before regaining some footing on Thursday. As of this Friday recording, gold comes in at $ 1,283 an ounce and is posting a loss for the week of 1.7%. The silver market ticker shows a weekly decline of 1.9% to bring spot prices to $ 17.14 per ounce.

The red metal copper hit a three-year high this week. Not much price action of significance in oil and other commodities. However, there have been some interesting developments of late in the way crude oil futures get traded internationally.

China recently took aim at the U.S. petrodollar by announcing a system for buying imported Arab oil using Chinese yuan which are also now convertible into gold. This enables China and its trading partners to bypass the dollar using a common monetary standard.

The rise of a “petroyuan” could become the biggest threat to the U.S. dollar’s status as world reserve currency. China’s appetite for imported oil is enormous and growing. So it makes sense for the country to seek direct trade deals with Saudi Arabia, Russia, and other suppliers.

For its part, Russia is all too willing to deal in gold. Russian officials view the monetary metal as integral in combating international economic sanctions and supporting the ruble.

Even though the United States is no longer on a gold standard, it still holds one of the world’s largest gold stockpiles. Treasury Secretary Steven Mnuchin did a spot-check on Fort Knox for PR purposes and claims that America’s gold is safe. With no true audit of Fort Knox in more than 60 years, many doubts remain about who actually holds title to all the gold bars and whether some may be counterfeit, leased out, or just plain missing.

If citizens were allowed to redeem their dollars for gold or silver coins on demand, then nobody would have to take the government’s promises on faith. Of course, there was a time when U.S. currency explicitly stated it was redeemable in precious metal.

It’s a history most people today know little about. Those who were around as recently as 1963 may remember when paper dollars were also silver certificates – redeeemable in silver coins.

Most politicians, bankers, and business titans today quite prefer digital dollars redeemable in nothing. They would prefer the public to not be tangibly connected to its history. There is a war on cash, a war on gold, and a war on history being waged in this country. They all go hand in hand.

This month saw a war on Columbus Day waged. Historical statues and monuments were vandalized, and New York City mayor Bill DeBlasio threatened to tear down the city’s Columbus statue. Other cities moved to abolish Columbus Day and replace it with the newly made up “Indigenous People’s Day.”

Another major battle in the war on history will be decided next month in Virginia. The Democrat candidate in the upcoming gubernatorial election vows to tear down all Confederate statues in the state. His Republican opponent is making the election a referendum on keeping history up. He recently released this 30 second TV commercial:

Announcer: Ralph Northam wants to take down Virginia’s Civil War statues.

Ralph Northam: I would do everything that I can to remove the statues at the state level. Remove the statues at the state level.

Announcer: Ralph Northam would take our statues down. Ed Gillespie will keep them up.

Ed Gillespie: I want to keep our statues up. Our history is our history, and we need to teach it, not erase it. They should stay up. I’m Ed Gillespie, candidate for governor, and I sponsored this ad.

If historical landmarks that reflect values different from the ones prevailing today aren’t allowed to exist, the past can’t speak to us directly anymore. Every generation will want to apply some new politically correct filter for determining whose history can stand. Some historical figures will be demonized for their words and actions. Others will be dismissed as no longer relevant, their ideas obsolete for modern times.

Similar attacks were launched on gold and silver to shift America’s monetary system from sound to fiat. Gold is outmoded. It’s been rendered useless in the modern economy. It’s just a “barbarous relic” and so on.

This is what central bankers and their ideological allies want us to believe. But if gold were truly obsolete as a monetary asset, then central banks would sell all their gold reserves. They certainly wouldn’t be buying it. Not in 2017 when the global economy can run on digital currencies and crypto-currencies.

But central banks are still holding and accumulating gold. And for good reason. Gold’s history as money spans far longer than the timeline of any fiat currency. Gold’s history gives people confidence in its future as a store of value.

Yes, history still matters, even in the current year.

Well now, without further delay, let’s get right to this week’s exclusive interview.

Greg Weldon

Mike Gleason: It is my privilege now to welcome in Greg Weldon, CEO and President of Weldon Financial. Greg has over three decades of market research and trading experience, specializing in metals and commodity markets and even authored a book in 2006 titled Gold Trading Bootcamp, where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $ 550 an ounce.

He is a highly sought-after presenter at financial conferences throughout the country, and is a regular guest on financial shows throughout the world, and it’s good to have him back here on the Money Metals Podcast.

Greg, thanks for joining us today. And it’s nice to talk to you again. How are you?

Greg Weldon: I’m great, thanks. My pleasure, Micheal.

Mike Gleason: Well, when we had you on back in mid-August you were optimistic about gold at the time. We had a pretty good move higher, shortly thereafter that ended up with gold hitting a one year high. But it stalled out around $ 1,350 in early September and we’re currently back below $ 1,300 as we’re talking here on Wednesday afternoon. Gold hit resistance at about the same level in the summer of last year, so give us your update as to your current outlook. What drivers, if any, do you see that can push gold through that $ 1,350 resistance level in the months ahead, Greg?

Greg Weldon: Yeah, well, exactly as you said. You had the move that we were anticipating when we last spoke and it kind of had already started from the 1205-ish level. All of this fitting into the kind of bigger picture, technical structure that still leads to a bullish resolution. But as you accurately mentioned, you got up to what have been close to, not quite even towards last summer’s highs around $ 1,375, $ 1,377. In this case, around $ 1,360 and ran out of steam.

The dollar kind of changed some of the picture and the thought process linked to the Fed changed some of the picture. So, you embarked on a downside correction. $ 1,260 was the low, you have a nice little correction from that level. That was the level that equated to 200-day exponential moving average. It’s a level that was just below the 38% Fibonnaci retracement of the move up from $ 1,205. Actually, the move up from $ 1,123 back at the end of 2016. So you had real, critical support there. So, to me, everything’s kind of mapped out the way you might expect it to, structurally, in this market.

From here, one of two things happens, I think. Well, one of three things, anyway. You could be cut if you have a bit of low rally backed up to $ 1,300. You back below it a little bit to dollars; still looks kind of strong. It’s an interest rate differential dynamic as a more hawkish view for the Fed is priced into the Fed funds; that gets transferred into the two-year and five-year treasury notes. The two-year treasury notes at a record high-yield relative to the German two-year schatzi. So, that lifting the dollar … it’s kind of gravitational pull to the upside. And that is some of the downside risk here; that the rally we just saw is kind of you b-wave and maybe you have a c-wave down towards $ 1,240. That’s kind of an ultimate low. Whether or not it plays out that way, longer term we still like it.

Mike Gleason: Precious metals have had a pretty respectable year all in all. Gold is up about 11% year to date. Silver is up about half as much. There isn’t exactly a lot of excitement. It seems like it’s always two steps forward, one step back. Sentiment in the physical bullion markets, where we operate, is muted. There are multiple factors to consider as to why metals markets are stuck in a bit of a rut. It seems to us that one of the big ones is the equities market stock prices just keep marching relentlessly higher. Either investors have become totally desensitized to risk or maybe there just isn’t as much risk as well think there is. In any event, barring some sort of spike in inflation expectations, which pushes metals and stocks both higher, we don’t see gold and silver breaking out unless investors start getting nervous about stock market valuations and thinking about safe havens. So what are your thoughts about equity markets and how they relate to precious metals, Greg? And where do you see stock prices headed in the near term?

Greg Weldon: Yeah, I mean it’s a perfect question because the reality is, and we in our daily research we focused on this, in fact yesterday. We haven’t spoken … It sounds like we arranged this question. Focusing on the fact that gold, relative to S&P, is at a low. You really are kind of lows that we’ve seen before, but at a level where if you get much lower, you’re breaking down to multi-year lows and this whole thing gets called into question from a technical perspective. But my problem with looking at it from a technical perspective, is that I think the stock market is living in borrowed times. Basically, the Fed has done exactly what they wanted to do. They have flushed people out of safe havens and into risk assets. That’s the whole idea of QE. It worked. You reflated the stock market. That has facilitated a huge, unprecedented rise in consumer credit.

Instead of the housing market being the collateral like it was in 2006 and 2007, now it’s the stock market that’s the collateral, the Googles and Amazons of the world and the Facebooks of the world. And you have this demand that is being driven or really being fed by credit. Now you see the credit numbers start to slow. They’re unsustainable. You start to see the consumer roll over a little bit. So that’s the number one risk to the stock market; it’s actually the consumer.

If you look at the retail sales numbers, outside of automobiles and gasoline, which is price-based, you don’t have much of anything. And you have eating and drinking growth slowing. That’s a key component, a key layer to the discretionary spending that’s an important tell to the bigger picture. The consumer discretionary sector is breaking down against the S&P. So that’s a warning sign to me.

You have, in terms of the dynamics around what the expectation is for GDP growth, predicated upon policies that have not yet been even agreed upon, let alone voted upon, let alone implemented, let alone starting to work. So, I worry about that kind of fracture between the expectations, the patience level of stock investors, diminished returns, diminished volumes. I think there’s a stock market risk. That’s one of the reasons we like gold, because what would go hand in hand with that, was some kind of maybe statement or a pull back on the dot plot from the Fed that would then cause the dollar to come off its little rally here.

Mike Gleason: Let’s play the devil’s advocate maybe a little here. We look at these record stock prices and wonder about what is beyond this extraordinarily high valuations in the past when PE ratios hit these levels, it was a signal that markets were nearing a top. But there’s one big difference between the past and today: the advent of high frequency and machine-driven trading. Huge amounts of daily volume is generated by trading algorithms. That is a game changer. These programs don’t sense risk on an emotional level like human traders do. They respond very differently to geopolitical events. So, if today’s markets seem disconnected from reality, perhaps because it’s because they are.

Now you have been on the front lines, trading in these markets for decades. You were a witness for how markets have transformed in recent years. What is your take on high frequency and algorithmic trading and what does it say about the possibility that current equity market valuations can be sustained or maybe even pushed higher? What are your thoughts there, Greg?

Greg Weldon: That’s phenomenal question and it’s very well timed given that we did a big special in September called “Shrinkage,” which is a shift in the Fed policy here. But if you take now your question, which is pertinent now, and you look at experience, in my experience over decades, it brings back 1987 right off the bat. We’re not saying the market’s going to crash. There clearly there are a lot of differences. But when you ask about high frequency trading, it sounds to me, the first thing I think of, is portfolio insurance on steroids, times a thousand, times ten thousand. So, the risk in terms of just what is the catalyst that then causes kind of that cascading downside?

One of the things we’ve been pointing out to our customers… and by the way, I’m working out a gigantic special that shows just how intriguing some of the similarities are around movements in the dollar, movements in bonds, movements in gold, and movements in stocks, and some of the ratios, and even down to crude oil, Fed policy and CPI. Now as there was basically from 1985 to ’87, once they kicked in the Plaza Accord, which depreciated the dollar. A lot of intriguing connections there and the special report that I’m writing on this, it’s called “What, Me Worry?” which we’d love to make available to any of your listeners, first of all, if they want to email me.

But in terms of the catalyst, setting it up, again I think the landmines are laying in wait out there. I think if you take an example, one of the things, like I said we’ve been telling our customers, if you take Amazon or Google. Stock are trading at $ 1,000 a share. You need $ 1,000 to buy one share. So, the volume of trading has diminished dramatically over the last couple of years as the stock prices has gone up. The ownership is huge. And it’s passive, and it’s managed investments, it doesn’t matter, it doesn’t discriminate in terms of what type of investor. The people who want to own these stocks, own them. The dynamic between the price level being so high, nominally speaking, to buy up block shares, the amount of money needed, pure and simple, against the volume, to me, sets up something like you’re talking about that would be exacerbated by a flash crash. So, it becomes very scary in terms of what kind of meltdown could you see if you get the ball rolling to the downside.

I still think that this is something that will play out over some time. I think the Fed is there. I don’t think this is … There are a lot of differences. I’m not trying to make a direct ’87 comparison. But I’ll tell you what, the risk is there. No doubt about it. The risk is rising.

Mike Gleason: In terms of the Fed here, Greg, what is your thinking on who it might be that talks over for Janet Yellen as the next Fed chair and then also, tell us what you think they’re going to do here in terms of getting inflation to where they want? Basically, what are your general thoughts on the Fed and Fed monetary policy? Clearly everyone’s favorite subject.

Greg Weldon: Really, it’s two totally separate questions right now because who is Donald Trump going to pick versus how inflation going to play out. I think if you look at what the Fed is saying, the Fed has been very clear. This is where (Jerome) Powell becomes, what seems to be, and I’m not saying I believe this, I’m just saying it seems that Powell’s a logical choice if, IF, your goal is to maintain policy. Thinking about bringing in a guy like (John) Taylor, and the Taylor rule and where the natural level of Fed funds should be here, he would obviously be a much more hawkish choice. While him and Trump might have really gotten along, and maybe there’s a lot Trump can learn from him, I don’t think that’s the guy Trump wants in terms of policy for trying to get his growth agenda going.

In that context, how you maintain continuity, which really isn’t that bad. They’re certainly not tight and they’re not tightening to any nth degree. It’s almost Goldilocks material here, inflation aside. Powell is a logical choice because you make a headline splash, which of course he loves. You basically make a change, but you kind of keep the status quo.

The other one would be (Kevin) Warsh. He was more away from QE and towards just using interest rates. He’s an interesting kind of dark horse. Yellen is certainly a dark horse. What mattes really is how does the Fed decide they’re going to deal with this inflation issue when they can’t even decide what’s causing it? Because you keep hearing transitory, idiosyncratic. These are the words that being used repeatedly, over and over and over again to describe, and you’ve had one Fed official go so far as, and even Yellen herself has made comments to the effect of, “We don’t understand why it’s not materializing.”

Again, kind of back to the Taylor model, the basic rule of thumb that the Fed is counting on, i.e. hoping for, is that as the labor market continues to tighten wages, inflation will go up and that will support of a general rise in prices. The question now becomes is the natural rate of unemployment lower than we thought it was. Or, are there structural differences now, technologically based dynamics in the labor market that has hollowed out the labor market, the reason you still have participation rate while finally up a little, is still so low historically, therein lies the question. What is it kind of keeping inflation back and how does this play out?

I think the employment numbers from this month, for September, were huge in the sense it was the biggest wage number … and you know how I break the number down. To the nth degree, this was the real deal. Only one month, but still the real deal, and the best wage number we’ve seen since 2007. So, will that continue? We know anecdotal evidence is there. Will this continue over the next couple of months?

If you look at CPI and PPI, the pipeline, the year-over-year dynamics around some of the commodities, God forbid, grains, oil seeds, and tropical commodities started to rally because then you’d have a real problem. Look at what the base models are doing. Look at what energy potentially you’re going to break out here. So, I think there is some inflation coming and it’s apt to push the Fed to have to raise to meet their dot plots, and I think that’s going to be problematic for the equity markets. They’re walking the high wire act with no safety net. It’s a very difficult job.

Mike Gleason: Getting back to metals here for a bit. We would like to give our listeners an update on the silver and gold price rigging scandal that erupted a year and a half ago when Deutsche Bank was forced to acknowledge cheating and turned over mountains of evidence, which may prove damning for a number of other banks. But the courts and regulators have a record of moving slowly, if they do anything at all. Now you’re much closer to the futures markets than we are. Are you aware of any developments on that front and what do you see as the implications of the civil action against the bullion banks? Do you sense that the Deutsche Bank revelations here led to more honest markets, perhaps because of all that evidence struck fear into banker’s hearts or is it more business as usual for these bullion banks who seem to have so much influence in these markets, Greg?

Greg Weldon: I have the sense it’s business as usual. I get the sense that it’s a kind of laissez faire attitude about that because the problem is so big, if we were to actually kind of get unearthed, the impact would be much, much larger and we would know it based on the price section very quickly. It’s a powder keg. It’ll blow at some point. This is something, gosh I’ve been in the business how long, and we’ve been talking about this how long? Really, this goes way, way back. The degree to which it has gotten worse is, I mean, the thing you debate, not whether it exists or not. Is it going to be somehow uncovered to the extent that it causes that kind of disruption? I think again, this is probably fodder for a great movie… a spy movie or whatever.

Sure, there’s probably a lot of that kind of thing going on in background, but in terms of the day to day operation of the trading of these metals, I don’t see any tangible impact in the dealings I have here, no.

Mike Gleason: Well Greg, as we begin to close, give us a sense of what you’re focusing on here, maybe some of the things that we haven’t touched on and then give us a sense of how you’re evaluating these markets for your clients. Do you think it’s time to get defensive, go to cash, favor metals and commodities here as an inflation hedge, or does the wave of exuberance in stocks still have a ways to go? Any final comments or anything else that you want to leave us with today?

Greg Weldon: Well, I think some of that depends on whether they can actually get some kind of job done in Washington where the Republicans finally realize their own necks are on the chopping block here, so let’s finally ban together and get a tax reform package done. We’ll see whether that happens. I think that might be one of those last gas type of moves for the stock market. It could be a “buy the rumor sell the fact,” but I think lot has been priced in and I think there’s still going to be disappointment down the road for that.

I’m watching the consumer specifically. The retail sales numbers have been really poor all year. It’s minuscule gains in discretionary items since January. And the debt numbers are interesting. You’re starting to see a roll over, starting to see rise in delinquency rates. The debt obligations for consumers and for the Federal government, by the way, are high despite the fact that rates are still low. Can you imagine if the Feds actually did push rates a hundred basis points higher over the next however many, 14, 15 months? I think that would have a real reverberating effect on the consumer and on the government where deficits are still increasing and they’re at high levels again. No one talks about it. You have $ 20 trillion dollars in sovereign debt and you’re about to push the five-year note above 2%, which is your trigger to increase cost on funding the debt. Man, the land mines are out there.

I’m watching all of it. That’s what we do for our clients every single day because never before, have you had to be more plugged in. Look at the way things happen so much more quickly now. You asked about what’s the difference from 30 years. So much more availability of news, quickly. But the fact of the matter is, the basic thing that we do hasn’t changed at all, which is dissecting all of it, connecting all the dots, and kind of trying to make it all make sense in terms of what the markets are doing and how you might profit from that.

Mike Gleason: Well Greg, thank you so much for joining us again. We enjoyed it very much and love getting your very studied and experienced outlook on the state of today’s financial world. Now before we let you go, please tell folks about Weldon Financial, how they can find you, and any other information they should know about you and your firm.

Greg Weldon: Sure, thanks, appreciate that. We’re found at WeldonOnline.com. We do Weldon Live, one product, one price. It’s kind of a multi-layered product, although it’s just again, one price. We do daily and we cover daily global macro, fixed income, foreign exchange, stock indexes and ETFs, precious and industrial metals, energy, and agricultural commodities. And we tie them all together and we have what we call our Trade Lab, which is part of Weldon Live. These as specific trading recommendations in all of those sectors, we’re old school futures guys, so that’s kind of the way we approach it. What we find is a lot of family offices or independent brokers or even individuals out there, and there’s no reason with the way your see ETFs now being utilized that the average investor can’t operate more like a hedge fund manager or CTA.

We try and provide rhyme and reason to what’s going on and then specific strategies to take advantage of it. Weldon Live found at WeldonOnline.com.

Mike Gleason: Well great stuff. Thanks so much for your time today, Greg. I hope we can talk again down the road. Take care and we appreciate you coming on.

Greg Weldon: Thanks. No problem, Mike. Any time.

Mike Gleason: Well, that will do it for this week. Thanks again to Greg Weldon of Weldon Financial and WeldonLive. For more information, simply go to WeldonOnline.com and we urge everyone to sign up for a free trial there. Again, you can find all of that information at WeldonOnline.com. Be sure to check that out.

And check back here next Friday for our next weekly Market Wrap Podcast. Until then, this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.

Precious Metals News & Analysis – Gold News, Silver News

Stock Market May Have Peaked in Terms of Gold; Gerald Celente: Interest Rates Go Up, This Goes Down”

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up the one and only Gerald Celente of the Trends Journal and one of the top trends forecaster in the world joins me for an explosive interview on the dollar, the growing tensions with North Korea and a wildcard that he sees driving a big run in gold. You will not want to miss an incredible interview with Gerald Celente, coming up after this week’s market update.

Well, the invincible U.S. stock market finally came under some selling pressure this week as tensions between the United States and North Korea flared up. Bombastic threats from Kim Jong-un to strike the U.S. military outpost of Guam were met with elevated rhetoric from President Donald Trump and Defense Secretary James Mattis. They warned the North Korean regime that it would be wiped out if it initiated an attack or continued making threats.

As concerned investors sold equities on Thursday, precious metals markets received some significant safe-haven inflows. Gold is up 2.0% this week to bring spot prices to $ 1,286 an ounce as of this Friday morning recording and pushing toward its high for the year at just under $ 1,300. Silver shows a weekly gain of 4.8% and now trades at $ 17.09 per ounce. That’s a 7-week high.

The platinum group metals are also on the move, with platinum up 2.0% to $ 990 an ounce and palladium up 2.2% to $ 899.

Yesterday’s big outperformance in metals has gold bulls eyeing a possible trend change in the Dow to gold ratio. Since mid 2011, blue chip stocks have been trending higher relative to the yellow metal. The Dow-gold ratio has risen from just under 6 to 1 to a high of just under 18 to 1 last month.

That’s still far below the secular high in the ratio from 2000. But it’s also far above the secular low of 1 to 1 seen in 1980. So, there is plenty of room for a major move in the ratio to commence.

Looking at the Dow and the gold market individually, both seem ripe for major moves. In the case of the Dow, the most remarkable feature of this summer’s rally to record highs was vanishing volatility. Day after day prices would inch up in narrow trading ranges.

Extreme lows on the VIX volatility index are unsustainable for very long. And volatility finally came back with a vengeance on Thursday with the Dow dropping 200 points.

In the case of gold, volatility has also been muted in recent months. Even the gold mining stocks, which are notorious for their wild swings, settled into a narrow sideways trading range. But the precious metals sector now appears poised to break out of its summer doldrums to the upside.

It’s too early to call a definitive breakout until gold prices actually close strongly above the $ 1,300 resistance level. If and when that happens, bulls would be back in the driver’s seat.

And it could be just the beginning of a major trend change in the Dow to gold ratio that lasts for years – with gold outperforming the Dow. That’s why it’s definitely not too late for investors to move some wealth out of the seemingly expensive stock market and into physical precious metals.

As we’ve seen this week, it’s not just gold that stands to benefit when equities go out of favor. The more thinly traded white metals of silver, platinum, and palladium can gain even more dramatically when investors seek hard assets.

Successful investors have to think about which trends are exhausted and which ones may just be getting started. Successful investors don’t try to catch exact tops and bottoms, but they do rotate out of old positions and into new ones as opportunities present. They also diversify their holdings to avoid being too heavily concentrated in any one asset.

Successful precious metals investors don’t just own one metal in one size. They accumulate multiple bullion products in multiple sizes. You never know when you might find it useful or necessary to sell, trade, or gift a tenth ounce of gold instead of a full ounce, for example.

Money Metals Exchange offers fractional size gold, fractional size silver, and even fractional size platinum and palladium products in addition to plenty of options in the standard one-ounce size. We also offer hefty 10-ounce gold bars and 100-ounce silver bars for serious stackers. And any orders of $ 1,000 or more include free shipping and insurance.

Well now, without further delay, let’s get right to this week’s exclusive interview.

Gerald Celente

Mike Gleason:It is my privilege now to welcome in Gerald Celente, publisher of the renowned Trends Journal. Mr Celente is a well-known trends forecaster and highly sought-after guest on news programs throughout the world and has been forecasting some of the biggest and most important trends before they happen for more than 30 years now. It’s always great to have him on with us.

Mr. Celente, thanks so much for the time today, and we appreciate you joining us.

Gerald Celente: Thanks for having me on, Mr. Gleason.

Mike Gleason: Well, I want to start out talking about the first half of the year of Donald Trump’s presidency. Trump had an ambitious agenda to get the economy going but hasn’t been able to push any significant legislation through this Congress. How do you see that playing out from here, and what bearing does all this have on the dollar, Gerald, because the greenback has been taking it on the chin here recently?

Gerald Celente: Well, you point out something very significant. Go back to when Trump got elected, and going into the beginning of the year, so from November to the beginning of 2017, the dollar was soaring, and it all of a sudden started reversing. I’ve been around a long time, and I’ve never seen anything like this in my life with so much hatred is being sent out by the media, not only against Trump, but the Russians, and any other person or country that they don’t like. Of course, I’m no Trump supporter, I’m a political atheist, I didn’t vote for either of Trump or Clinton in the last election. And I’m not one of these people that say, “Oh, you have to go out and vote. If you don’t vote then you deserve what you get.” No, if you vote, you deserve what you get, because I don’t support the Bloods and the Crips, and that’s what the Democrats and Republicans are to me. They’re murderers and thieves, their track records prove it. So what I’m saying about Trump has nothing to do with me being a Trump supporter.

The hatred that the media has been selling, with hating the Russians, no evidence at all that they hacked into the Democratic National Committee, it’s our assumption, it’s our belief, it’s our analysis. Can you imagine going to a court, Mike, and saying that to a judge? (The judge might say) “Show me some evidence.” “How dare you ask me to show you evidence, judge? Don’t you know who I am? I’m a presstitute for the Cartoon News Network, I’m a presstitute for the New York Times, the toilet paper of record. I’m a presstitute for MSNBC. I’ll shove any crap I want down your throat and you repeat it to the American people. I don’t need proof, all need are assumptions, and you know how good those are. You might remember that Saddam Hussein had weapons of mass destruction and ties to Al-Qaeda.” So what I’m saying is they sell lies, and they sell hatred and dissent in the United States like I’ve never seen before in my life. Every time somebody got elected that you didn’t like, the media would say, “Well you may not have supported that person, but now it’s the president of our United States and we have to all work together. “

So now going back to the dollar. The war against Trump is actually the war against the economy in many ways, because when the Trump rally began, and anybody could go back to the facts, when Trump looked like he was going to win on November 8th, in the morning of November 9th, the Dow futures dove by over 800 points, thinking that he was going to win because the markets wanted Hillary. And then it reversed. And it reversed on the belief that his programs, again whether you like them or not, not the issue, only talking about business, were good for business because of tax reform, because of deregulation – again, whether or not you agree with it isn’t the issue, we’re talking about business – and with also the rebuilding of the infrastructure. None of that happened. That boosted of the dollar, now we’re going into reverse. And, also, the rhetoric keeps heating up. Not only against Russia, but across the globe.

Mike Gleason: It has been almost a decade now since the 2008 financial crisis. We’ve seen evidence since that time that some Wall Street banks have acted like criminal enterprises, and they continue to enjoy the support of politicians in Washington DC. No one has been more vocal on that subject than you. Now we have Donald Trump promising to “drain the swamp,” but more evidence of cheating and market rigging have been piling up. You could be forgiven for thinking that a reckoning will soon come, but experience has shown, these characters are basically untouchable. What are your thoughts, Gerald, any of these folks going to go to jail any time soon?

Gerald Celente: Well, they’re too big to jail, you remember that little freak, Eric Holder. Yeah, you remember him, he was brought in by Obama, the most transparent president he says in his campaigning for the presidency back in 2008. Yeah, so transparent that you could see right through him. He was a guy that promised to bring the banksters to jail. And Eric Holder, where does he go, he goes back to work for one of the white-shoe boy’s firms over there on Wall Street, and wants to protect the banksters, and he says they were basically too big to jail.

We saw, what, $ 150 billion worth of fines, and not one head roll? It’s a neo-feudal society, there are different rules for the political nobility and the economic elite. As you point out, yeah, Trump didn’t drain the swamp, he just brought in new swamp creatures. Whether it’s Mnuchin or all the generals that he brought in. I’ve never seen a White House filled with so much military brass and a bunch of Wall Street billionaires. So when we’re looking at it, no, I don’t see any of that change coming.

But again, going back to the dollar and the strength of it, there may be some positives coming out of it. Wilbur Ross who’s the Commerce Secretary, this isn’t a guy I’d want to do business with, but if this is the guy that’s going to defend my interest on the business field, and he’s going to renegotiate these lousy trade deals, that’s great for America. So, there’s a give and a take on it, but right now it’s only been a one-way street and that is when you look at the polls, that Trump is down at historic lows, and look at Congress, what, only 10% of the people look up to Congress? And yet people argue that their bunch of crooks is better than your bunch of crooks? So I don’t understand what’s going on, how people could take orders from these jerks that play politicians.

Mike Gleason: Speaking of the 2008 financial crisis, it looks to us like history is likely to repeat, perhaps sooner rather than later. You can make a good argument that a number of markets are now in bubble territory, including stocks and bonds. There is also plenty of irresponsible lending –subprime autos, student loans, and hundreds of billions lent to oil companies which may go broke unless oil gets back up towards $ 80 per barrel. Markets are certainly due for a big correction. That said, if the VIX is any indication, traders have never been less worried. What do you think, can the wheel stay on this a while longer?

Gerald Celente: Yeah, they can. And that’s the one thing that I learned, and you really nailed it before when you were talking about the corruption. They’ll rig the system any way they want to make things happen. Look, I would’ve thought this thing would’ve collapsed in 2012. I never heard of negative interest rates. You know Mike, I like you, you’re a nice guy, I got a 10-year bond for you. Yeah, you buy, and then I’m going to give you negative yields after 10 years because I like you so much. I mean, who could get away with this kind of crap? The central banks, the bank of Japan. And it’s the same thing around the world. So people are dying to get anything that’s going to show them any kind of return. So that’s what’s keeping the markets, they’ll rig the game anywhere they can.

I got a better one for you. Hey, how about a thing called Quantitative Easing? Isn’t that nice? Negative rate interest policy, zero interest rate policy, we’ll do anything we can to keep the Ponzi scheme going and the banksters rich. One of our Trends Journal (contributors), Anthony Freda, a great illustrator, did a cover for us, and he had a Jesus Christ with a whip and he’s driving the banksters out of the temple, but now they have names in front of them, JP Morgan, Chase, Goldman Sachs, Merrill Lynch, on and on. Nothing’s really changed. And that’s all it is. I mean, look at the guy, the little boy they elected over there in France – a Rothschild kid, Macron. And it’s one after another.

So I mean, they’ll rig the game any way they can. Will there be a correction, we’re forecasting a 10% correction. And so are others. But again, we don’t see a crash, because they’re going to do what they can to prop this thing up. I talked about Japan, what do they have, the GDP is, what, 250, that’s a GDP ratio. I mean, look at China, 300. So they just keep the Ponzi schemes going. They’ll invent anything that they can.

Mike Gleason: We definitely want to get your thoughts on North Korea since the mounting tensions there have made big news this week. The prospect of a nuclear exchange is of course what people worry about. We’re well-accustomed to bluster and threats from Kim Jong-un and his predecessors, but now Donald Trump has threatened to use America’s nuclear arsenal. What is your best guess on how this will play out? Will Trump launch a preemptive attack using conventional weapons? Is this brinkmanship, just a negotiating tactic, what?

Gerald Celente: It’s not a negotiating tactic. I mean, I’ve been hearing this North Korea stuff all my life. Read the details of the sanctions that they just put on North Korea. What is it? The UN voted, because they’re testing missiles. You know what North Korea’s GDP is? It’s smaller than West Virginia’s. They have a population the size of Texas. You read the quotes coming out on what they’re doing and why they’re doing it, and it says, “North Korea warns US, rejects talks. The sanction’s resolution aims to cut a third, or $ 1 billion from North Korea annual foreign reserves. And I’m not good at math, but a third, or 1 billion, that’s $ 3 billion is their total foreign revenue. 3 lousy billion dollars. What is Bill Gates worth, 86 billion? Warren Buffet, 76 billion. Bezos, 73 billion. Zuckerberg, 56 billion. Look at the tough talk against the little nobodies. The reason why North Korea has nuclear weapons, and they made this very clear, is because they saw what the United States did to Saddam Hussein and Gaddafi. And they say, “You’re not going to do that to us.”

What countries has North Korea invaded? Look what they did to Libya, overthrowing Gaddafi. Hey, how about that war they launched against Afghanistan, because they had to find a man by the name of Osama bin Laden that was living over there. Oh, and look at that war in Iraq, yeah, they had to get rid of Saddam Hussein, those North Koreans, they can’t stay home. And now they’re in Somalia and Sudan, and they just sold $ 150 billion worth of weapons to Saudi Arabia to slaughter the innocent Yemenis, the poorest nation in the Middle East. Of course I’m talking about the United States.

North Korea and China have been asking the United States and South Korea, “Stop doing these massive military drills on our shores. Stop threatening us constantly.” What if we had North Korea up in Canada, China and Russia doing military drills down in the Gulf of Mexico, and Iran off the coast of New York? They’d be bombing the hell out of them from the United States, these people for getting too close to us. Yet the United States aggression against this country … Do they have a crazy guy running the show? Sure looks it, but hey welcome to America. Look at the freak show that we got going on and have been going on for a long time. So we have no right being there. Honor the Founding Fathers, no foreign entanglements. This is all rhetoric, we’re fighting a nobody that’s done nothing to us. They have not done anything to the United States. Oh, they may have a missile that could hit Topeka, Kansas by 2025. I got a gun, does that mean I’m going to shoot somebody? If there’s 50 cops outside, and somebody shoots in one of them, are the other 49 going to blow your brains out? What threat is North Korea to the United States?

Mike Gleason: With all this said, Gerald, what are your thoughts on gold? It has encountered some road bumps, but it is held in there pretty strong, actually, and never fell below $ 1,200. What trend is in store for the yellow metal in your view?

Gerald Celente: Well, it’s exactly what you said before. When you’re talking about what’s going on with a cheap dollar, that’s keeping gold up and also the instability. Gold is still the ultimate safe-haven asset. And other countries around the world are buying it because they understand that. We get the diluted message in the United States. You could talk all you want about, for example, or did you see earnings coming in, how great they are? Yeah, when you use the Gaap earnings principles, the generally accepted accounting principles, but when you look at the investment research company and they talk about the other measurements, the return on invested capital measurements instead of seeing over 10% growth over the last two years, you’re looking at like a minus 5% (decline). So these numbers are rigged too, when you look at them. The whole thing is being held up on hype and hope.

Then you look at where the gains are coming from, only a few industries. One of them being oil, because oil prices went up a little bit, so the energy sector is going up. But long-term, energy isn’t going to keep going up, it’s a supply and demand issue. And every time the oil prices go up a little bit over $ 50 a barrel, you got more supply coming online, and it keeps the prices in check. So, when you look at the technology, you look at energy, you look at the banking sector, it’s only a few sectors that are driving up the financials. And the cheap dollar is keeping the emerging market game alive as well, because they’re borrowing money for free. Then they borrow that money … If the dollar goes up, then you’re going to start seeing some real panic, and if interest rates really start going up, the game is over.

Again, this is a Ponzi scheme that’s been generated by Quantitative Easing, which means printing tons of cheap money and negative, or zero interest rate policy that allows stock buybacks and merger and acquisition activity. End of story. When interest rates go up, this thing goes down, and it goes down big. But the interest rates have to go up to a percentage much beyond where they are now, they’ve got to get back into the 3.25% range, as we see it, before you’re really going to start feeling the pressure. But even it at 1.5 to 2, you’re going to start seeing it really starting to hit.

Mike Gleason: Well, as we begin to close here, Gerald, any final thoughts or anything that you want to hit on that we haven’t discussed already?

Gerald Celente: I think we’ve hit on it all. The other wildcard to watch also, by the way, is the rhetoric against Iran. That keeps going on and on. Iran has not invaded a country for 250 years. Yeah, but they’re in Syria. Well, that’s because Assad invited them in, and whether you like him or not, he was elected, and an international forum said it was a fair and free election. But the hatred that the United States has against Iran … And again, people know nothing about the history of how the United States, the CIA and the MI6 in the UK overthrew the democratically elected government of Mosaddegh in Iran in 1953, because the guy had the nerve to nationalize the oil company, and that’s when they brought in the Shah. And the oil companies that were going to be hit by that were Anglo-Iranian Oil, better known as British Petroleum (BP) and Standard Oil better known today as Exxon-Mobil.

So we believe the one to really watch, the wildcard there, that could really be a destabilizing force, driving up oil prices, driving up gold prices and really causing major destabilization not throughout just the Middle East, but through much of the world, is if there’s a real war with Iran. And also, keep your eye on Ukraine. That’s very unstable, and that could explode yet again at any moment.

Mike Gleason: Well, Mr Celente, thanks as always for your time and your analysis today. We love having you on, because you really don’t pull any punches, and I know our audience really appreciates that. Now, before we let you go, as we always ask you to do, please let folks know about how they can get their hands on the wonderful information that you put out both online and with the Trends Journal magazine, as well as anything else that’s going on there at the Trends Research Institute that folks should know about.

Gerald Celente: Well, they can go to TrendsResearch.com or TrendsJournal.com. We not only publish the Trends Journal, which is a quarterly, 50-page magazine, no ads, full color and, also, we have a Trends in the News broadcast each weekday night, and we have a Trends Monthly, Trend Alerts, and there’s a money back guarantee. It’s the only place we are going to read and hear history before it happens.

Mike Gleason: Well, excellent stuff once again. I hope we can catch up with you later this year as these events begin to unfold, and ultimately, what it will likely mean for precious metals’ investors. Thanks again, Mr Celente for being so generous with your time. I hope you enjoy the rest of your summer and have a great weekend.

Gerald Celente: Thank you, and thank you for all you do, Mike.

Mike Gleason: Well that will do it for this week. Our sincere thanks to Gerald Celente, Publisher of the renowned Trends Journal. For more information, the website again is TrendsResearch.com. Be sure to check that out.

Check back next Friday for our next Weekly Market Wrap Podcast. Until then, this has been Mike Gleason with Money Metals Exchange. Thanks for listening and have a great weekend everybody.

Precious Metals News & Analysis – Gold News, Silver News

WORLD’S 2ND LARGEST SILVER MINE SHUT DOWN: Implications For Company & Market

World's 2nd Largest Silver Mine Shut Down

The world’s second largest primary silver mine, Tahoe Resources Escobal Mine, was forced to shut down operations in Guatemala by a ruling from the country’s Supreme Court. This was due to a provisional decision by the Guatemalan Supreme court in respect of a request by CALAS, an anti-mining group, for an order to temporarily suspend the license to operate the Escobal Mine until there is a full hearing. (picture courtesy of Tahoe Resources)

While this story has been out for a few days, I believe there is a great deal of misinformation on the Mainstream and Alternative media about the current situation and future outcome of Tahoe’s flagship Escobal Mine. Some analysis suggests that this is just a small speed-bump for Tahoe, so when they are able to address disputed regulatory issues, production and profits will shortly return once again.

However, there also seems to be a another side to the story that could cause more problems for Tahoe with a much longer suspension time than the company is publicly stating. For example, the following was published in the article… Tahoe Resources forced to halt Escobal mine in Guatemala:

While Tahoe is preparing for a three-month mine suspension, Haywood analysts project no production from the mine for the remainder of 2017.

Here we can see that the company (Tahoe) is very optimistic that production at Escobal will start back in three months, while Haywood analysts forecast operations won’t likely resume this year. So, who should we believe, or which forecast is more correct? Before we get into the details, let’s first look at the impact of suspending the 2nd largest primary silver mine in the world on the market.

A Shutdown Of The Escobal Mine, Ranked #2 In The World, Would Remove 21 Million Oz Of Supply

According to the 2017 World Silver Survey, Tahoe Resources Escobal Mine ranked #2, behind Fresnillo PLC’s Saucito Mine in primary silver production in 2016. Here are the top five producing primary silver mines in 2016 (Moz – million ounces):

  1. Saucito (Mexico) = 21.9 Moz
  2. Escobal (Guatemala) = 21.2 Moz
  3. Dukat (Russia) = 19.8 Moz
  4. Cannington (Australia) = 18.2 Moz
  5. Uchucchacua (Peru) = 16.2 Moz

Furthermore, the data in the 2017 World Silver Survey reports that a total of 265 million oz (Moz) of primary silver was produced last year. Thus, the Escobal Mine represents 8% of total global primary silver mine supply. If Haywood Analysts are correct that production at Escobal may not resume in 2017, than the mine is likely to lose nearly half of the 20-21 Moz forecasted for 2017.

While this is not a great deal of silver compared to total world silver supply of 886 Moz (in 2016), if the Escobal Mine is shut for a longer period of time, or indefinitely, it could impact the silver market over the next few years.

So, again… the big question for investors is, HOW LONG will the ESCOBAL MINE be shut down? Well, let’s look at some information and data that seems to be overlooked by the Mainstream and Alternative media.

What Is The True Nature & Future Impact Of The Suspension Of Tahoe’s Escobal Mine?

First… after the Guatemalan Supreme Court suspended operations at Escobal, Tahoe’s stock price took a real beating falling 33% that day. In the past week, Tahoe’s stock price decline 40%:

Tahoe Resources Chart

A lot of investors were caught by surprise as Tahoe Resources has been making a lot of money from its mines, especially from its Escobal Silver Mine in Guatemala. For example, in 2016 Tahoe Resources reported profits of $ 118 million on revenue of $ 784 million. That is a stunning 15% margin of profit… and the majority of that profit was from the Escobal Mine.

Second…. the rich profits from the Escobal Mine came at a cost. And the cost was in the way of “serious human rights violations through its operations”, stated by several sources. Unfortunately, many investors that follow the Mainstream financial media do not understand that the Escobal Mine has been, and continues to be, a subject of human rights abuse and violations from day one.

I wrote about this in my 2014 article, Top Silver Supply Figures & Forecasts Are Incorrect:

Escobal will become a big player with forecasted silver production in 2014 of 18-20 million oz. Unfortunately for Tahoe Resources, the locals are not too happy with their Escobal mine. There have been murders and killings on both sides of the protest.

This is by no means a small matter by a few disenfranchised locals:

Tens of Thousands Oppose Tahoe Resource’s Escobal Project in Guatemala

Tuesday, December 17, 2013

(Guatemala City/Ottawa) Contrary to Tahoe Resources’ recent claims, tens of thousands of people oppose its Escobal project in southeastern Guatemala. Repression and violence have been the outcome of company and government efforts to install the project without social support. A recent high-court decision in Guatemala reinforces the legitimacy and importance of local decision-making processes.

More than half of the communities in the municipality of San Rafael las Flores, where the Escobal project is located, have declared opposition to the mine. In five neighbouring municipalities, in the departments of Santa Rosa and Jalapa, a majority have voted against the mine in municipal referenda, in which tens of thousands of people participated. The most recent vote took place on November 10th in the municipality of Jalapa, department of Jalapa. Over 23,000 people participated with 98.3% voting against mining and 1.7% in favour.

This is a perfect example of what Jim Sinclair states “As the wrong way to go about starting up a mining project in a foreign country.” Jim believes you must have the support of the locals, or the project will be doomed for failure.

And it didn’t help Tahoe Resources PR one bit when their contracted head of security, Alberto Rotondo gave direct orders to assassinate members of the community of San Rafael Las Flores.

Tahoe Resources executive in Guatemala orders killing of protestors

“The preliminary investigations found that Rotondo gave the order to attack the community, he also ordered the crime scene to be cleaned up and change the police report.”

The information reveals Rotondo making several statements: “God dam dogs, they do not understand that the mine generates jobs”. “We must eliminate these animals’ pieces of shit”. “We can not allow people to establish resistance, another Puya no”. “Kill house sons of Bitches”

Rotondo was apprehended at the airport La Aurora, when he trying to flee the country. Wire tapping of conversations between him and his son reveal that he planned to leave Guatemala for a while, because “I ordered to kill some of these sons of Bitches.”

What seems to be missing from the current license suspension of the Escobal Mine is the extremely negative history it has had with the local community. As stated above, Tahoe’s former contracted head of Security, Alberto Rontondo gave the direct order to assassinate members of the San Rafael Las Flores community.

While the wire-tapped conversation between Alberto Rontondo and his son, where he says, “I ordered to kill some of these sons of Bitches”, was published in the media, it didn’t get much coverage in the Mainstream press. This was BAD NEWS for a large corporate mining company, so many news agencies seemed to just ignore it.

So… the assumption by many WESTERN investors that Tahoe Resources is only dealing with pesky legal regulatory issues, is a seriously inaccurate assessment that could cost them dearly going forward. Now, I am not saying that Tahoe’s Escobal Mine will not be able to return to operating status, but there are more serious issues that are coming to light that could be quite detrimental for the company going forward.

For example…. according to the website, Tahoe On Trial, they published the following:

The legal cases against Tahoe Resources are being carried out in a larger context of opposition to the Escobal mine. The violence, repression, and criminalization community leaders continue to face is not limited to what transpired on April 27, 2013.


  1. in 2011, Tahoe Resources hired a US security and defense contractor – International Security and Defense Management, LLC – that boasts experience with corporations working in war zones like Iraq and Afghanistan to develop a security plan that has treated peaceful protest and community leaders as if they were armed insurgents.
  2. In June 2012, Tahoe sued the Guatemalan government, stating that protests were hindering its operations and that the State was not doing enough to allow its activities to proceed.
  3. Between 2011 and 2013, some 90 people were slapped with unfounded criminal charges and made to endure legal processes causing them distress and hardship. Several spent months in jail before being cleared of all charges.

This is just the tip of the ESCOBAL MINE PROTEST ICEBERG… I could fill pages. However, those who believe the protests have gone away and now the public is totally supportive of the Escobal Mine, are completely being deluded.

If we fast forward to this year, the protests continue as reported in the article on June 23rd, 2017, Guatemala police clear access to Tahoe’s blocked Escobal mine:

…Police have used teargas to clear a public road near the town of Casillas, in south-east Guatemala, of protesters blocking access to Canadian miner Tahoe Resources’ controversial Escobal mine…

This proves that the public protests continue even as the Escobal Mine in in its fourth year of full commercial production.

I would imagine some readers-investors are probably thinking… “Well, this is just a matter for the local and federal governments to deal with in getting the LOCAL PEOPLE to BEHAVE, so they will leave the Escobal Mine alone to continue producing lots of silver and profits.” Well, that is one opinion, but if you think that is a WISE ONE… think again. Several large Funds have dropped Tahoe Resources from their portfolios due to what they term as, “A HIGH RISK .”

According to the Feb 2017 report titled, European Report Features Tahoe Resources as a ‘Harmful Investment’, Reveals Billion Dollar Funds Have Divested

Tahoe Resources is one of fourteen companies featured as a dangerous investment in the fifth edition of ‘Dirty Profits’ launched today in Hamburg, Germany and edited by the organization Facing Finance.

The publication identifies two billion-dollar European pension funds that have divested from the company, the Netherlands’ Pensioenfonds (PGB) and Norway’s Norges Bank Investment Management. The group calls for binding regulations on financial institutions and for the elimination of this and other harmful investments from their portfolios.

Problems cited include Tahoe Resources’ lack of respect for communities that have peacefully and democratically expressed their opposition to its Escobal mine in southeastern Guatemala, and a campaign of persecution through unfounded legal cases, violent incidents and militarization.

….The article about Tahoe Resources further describes how the company was granted a permit to put the mine into operation with disregard for over 200 individual complaints submitted against the license on the basis of environmental concerns. The officials responsible for this decision resigned in mid-2015 over serious allegations of corruption.

As we can see, the disinvestment of Tahoe Resources by two large European Funds should be a WARNING to investors that things may not be ROSEY for the company going forward.

Please understand, I am not only painting a negative picture for Tahoe, but rather providing additional information that seems to be missing from the Mainstream press. Thus, investors are making decisions without the COMPLETE information or story.

To be honest, as a silver analyst, I like the Escobal Mine’s performance. It is one of the most profitable primary silver mines in the world. However, I view this performance in a vacuum. By that, I mean based on the production and financial data alone. If we include the public and environmental issues, the Escobal Mine seems to be a very BAD DEAL for many of the local people that live adjacent to the mine.

I believe the suspension of Tahoe’s Escobal Mine by the Guatemalan Supreme Court may open a CAN OF WORMS that many individuals or companies invested in Tahoe do not realize or understand.

On the other hand, Tahoe might be able to work with the local people and Guatemalan government to resume operations. That being said, investors need to understand that the Escobal primary silver mine is a much HIGHER RISK than other silver mining companies. So, it would be wise to learn as much as one can before making a longer term investment in the company.

Precious Metals News & Analysis – Gold News, Silver News

The Left Refuses To Tone Down Their Inflammatory Language, And As A Result We Now Have War In The Streets

What in the world did the left think would happen?  When Kathy Griffin posed for a photo with “Trump’s bloody head”, that sent a message.  And the twisted version of “Julius Caesar” that is currently being put on by a New York theater group in which a character meant to closely resemble Donald Trump is brutally assassinated sends a message.  At any time of the day, you can find leftist radicals openly discussing violence against Trump and Republicans on Facebook and Twitter, and groups like Antifa have been employing extremely violent tactics ever since the Inauguration.  So it is not much of a surprise that a huge Bernie Sanders supporter decided that it would be a good idea to try to mow down Republican members of Congress as they were practicing for an upcoming charity baseball game on Wednesday.  66-year-old James T. Hodgkinson was simply the product of a political movement that is absolutely seething with hate.

This is not a game.  House Majority Whip Steve Scalise was shot in the hip, and four others were injured.  You can see some footage of Scalise being taken to an ambulance here.  When Hodgkinson arrived at the practice field, he specifically asked which party was using the practice field at that moment…

Rep. Ron DeSantis (R-Fla.) recounted an “odd” encounter he had as he was leaving the field just minutes before the shooting: “There was a guy that walked up to us that was asking whether it was Republicans or Democrats out there, and it was just a little odd,” DeSantis told Fox News.

According to news reports, Hodgkinson fired dozens of shots.  This wasn’t a case of targeting a particular individual.  Rather, it was obvious that he intended to kill as many Republicans as he possibly could.

But instead of showing remorse, many on the radical left were actually celebrating the shootings on Twitter.  And there were even some that were disappointed that it wasn’t Trump that had been shot.

I hate to say this, but it is likely that this is just the beginning of the violence by the radical left.

So what would make a 66-year-old man suddenly snap like this?

His Facebook page has now been taken down, but when it was up Hodgkinson had an enormous photo of Bernie Sanders as his banner image.  And it turns out that he was a huge fan of Rachel Maddow

So, where did Hodgkinson draw inspiration for his “progressive” political beliefs?  Well, according to a letter to the editor published in the “Belleville News-Democrat” in July 2012, Hodgkinson’s favorite TV show was MSNBC’s “Rachel Maddow Show.”

What you consistently feed your mind determines what you eventually become, and this case is a perfect example.  On Facebook, Hodgkinson regularly shared his hate-filled beliefs

In a March 22 Facebook post, Hodgkinson, who  turned his ire against Trump, who he described as a “traitor.”

“Trump Has Destroyed Our Democracy,” he said. “It’s Time to Destroy Trump & Co.”

In a post earlier this week, the suspect highlighted a campaign calling for the president’s impeachment.

“Trump is Guilty & Should Go to Prison for Treason,” Hodgkinson wrote.

And just check out some of the Facebook groups that Hodgkinson belonged to

▪  “The Road to Hell is Paved with Republicans”

▪  “Donald Trump is not my President”

▪  “President Bernie Sanders”

▪  “Illinois Berners United to Resist Trump”

▪  “Boycott the Republican Party”

▪  “Expose Republican Fraud”

▪  “Terminate the Republican Party”

The hate-filled ideology of the left is intellectually and morally bankrupt, and the only thing all of this violence is going to do is to drive the American people away from their cause.

I must say that I agreed with U.S. Representative Steve King 100 percent when he told reporters that “violence is appearing in the streets”, and that it is “coming from the left”

“America has been divided,” said Rep. Steve King (R-Iowa), who, in suit and tie, stopped by the crime scene to pray and was viscerally angry about his colleagues being attacked. “And the center of America is disappearing, and the violence is appearing in the streets, and it’s coming from the left.”

And of course there has been a pattern of violence against Republican lawmakers in recent months.  The following compilation comes from Natural News

Last month, as noted by The Daily Caller,  GOP Rep. Tom Garrett’s town halls were replete with heavy security and police presence after he and his family were repeatedly threatened with death. “This is how we’re going to kill your wife,” some disgusting coward wrote, Garrett told Politico.

Also last month, Tennessee police arrested and charged a 35-year-old woman, Wendi Wright, with felonious reckless endangerment after she allegedly attempted to run GOP Rep. David Kustoff off the road following a raucous town hall event featuring the Republican health care legislation.

That same day, North Dakota police escorted a man out of a town hall meeting hosted by Rep. Kevin Cramer after a man became physical with him, shoving a fistful of dollars into Cramer’s shirt collar.

I almost didn’t want my wife to see what happened in Alexandria this morning, because I am very, very strongly considering running for Congress here in Idaho.

I couldn’t help but think that it could have been me out on that baseball field.

It would be naive to think that more Republican lawmakers won’t be targeted.  Just like radical Islam, the radical left in this country will never be satisfied until they completely eradicate our way of life.  The radical left uses tools such as threats, violence and intimidation because they simply do not have the ammunition to win in the marketplace of ideas.  And so anyone that tries to stand up to them will become a potential target.

But if we just sit back and do nothing, they will win by default.

In the end, Hodgkinson and others like him will fail.  Because every time they strike us, all they are doing is waking up a sleeping giant called “the American people”.  We will not bend, we will not bow, and we will not break, and no matter how violent they become our resolve will not waver.

Every since the very beginning of our nation Americans have had to stand up against tyranny, and we aren’t going to back down now.

The Economic Collapse

DC Swamp Shutting Down Trump, Bitcoin Skyrockets

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Coming up Michael Pento of Pento Portfolio Strategies joins me and lays out a scenario he says is ahead for the economy, interest rates, and monetary policy – all of which point to a watershed moment for gold.  You simply will not want to miss a truly enlightening interview with Michael Pento, coming up after this week’s market update.

Gold and silver markets held their own this week even as crude oil prices dipped, the Fed vowed more rate hikes, and the stock market set another new record.  The gold price currently comes in at $ 1,268 an ounce, up 0.9% on the week.  Silver trades at $ 17.38 as of this Friday recording and is posting a weekly gain of 2.6%.

On Tuesday, the White House sent Congress a $ 4.1 trillion spending plan.  President Trump’s budget makes cuts to a variety of agencies and programs.  At the same time, it boosts defense spending by $ 500 billion over 10 years and makes no changes to Medicare and Social Security retirement benefits — the largest programs in the budget. 

Administration officials also boast that their plan balances the budget in 10 years without raising taxes.  To achieve this feat, they assume economic growth will rise to a rate of 3% per year.  That’s significantly higher than we’ve seen in recent years.  Government economists are predicting growth of around only 1.8% over the next decade.  Even that could turn out to be overly optimistic, especially if a major recession hits.

The political reality is that Trump’s budget for fiscal year 2018 won’t make it through Congress anyway.  Trump and his policy agenda now have significant opponents on both sides of the aisle.  Republican Senator John McCain, a hot-head who holds a personal grudge against Trump, went out of his way to share his negative feelings about the administration’s new budget proposal.

Moderator: The President’s budget is going to be delivered to Congress today. First, your reaction to it.

John McCain: My reaction is it’s probably dead on arrival. My second reaction is that, what is that old line about figures lie and liars figure, or something like that?

Katie Link (Newsy): President Donald Trump released his proposed budget Tuesday, and it didn’t take long for critics to point out that it’s based on pretty optimistic assumptions. The Trump budget anticipates 3% economic growth by 2021, producing about $ 2 trillion in additional revenue. Three out of the last four U.S. presidents averaged annual GDP growth around 2% or less, and data from the Federal Reserve predicts a long-term annual growth of just 1.8%.

Investors who continue to bid up stocks to record highs seem oblivious to the political reality that the Trump economic agenda of less government regulation, lower taxes, and higher rates of growth will be nearly impossible to achieve.  If the economy does miraculously start hitting the administration’s growth targets, the Federal Reserve stands ready to spoil the fun with rate hikes.  The minutes from this month’s Fed meeting show Janet Yellen and company very likely to resume raising rates next month.

In recent years, precious metals markets have reacted to changes in the Fed policy opposite to conventional wisdom.  Gold and silver fell following the announcement of QE3 and bottomed just as the Fed finally raised its benchmark rate above zero in December 2015.  

Metals have held above their lows but struggled to attract safe haven demand since last year’s election.  In addition, many of those looking to hold alternative currencies have plowed into digital cryptocurrencies.  Bitcoin surged to new record highs this week.

A full-fledged mania is underway in cryptocurrencies.  In fact, according to a Bloomberg article published Wednesday, the market capitalization of all digital currencies rose by 50%, or $ 90 billion, over just seven days. 

It’s not just Bitcoin.  The number of alternative currencies have exploded in recent months.  And names such as Ethereum, Dash, and ZCash are now gaining value at a more rapid pace even than Bitcoin. 

The promise of Bitcoin is that the number of bitcoin units that can ever come into existence is limited. Unlike national fiat currencies that can be created in unlimited quantities, only a fixed quantity of bitcoins can ever be mined into existence.

The problem is that cryptocurrencies themselves can be replicated in unlimited quantities.  What will the value of a bitcoin be in 20 years when there might be literally thousands of new cryptocurrencies circulating around the world?  No one can say. 

Bitcoin’s market share has now fallen below 50% among all cryptocurrencies even as its nominal value has continued to rise. Since bitcoins have no intrinsic value, it’s possible they could one day become worthless. 

A cryptocurrency that had intrinsic value tied to gold or silver would in principle be superior to one based solely on mathematical formulas.  As he discussed with me in last week’s interview, Money Metals contributor David Smith sees cryptocurrency blockchains eventually being a huge driver for precious metals demand. 

Bitcoin prices have proven to be extremely volatile.  Lately, it’s all been to the upside.  But when the tables turn and the speculative mania goes bust, lots of people will be seeking a sounder alternative to cryptocurrencies backed by nothing.

When you own physical precious metals, you own a TANGIBLE form of money with intrinsic value that has stood the test of time.  Gold and silver coins can’t be hacked, tracked in a blockchain, inaccessible in an internet or power outage, or simply vanish into cyberspace.  They’ll maintain real value over any period of time – years, decades, or centuries from now when bitcoins may be as obsolete as failed fiat currencies of the past.

Well now for more on Bitcoin, what’s likely to happen on the economic front the rest of the year, and the future outlook for metals, let’s get right to this week’s exclusive interview.

It’s always a real pleasure to have him join us. Michael, how are you today? Welcome back.

Michael Pento: I’m doing fine, Mike. Thanks for having me back.

Mike Gleason: When we had you on last you commented that you believed the market was pricing in President Trump getting virtually all of his policy agenda pushed through Congress, the tax cuts, repealing Obamacare, and so forth. To say Trump has encountered some resistance in Washington would be a major understatement. The establishment of the right doesn’t seem to like him. The left and the mainstream media of course hate him. So, Michael before we get into the effects this will have on the markets here, first off, handicap for us the chances of Trump, based on what’s been transpiring in recent weeks, miraculously gaining enough allies in Congress in order to get his initiatives passed.

Michael Pento: I did say that the market was pricing in the imminent effect of a massive tax cut — and I meant tax cut, not a tax reform package. In other words, cutting the rate from 30% to 15% or even 20%, but certainly not offset by any spending cuts or an elimination of deductions. The market is still pricing in a lot of that hope and hype, in my opinion. But I had said and warned from the beginning, this was back right after the election, I did say that the Trump “stimulus” package — and I’ll put “stimulus” in quotes and I’ll explain why in a second — I said that the Trump “stimulus” plan would be both diluted and delayed.

It looks like that’s exactly what’s going to happen and is happening. I would be very, very shocked if we see anything before the August recess in the realm of healthcare, certainly in the tax reform package. It is my best guess that in early 2018 Trump will ram through a very adulterated and attenuated package that will be mostly a minor reduction in the rates, which is for the most part offset by some type of a reduction or elimination in write-offs.

In other words, the market is extremely, extremely overvalued, and – and we’ll get to this later – the only thing left holding this market together on top of a massive bubble is the perpetual QE from Europe and Japan. I do not expect the QE from Japan to end any time soon, although I do expect later this year at least some salvos from the BOJ, that that’s something that they might be able to do in the future. I do expect QE to end in 2017 in Europe.

Mike Gleason: Leads me right into my next question here. You summarized things very well in your Pentonomics piece this week. And for folks who aren’t getting those, you simply have got to get on the email list and get those on a regular basis. Go to PentoPort.com and sign up for that. It’s truly fantastic stuff. I want to read an excerpt from that and then get your comments here. You wrote:
“The truth is this extremely complacent and overvalued market has been susceptible to a correction for a very long time. But just like Trump, it has so far behaved like it is coated in Teflon. North Korean atomic bomb tests, Russian election interference, Trump’s alleged obstruction of justice, an earnings recession, GDP with a zero handle; who cares? As long as a tax cut could be on the way and global central banks keep printing money at a record pace, what could go wrong?”

With all that said, talk about the danger and when and where things might finally fall apart here, Michael.

Michael Pento: Wow, what a great question. Let’s just look at the earnings picture for a second here. In Q1 2017, the projected, not the actual yet, but the projected earnings is going to be $ 30.77. This is from FactSet data. If I look at Q1 2015, and I’m going to explain in a second why I’m going to 2015, the S&P 500 earned $ 29.01. So, we have earnings growth in this country, if you go two years back, is only 6% over those two years. And, more importantly, let me say, Wall Street loves to cherry pick data, so if you look at the earnings growth year over year, it’s much better. It’s close to 15%. Of course, this is pro-forma earnings that I’m talking about here, not gap earnings.

The reason why Wall Street likes to do that is because we had a vicious draw-down in the oil price right around that time. There was negative earnings in the oil sector. Now the oil sector is displaying year-over-year growth of 630%. I can assure you, that’s not going to be repeated in the future. So, if you look at earnings, the trailing 12 month earnings for all of 2016: $ 119.27; 2014: $ 118.96. so, the S&P 500 is up 30% in that time frame with virtually no growth in earnings. You have to ask yourself, why? Why would the stock market be up 30% — after being up, by the way, significantly before then – when there’s no growth in earnings?

People say it’s all about earnings. I’ll tell you, Mike, and this proves my point, I’ve always said the stock market is a function of monetary expansion. It’s a function of the yield curve and it’s a function of central bank money printing and private bank expansion of the money supply. And what we see now – and this is not my data, it’s data you can find very easily – that the first four months of 2017 central banks have printed anew over one trillion dollars of phony fiat confetti credit. That stimulus primarily coming from Europe and Japan is fungible. It finds its way all over the globe.

That’s when I wrote that commentary. I said, “You know what? Literally we have nuclear bombs being tested in North Korea. We just came out of an earnings recession, but the stock market went up 30%. Trump may be impeached. The market goes down one day and it’s buy-the-dip. Why would this ever be the case?” Why would it be the case when the stock market, if you look at it as a percentage of the economy, is virtually at an all-time record high outside of a small window in the year 2000? If you look at price to sales, it is virtually at a record high.

Why is the market so expensive? Why is it so overvalued? Because central banks are still in the process of blowing up asset bubbles. That is changing. It has already started. In December of 2013 the Fed started tapering. That was tightening. They started to raise rates. This will be another rate hike probably in June. I think that’ll be the Fed’s last rate hike, but I do think they try to get one more in. And I’m fairly confident that the yield curve will invert sometime between June of this year and June of 2018.

If I can just have a little more leeway here, Mike, I want to explain why I think that is and why it’s so important. Right now, you have to understand that the yield curve is very important to the economy and to the money flows that I was talking about into the stock market, because we have a fiat, debt-based money system. Banks lend money, and that increases the money supply. Banks will not lend money when the yield curve inverts. In other words, when they’re paying their depositors more than they can collect on their assets, why would they make new loans? They stop. And when new loans dry up, asset bubbles plunge. That happened in the year 2000. It happened in the year 2007. The yield curve inverted, bank loan growth dried up, and the stock market fell 50%.

Right now, we have a 1% Fed Funds rate and a 2.3% 10-year note. A 2-10 spread is what I’m particularly talking about. And the 2-10 spread is 1.3 to 2.3, a little bit less than it is right now, a little bit less than 1%. Very, very narrow spread. The Federal Reserve says that they can raise rates to 2.75%-3% on the Fed Funds rate by the end of 2018. You get that? In the next year-and-a-half, which is not too far away, the Fed is convinced they can take the Fed Funds rate to nearly 3%. I will tell you that if you have a 10-year note at 2.3% and a Fed Funds rate at 3%, economic Armageddon is around the corner.

Now I don’t think they ever get anywhere near there. I don’t think they can ever raise the Fed Funds rate anywhere near 3%. But I do believe they can raise it to around 1.5%. That means that the 10-year note, instead of rising, will fall, because what is the long-term rates most concerned with? They’re most concerned with inflation. So, the long-term rates will fall, short-term rates rise, yield curve inverts, and you look at a chaos and a catastrophe sometime between June of this year and June of 2018.

Mike Gleason: The last time we had you on we were kind of wondering out loud together about whether Trump is going to be aiming for a strong dollar or a weak dollar. Now that we’ve seen him at work here for the last four or five months, what does it look like to you on that? Is what we’re seeing and hearing from his administration and him indicative of his policies being dovish or hawkish?

Michael Pento: I’ve got to tell you, it’s another good question. We don’t know. (During) the campaign Trump was (saying): Janet Yellen must go, the Fed must raise rates rapidly, pop the bubble’s extent in real estate and in equities, and we want a strong dollar. Now that’s candidate Trump. So, President Trump … In fact, even yesterday, I listened to Treasury Secretary Steven Mnuchin claiming that we can’t have a border tax adjustment, we cannot have a BAT, because of its potential effect on the U.S. dollar. In other words, surging value of the U.S. dollar. That means to me – and Steven Mnuchin gets his marching orders from Trump – so that means that President Trump is diametrically opposed to candidate Trump as far as what he believes is a bubble and where he thinks the value of the dollar should be.

We have Trump is going to be able to appoint several members, five to six members, on the FOMC, including a chairperson. I think Yellen goes out February 2018. So, we will see for sure what kind of individuals. Are they Taylor-based, rules-based FOMC members? Or are they uber-doves? And it’s my belief looking at what I see from Trump so far that they will be more on the dovish side of the ledger.

Mike Gleason: You have addressed some of the macro events that markets are facing. Let’s get more specific for a minute and talk about the outlook for metals in the months ahead given the larger picture. Gold and silver got off to a strong start in 2017, fell back, and have begun a bit of a rally here the last week or two. Do you think we can expect safe haven buyers to return in force in the months ahead? And are there any drivers in particular you think investors should focus on when it comes to the metals?

Michael Pento: I’m looking very closely at the data, Mike. You had a big divergence between the hard data and the soft data. Now the latest data, if you look at the Richmond Fed manufacturing survey and the Empire State manufacturing survey, these formally erstwhile, very strong soft data points are starting to come out soft. The argument was, will the soft data lead the hard data up, or will the soft data drop down to the hard data? Looks to me like Q2 is not starting out very strongly if you look at new home sales, existing home sales that came out today, and various other soft data metrics that I just mentioned all point to the fact that I don’t think you’re going to have a Federal Reserve that’s going to have the ability to raise rates two or three more times in 2017.

And on the other hand, you see some pretty good strength in Europe. Now I don’t think the European strength is going to last either, but the point of the fact is that the diametrically opposed monetary policies, one of we have 60 billion euros printed a month in Euroland with Mario Draghi, and actually being prepared for quantitative tightening, I’ve called this quantitative tightening, where the Fed, instead of QE, which is when they buy longer-dated assets to push down on the yield curve, they are actually going to be unwinding their balance sheet, supposedly, later this year or early next year. We’ll find out more when the FOMC minutes are released today. So, you have a fact that the Fed is actually threatening to sell trillions of dollars’ worth of bonds.

I don’t think any of that’s going to happen. As I said before, watch the yield curve for the value of equities. As the value of equities and real estate go, so goes the economy. That’s been proven over and over again. Watch the yield curve. Watch these asset prices. I think as the yield curve continues to tighten, and all of your listeners should go and look at a 10-2 spread, look at a chart and notice how trenchantly dynamically that is tightening very, very rapidly. I think that we’re going to have an inverted or very, very shallow real curve by the end of 2017, and that’s going to bring about a change in monetary policy. This change in monetary policy to equal that of the ECB will cause the dollar to fall, and that is the big watershed change in precious metals prices.

That’s what’s holding gold back, especially in the miners. We haven’t had stellar performance from the miners, or even gold, even though gold is up about 9% so far, 8%, 9% this year. I think we’re going to go right back to all-time highs once that watershed event occurs. Again, what is that event? That event is when the Fed has to admit that it can no longer follow its dot plot and it reverts from a tightening monetary policy to one that is static or easing.

Mike Gleason: A bit off topic here, and as we begin to close, Michael, at what point do you see the banksters on Wall Street coming up with a way to short Bitcoin? Because you know the Wall Street and central banking elites cannot be too thrilled with seeing Bitcoin’s amazing rise.

Michael Pento: Well, I’ve got to tell you, I understand the philosophy behind Bitcoin. I’m not a huge fan of Bitcoin, because while I believe it’s a wonderful currency and it represents the desire to get out of a fiat currency regime, we already have something called gold, which is not only a pretty good currency, but it’s also perfect money. It’s transferable. It’s portable. It’s beautiful. It’s very rare and virtually indestructible. Where Bitcoin fails is that it’s not money. It’s not virtually indestructible. If you bring down the internet, your Bitcoin is worthless, or the grid or the internet. And it is not very rare because there’s a virtually unlimited number of these digital currencies. So, it’s trying to be money, and even though it’s a perfect form of currency, it lacks all the qualities necessary to become money.

Gold, on the other hand, is perfect money, but it’s an okay currency. But, if you ask me, what’s the rationale behind Bitcoin? The rationale behind Bitcoin is very solvent and very true in that we need another alternative to central banks. Because I believe in the coming few years, and it might not even be that long, Mike, that physical currency will be banned and you will have negative interest rates in your bank deposits. So, the government will steal your money, telling you that you get a negative rate for this period of time, quarter or year — say negative 5%, negative 10% — and you must spend your money. You can either keep your money in the bank and lose the nominal purchasing power as well as in inflated adjusted terms, or spend it. And that is their way to get inflation going.

That’s I think where we’re headed down the road. It’s a very real and credible danger. It’s not my imagination. It’s not my conspiracy theory. It’s what they’re actually discussing, and things of this nature have already happened around the world in countries such as India.

Mike Gleason: That’s a very real possibility, and if the time does come when that happens, those that actually have something other than dollars, whether it be gold or Bitcoin or something along those lines, are going to be very glad that they had it when the time comes.

Michael Pento: Mike, one more thing I wanted to mention about gold. And for those who are temporarily suffering under gold, you should understand this, that we are in a condition in this country, in this nation that uses dollars, which is the world’s reserve currency for now, we are in a condition now where deficits are set to absolutely explode in the next few years. I want to just go over it real briefly. The CBO projects that our deficit will be a trillion dollars per annum in the next 10 years, very early in that time frame. If we have a recession, you can add another $ 1.4 trillion, like we did last time, to the annual deficit.

The Fed is threatening to do something called quantitative tightening, like I mentioned before. They’re going to sell around $ 3 trillion worth of treasuries and mortgage-backed securities over the next seven years. You can add that several hundred billion to that total. If we do have tax cuts that are not paid for, you can add about $ 5 trillion – even after assessing for growth – $ 5 trillion over the next 10 years. And for every 1% move higher in interest rates, you’re looking at $ 200 billion each year.

So, deficits in the next few years have a very real chance, especially when we enter a recession — and I don’t think the Fed has repealed the business cycle — to be multiple trillions of dollars in the next recession. That’s a very, very real danger. And if you don’t think that’s going to bring back a change in monetary policy, you’re sadly mistaken. That’s when I think gold really hits its full stride.

Mike Gleason: Excellent stuff as always, Michael. It’s great to have you on again. We certainly appreciate you making some time for us today. Now before we let you go, as we always do, please tell people who want to both read and hear more of your wonderful market commentaries and also learn about your firm and how they could potentially become a client if they’re so inclined, tell them how they could do all that.

Michael Pento: The website is PentoPort.com. You can look under my Mid-week Reality Check there, sign up for it. You get a free trial. It’s only $ 49 a year. You get all kinds of arcane facts and details and statistics that the mainstream media won’t get you, but people like you, thank God, will have people like me on to talk about. So, it’s PentoPort.com. The email here is mpento@pentoport.com, if you want to email me directly. The phone number for the office is 732-772-9500.

Mike Gleason: Again, wonderful insights, Michael. Thanks so much for joining us. Enjoy your Memorial Day weekend, and we look forward to having you back on again soon. Take care.

Michael Pento: Thanks again, Mike.

Mike Gleason: Well that will wrap it up for this week. Thanks again to Michael Pento of Pento Portfolio Strategies. For more information just visit PentoPort.com. You can sign up for his email list, listen to the midweek podcast and get his fantastic market commentaries on a regular basis. Again, just go to PentoPort.com.

And don’t forget to check back here next Friday for our next Weekly Market Wrap Podcast, until then this has been Mike Gleason with Money Metals Exchange. Thanks for listening, and have a great weekend everybody.

Precious Metals News & Analysis – Gold News, Silver News

Gold’s Recent Bounce Is Temporary: The Trend is Still Down in 2017 (and Beyond)

harry-enm-picTwenty-two radio interviews for the new book, 10 of them live.

At this point, my voice is tired. So are gold sellers.

Gold peaked at $ 1,934 in September of 2011 – the last major commodity to peak in the 30-year cycle that first peaked in mid-2008.

Silver peaked in late April 2011, after retesting its dramatic bubble peak in 1980, at $ 48. That’s when we gave our first and biggest sell signal for gold and silver.

After gold’s peak in September 2011, its first wave down ended up in a two-year-long trading range that vacillated between $ 1,525 and $ 1,800. During that time, I warned that when gold broke below that $ 1,525 level it was toast… and its major crash from $ 1,800 in late 2012 to $ 1,050 in late 2015 was indeed devastating.

Well, there’s likely another wave of that magnitude starting this year… As I’ve said all along, the next major target in gold is its 2008 low of around $ 700. To get technical with Elliott Wave Theory, that would retest the 4th-wave correction before the largest 5th-wave bubble run into $ 1,934. I still see gold landing somewhere between $ 650 and $ 750 in the next year or so, likely by the end of 2017.

But we’ll only see this after a significant bounce ahead…

At the beginning of 2016, I forecast that gold was very oversold. It was at $ 1,050 per ounce in late 2015 and so due for a major bear market rally back up to as high as $ 1,400. As I said it would, gold did bounce and got to $ 1,373 per ounce in early July 2016, at which point I recommended selling again. Lo and behold, gold fell rapidly to $ 1,124 in mid-December.

Gold is now very oversold again, but on a shorter-term basis, and its due for a minor rally to around $ 1,250. But given how oversold it has gotten, it could even go back to a slight new high near to $ 1,400. That could come by mid-February or so.

We’re currently betting against gold in our model Boom & Bust portfolio, and sitting pretty on that position. To project our profits while waiting for this mini-boom, Charles Sizemore, our Portfolio Manager, instructed subscribers to increase their stop loss in case this stronger rally ensues. But if it does get to near $ 1,400 again, that will be an even better time to bet against gold.

In the January Leading Edge issue, I’ll look at all major markets through the lens of the smart and dumb traders at the Commitment of Traders Report (www.cotbase.com). Of the commodities it looks at, gold has a bit more bounce potential ahead than oil and copper, but not likely for long. Here’s what that looks like…

1_10-enm-harryThe commercial hedgers are the smaller segment – the “smart money” – because they always go against the trends to hedge.

The large speculators are the “dumb money.” They simply follow the trends up and down and are always wrong at major tops and bottoms.

Gold hit a record divergence in dumb money net long at 320,000 and the smart money net short at 340,000… more so than even at the secondary top in late 2012 before the big crash into 2013-2015.

In other words, that was a bear market bounce, as I forecast at the beginning of 2016.

Gold then dropped 250 points into mid-December and is now bouncing again after being very oversold on a shorter-term basis.

The record divergence of July has not been erased yet. That would require going back to near neutral or slightly negative on this market. Currently the dumb money is still 100,000 long and the smart money 110,000 short.

That means there is much more to come on the downside after this short-term bounce resolves itself – again, likely by mid-February.

Silver had an even larger divergence a bit later into early August and looks to have even more downside potential.

My forecast of $ 700 gold and $ 10 silver is increasingly likely by the end of this year and almost certain in the next few years.

This rally will be the last chance for gold holdouts to get out!

The ultimate downside for gold at the bottom of the 30-year commodity cycle, between early 2020 and late 2022, is $ 400 or lower to erase the bubble that began accelerating in 2005. For silver those targets are as low as $ 5.

That’s when I would start to recommend buying gold and silver again longer term, with a target of $ 4,000-plus for gold by 2038-2040. The next 30-year commodity cycle could be the greatest ever seen because it will be driven by the demographically growing and still-urbanizing emerging world. They’re the ones who’ll be producing and consuming most of the gold and other commodities – especially India.







P.S. All those radio interviews I did today were to promote my latest book, The Sale of a Lifetime. Have you got your copy yet? I’ll send a couple of links to those interviews over the next few days, so you can hear for yourself what I talked about.

The post Gold’s Recent Bounce Is Temporary: The Trend is Still Down in 2017 (and Beyond) appeared first on Economy and Markets.

Harry Dent – Economy and Markets ()

NOVEMBER: Gold Price Down, Chinese Demand Strong Despite Import Curbs



From the moment Donald J. Trump got elected as the next President of the United States, on November 8, 2016, the price of gold tumbled 8 % in the remainder of the month – from $ 1,282 USD/oz to $ 1,178 USD/oz. Usually these cascades in the gold price go hand in hand with physical sell-offs in the West and strong demand Asia. It appears November has been no exception. The volume of physical gold withdrawn from vaults of the Shanghai Gold Exchange (SGE) in November accounted for 215 tonnes, the highest amount in ten months. Year to date SGE withdrawals have reached 1,774 tonnes. 

There have been rumours in the gold space about the People’s Bank Of China (the PBOC) curbing gold import into the Chinese domestic market in response to capital flight. Although my sources have confirmed these rumours, Chinese gold import in November was still very strong at an estimated 140 tonnes. I don’t expect the PBOC will halt gold import all together.

Exhibit 1. Chart by Nick Laird from Goldchartsrus.com. The international gold price in USD/oz (yellow), the SGE gold price in USD/oz (red), the SGE premium over the international price in percentages (blue, left axis) and the SGE premium over the international price in USD/oz (black, right axis).

The first mention of the rumour was by Reuters on November 25. By then the premium on physical gold trading at the SGE, which more or less reflects the strength of local demand versus international supply, had reached 2 % (from ~ 0.2 % on November 1). Reuters wrote:

“While we don’t have the exact numbers, we hear that they (Chinese government) have limited the number of importers,” said Dick Poon, general manager at Heraeus Precious Metals in Hong Kong.

In a previous blog post I stated the quote from Poon was not likely to be accurate, because there are 15 banks that have PBOC approval to import gold, but for every shipment a new License must be requested at the central bank. This protocol is referred to as “one batch one License”. Bullion cannot cross the Chinese border without a License. From the PBOC:

There shall be one Import … License of the People’s Bank of China for Gold … for each batch … and the License shall be used within 40 work days since the issuing date.

If the PBOC desires to curb gold import it can simply hand out less Licenses to approved banks, instead of deleting banks from the approved list. The former has happened as far as I can see. The next mention was by the Financial Times on November 30 [brackets added]:

Some banks with licences [approval] have recently had difficulty obtaining approval [Licenses] to import gold, they said — a move tied to China’s attempts to stop a weakening renminbi by tightening outflows of dollars, the banks added. 

Although the Financial Times exchanged the terms “approval” and “License”, this is what I thought that was happening: banks are obtaining less import Licenses from the PBOC, which is obstructing supply, pushing up the SGE premium.

Either way the PBOC effort has not severely impacted the volume of Chinese gold demand as SGE withdrawals set a ten-month record at 215 tonnes in November, up 40 % from October. Premium or no premium the Chinese still ‘accumulate on the dips’. Additionally, mainlanders buy gold in Hong Kong where jewelry is cheaper as it doesn’t enjoy VAT. From Live Trading News we read:

“Gold sellers in Hong Kong, where mainland Chinese often buy gold, report an increase in purchases, …” according to published reports. “Some of the buying is also because of the Lunar New Year period next month, a time when buying normally picks up.”

Exhibit 2. Monthly SGE withdrawals versus the SGE gold price in yuan per gram.

How much of SGE withdrawals were supplied by import? Let’s make an educated guess. In the first nine months of 2016 SGE withdrawals accounted for 1,407 tonnes and China net imported 908 tonnes over this period, implying 65 % of SGE withdrawals was imported. If we use the past months as a reference China imported 140 tonnes of gold in November (=0.65*215). Year to date (-November) China has imported and estimated 1,147 tonnes.

An other possibility would be that elevated SGE withdrawals in November were supplied by scrap and disinvestment from within China (domestic mine output is fairly constant at 38 tonnes per month). Though this is not very plausible because the renminbi gold price went down in November (red line in exhibit 1). Normally scrap supply increases on a rising gold price. And hence, I assume the majority of SGE withdrawals in November were supplied by imports.

There have been concerns in the gold community with respect to a full stop on Chinese gold import. In my humble opinion the PBOC will not completely block imports for a number of reasons:

  1. Despite the rumours of obstructed imports SGE withdrawals were strong in November.
  2. The PBOC hasn’t released an official statement to curb imports.
  3. The PBOC has just spent decades to develop the Chinese gold market in order to strengthen the Chinese economy and internationalize the renminbi. Why cancel the project for problems that can be solved differently?
  4. Curbing gold imports would improve China’s current account. But China has a current account surplusthe capital account is in deficit. Why doesn’t the Chinese government tighten the capital account? In Q3 2016 China’s capital flow was minus 71 billion US dollars. In the same quarter gold import was valued at an estimated 13 billion US dollars. The problem is in the capital account.
Exhibit 3. China current account. Courtesy Trading Economics.
Exhibit 4. China capital flows. Courtesy Trading Economics.
  1. SGE premiums started to rise on November 8 exactly when the gold price went down (which SGE premiums often do when the price goes down, exhibit 5). So are these elevated premiums of late fully caused by curbed imports, or simply strong demand? It’s probably a mix of both; in any case there is no full stop on imports. What probably happened is that imports exploded when the price tanked after November 8. As a result the PBOC decided to block shipments.

In the next chart we can see SGE premiums move inversely to the price of gold. When the price of gold goes down the Chinese ramp up purchases and SGE premiums rise.

Exhibit 5. End of Day SGE premiums versus gold price.

The PBOC has added zero ounces of gold to its monetary reserves in November. It’s total monetary gold reserves currently account for 1,843 tonnes.

The post NOVEMBER: Gold Price Down, Chinese Demand Strong Despite Import Curbs appeared first on Koos Jansen.

Koos Jansen