Where to Put Your Money in 2018

It seems I find myself in a bit of a conundrum. I write a newsletter, Peak Income, dedicated to finding profitable income investments at a time when bond yields are rising and income-oriented investments are coming under pressure.

As I write this, the 10-year U.S. Treasury yields just shy of 2.6%. As recently as September, the 10-year yield was touching 2%. That’s a big a move in a very short period of time.

Hey, I get it. Some of this is understandable. The U.S. economy has picked up steam of late, growing at over 3% in each of the past two reported quarters. And this was before the corporate tax reform package, which promises to give at least a mild boost to the economy.

But what does this mean for bond yields? And does investing for income still make sense in a market like this?

What’s Next for Bond Yields?

Inflation – or the expectations for inflation – is the single biggest factor in determining the direction of bond yields.

On this count, I don’t think we have much to worry about. As Harry has written for years, aging populations are deflationary as older consumers tend to borrow and spend than younger and middle-aged consumers. You don’t see a lot of 70-year-old Americans buying expensive new homes or cars. They’re far more likely to be downsizing and adjusting their lifestyles to stay within their retirement budgets.

But there is far more than just demographics at work here. We’re also in the midst of one of the biggest technological shifts in history.

One of the biggest themes of last year was the “Amazon effect,” and I don’t see that slowing down any time soon. Amazon disrupts every industry it touches, lowering prices and forcing new efficiencies into the supply chain.

But it’s not just Amazon. In virtually every consumer-facing industry, kiosks and smartphone apps are replacing human labor. In everything from McDonald’s to your local airport, expensive humans have been replaced by cheaper machines or software. And should we start to see a hint of inflation, that trend will only accelerate.

Even Bitcoin, despite being one of the greatest bubbles in history, is deflationary. The blockchain ledger technology that supports Bitcoin is the future of data, and the blockchain is vastly cheaper to support and requires far less in security outlays.

Sure, we may continue to see inflation in certain pockets of the economy, like healthcare. Because of its dependence on a doctor’s or nurse’s one-on-one time with a patient, healthcare seems to be the one industry that has (thus far) been immune to the deflationary effects of new technology. But, overall, inflation should be very tame going forward.

What does this mean for bond yields?

They may go a little higher in the short term. But a long-term rise in yields such as that of the 1970s isn’t in the cards.

This is a long way of saying that I expect my income recommendations in Peak Income to do just fine in 2018.

Where Are the Best Bargains in 2018?

I feel good about my U.S. income recommendations this year. But that hasn’t stopped me from looking elsewhere for market gains.

Peak Income does more than just invest in bonds or bond funds. In fact, most of the portfolio is invested in high-yielding stock funds that offer competitive capital gains in addition to current income.

But today, U.S. stocks are looking pricey. After more than eight years of uninterrupted bull markets, the S&P 500 today, as measured by the Shiller P/E ratio, is as expensive as it was in late 1997… in the final years of the dot-com mania.

Expensive stocks can always get more expensive. Fed Chairman Alan Greenspan made his famous “irrational exuberance” comments in late 1996, and stocks went on to double in price again before eventually crashing in 2000.

But that’s not a game I want to play. Rather than trying to squeeze out a little more profit from the late innings of a long bull market, I’m hunting for real value. And across Europe and most emerging markets, stock valuations are cheaper by 30% to 50%.

A cheaper price doesn’t guarantee higher returns. But it certainly puts the odds in our favor.

In the last issue of Peak Income, I recommended a closed-end fund with exposure to China, Taiwan and Hong Kong. It trades at a deep discount to net asset value and yields a fat 8% yield.

An emerging market play like this is not without risks, of course. But in 2018 I see this as our best opportunity to make outsized profits while also collecting a nice stream of income. Click here to learn more about how we’ll do it.

charles sizemore helicopter money

Charles Sizemore
Editor, Peak Income

The post Where to Put Your Money in 2018 appeared first on Economy and Markets.

Charles Sizemore – Economy and Markets ()




Our Most Important Campaign Deadline So Far Is Here – And Here Is The Shocking Reason I Am Not Asking For Any Money

The most important deadline that we have faced so far is at midnight on Sunday, but I am not going to ask you for any money.  I just want to say thank you to everyone that has donated, volunteered and prayed over the past six months.  Without all of your efforts, it would have been impossible for us to be within striking distance of victory here in Idaho’s first congressional district with just a little more than four months to go until election day.  When I first announced that I would be running, many people told me that it would be impossible for a political outsider to win in this district, but we are proving the naysayers wrong.  We are so far ahead of where we thought that we would be at this point, and our opponents are literally freaking out over how well we are doing.

As the December 31st deadline approaches, my opponents have been sending out email after email in a desperate scramble for money.  The reason why I know this is true is because we are on all of their email lists.

But I have decided that we are not going to do the same thing.  Yes, we need support just as badly as they do, but I am simply going to trust the Lord that the resources will come in.  We have already told our supporters what our needs are, and we are going to trust that the Lord will move in the hearts of those that are supposed to give.

The stakes in this race are exceedingly high.  As we look at the numbers, it appears likely that one particular opponent is likely to emerge victorious if I do not win next May.  If he wins, it will be a complete and utter disaster for the Trump movement.

This particular opponent fought to keep Donald Trump out of the White House, his campaign has repeatedly attacked my faith, and by lying over and over again he has demonstrated that he simply does not have the moral character to serve in Congress.

Members of Congress make decisions that affect every man, woman and child in the entire country, and if this particular individual wins this open seat, the swamp in Washington D.C. will get deeper, wider and much more icky.

So what can you do to help?  Well, what we need more than anything right now are volunteers.  If you would like to volunteer for the campaign, you can do so right here

https://www.michaelsnyderforcongress.com/volunteer.html

There are ways to get involved no matter where you may live.  One of our top priorities right now is enlisting “social media warriors”.  Facebook and other social media websites are the marketplaces of today, and we need people that will help us spread our pro-Trump message online.

So what does a “social media warrior” actually do?  Well, first of all we need people to help us promote the material that we are constantly posting on our official campaign Facebook page.  If we can get a core group of people to visit the page daily and like, share and comment on the material that we post, that will make an enormous difference.

You see, when a Facebook post starts getting even just a few likes, shares and comments, Facebook’s algorithm notices that people are engaging with that particular piece of content and begins showing it to even more people.

So if we could even get just 10 of you to like, share and comment on the material on our Facebook page on a daily basis, that could double or triple the number of voters here in Idaho that each item reaches.

Secondly, we need “social media warriors” that would be willing to serve as ambassadors for our campaign all over Facebook.  Over the next four months there will be endless debates about this campaign wherever Idaho politics is being discussed on Facebook, and we need representatives from our campaign engaging in those discussions.

Don’t worry – you don’t have to be an expert to do this.  You just need to know our basic positions on the issues, and you can find them right here and right here.  Wherever Idaho politics is being talked about, we want our people to be there to help share our pro-Trump message.

If you live in Idaho’s first congressional district, there is another way that you can help.  Starting this month, we are going to have teams go door to door passing out campaign material all over the district.  We have a very specific plan for doing this, and if you are interested we very much encourage you to attend one of our upcoming strategy sessions.  We will be holding one in northern Idaho, one in central Idaho and one in south Idaho, and please stay tuned to our campaign website for the date and location for each event.

More important than anything else I have just mentioned, we need prayer.  The Lord has been raising up intercessors from coast to coast, and one of the themes that keeps coming up over and over again is that this is a spiritual conflict.  Just like the presidential election, this is really shaping up to be a battle of good vs. evil, and there are times when I have really felt the strain.

So please pray for us.  This has been a very challenging race for both Meranda and I, and we truly had no idea how vicious and evil our opponents would be when we first got into this.  We value our reputations very, very highly, and for someone to make up lies about our faith and to drag our good names through the mud just to win an election is absolutely repugnant to everything that we stand for.

The good news is that the backlash against those that are dragging our names through the mud has been tremendous, and all of the garbage that has been thrown our direction has just made it more likely that we will win.

From this moment forward, it will be a mad sprint to the finish line on May 15th.  I would like every single one of you to be part of this team, and we have 17 different ways that you can get involved on our volunteer page.

The Lord has shown me that I cannot do this alone.  It is going to require a total team effort to win this thing, and if we all trust in Him and we all work together, then I truly believe that all things are possible.

In Liberty,

Michael Snyder
MichaelSnyderForCongress.com

The Economic Collapse




Precious Metals Finish Strong, Investors Eye Silver in 2018; David Morgan: Smart Money

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

Coming up David Morgan of The Morgan Report joins me for a replay of one of the very best interviews we did in 2017. David talks about the metals and the markets and shares his insights on what the smart money is already doing, the dangers of complacency and the importance of limiting counter party risk. Back by popular demand, don’t miss this wonderful interview with the Silver Guru, David Morgan, coming up after this week’s market update.

As markets close out their final trading day of 2017, it’s a good time to review the year that was in precious metals and look forward to the year that might be in 2018.

Even though gold and silver markets spent most of 2017 mired in unremarkable trading ranges, they are each managing to post decent gains for the year. Of course, those gains are being overshadowed by the relentless push higher in the stock market and the explosive spike in digital crypto-currencies. Overheated markets can stay overheated for some time. But the longer they go without shaking out leveraged speculators and late comers, the greater the risk of an eventual crash.

The stock market will enter 2018 with record levels of margin debt and cyclically adjusted valuations at their highest since the 2000 bubble. By contrast, gold and silver markets will enter the New Year with open interest on the futures exchanges at relatively low levels and retail bullion demand also on the low side.

The hot money isn’t betting on metals – at least not at this point in time. From a contrarian perspective, that suggests the precious metals space has lots of room to run on the upside after it finds the catalyst it needs to spark renewed investor interest.

Turning to this week’s market action, gold prices are up 2.2% since last Friday’s to come in at $ 1,303 an ounce. The yellow metal will finish 2017 close to 13% higher for the year. Gold outperformed silver again this year. The white metal is now up about 6% for 2017 after rising 3.2% this week to bring spot prices to $ 16.98 per ounce as of this Friday morning recording.

The best and worst performing precious metals of 2017 are palladium and platinum, respectively. Palladium prices surged more than 55% this year and currently come in at $ 1,059. Upside momentum could take palladium to new all-time highs in the first few trading days of 2018.

If the momentum is with palladium, then the value may be with its sister metal platinum. Platinum finds itself in the extremely rare position of trading at a discount to BOTH palladium and gold. Platinum prices currently check in at $ 936 per ounce, higher by 1.7% for the week and 3.5% for the year.

So which metals will perform the best in 2018? It depends largely on whether the economic growth story has legs. If the economy heats up due to tax and regulatory reform, then industrial metals including copper and perhaps silver as well could see impressive gains. If the economy falters and the stock market rolls over, then the safe-haven metal of gold will be the place to be.

Of course, we recommend keeping both gold and silver bullion as core holdings. But we do see more long-term upside potential in silver at these levels. By long-term, we’re looking further out than just the next 12 months. The silver to gold ratio has been depressed for the past few years. We expect a strong move in favor of silver to put the ratio back at more historically normal levels, a ratio which currently stands at a whopping 76.7 to 1.

We can’t guarantee the big move in silver will happen next year. But as long as the silver-to-gold ratio remains relatively depressed, it’s a relatively favorable time for long-term investors to be accumulating silver.

There is a very real chance that inflation could reemerge as a concern for investors in the coming year. Inflation – at least as it’s reported officially – has been nearly dormant for the past few years. In 2018, the combination of higher economic growth and higher federal deficits could reawaken inflationary fears.

Yes, the Federal Reserve stands ready to raise interest rates a few more times, or so they say. Precious metals naysayers will cite that as a reason why the U.S. dollar should gain versus other currencies.

For now, though, monetary policy is taking a back seat to fiscal policy. The tax cutting, de-regulating, spending, and borrowing policies of the Trump White House have the potential to be highly stimulative. Big on Donald Trump’s agenda in 2018 will be a push for new infrastructure spending. Infrastructure programs would directly stimulate the real economy and boost demand for raw materials.

An uptick in inflation in 2018 may well be in the cards. It may even be the catalyst that drives investors back into precious metals in big numbers.

Before we move on, I want to thank each and every one of you for tuning into the Money Metals podcast this year, and we hope 2018 brings you financial prosperity, good health, and happiness. For our part, we’ll be there again for you in 2018 – providing more great interviews and news content, plus top-notch service as we work to meet ALL your needs in the precious metals markets.

Now let’s get right to our Money Metals exclusive interview.

David Morgan

Mike Gleason: It is my privilege now to welcome in our good friend David Morgan of The Morgan Report. David, it’s always a real pleasure to have you on with us and I’m especially excited to talk with you about some of the topics we’ve got on tap today. How are you?

David Morgan: I’m doing well Mike, thank you very much.

Mike Gleason: Well, as we begin here David, I want to talk to you about the danger of complacency because I think it’s a very appropriate topic for the times we’re in right now. To you and me and to many others in our space with a similar world view, we see a whole slew of reasons to own precious metals. We have threats of war in many places throughout the globe. We have a president here in the U.S. who the establishment hates and is hoping to oust if they get the chance. We have nation central banks printing new fiat currency at unprecedented levels all throughout the world.

An entire continent over there in Europe that appears to be potentially at risk of seeing their political and currency union falling apart, terror threats all over the place, the refugee crisis, the list goes on and on. But all the while we have this stock market continuing to make all-time highs with most people seeming to believe that everything is hunky dory while completely ignoring all of those geopolitical and monetary headwinds, or for those who seem to grasp all of that, all that’s going on, maybe starting to believe that it doesn’t matter. Because, after all, the feds and the central planners are going to be able to manage this thing forever.

So, talk about complacency here David, why aren’t we seeing more flock to safe havens, at least not here in the Western world, and discuss the dangers that exist if we let ourselves fall into the complacency or the “nothing is ever going to change” type of mindset.

David Morgan: Well, that’s a tough one. I would say first is eternal vigilance, I mean freedom depends on it, so my idea or ideal from the beginning has been that all fiat currency will eventually fail. And I also believe that it would happen within my lifetime and I’m certainly older than I was when I held that belief, yet I still hold it. So, really there’s a mandate to hold some portion of your wealth in a savings, in other words, the way capitalism is supposed to work you build from a savings base and that savings is put into a capital formation, which means you construct something be it software, hardware, a building, automobile, whatever, and that becomes a benefit to society at large and they vote in the marketplace with their dollars to further the projects so to speak. Make a profit, which returns to the initial investors and on it goes. So that’s the ideal.

My statement was that in times like these rather than be a true capitalist – which is what I just outlined – it requires further savings because there’s too many uncertainties out there with one certainty: every fiat currency on planet Earth in all of recorded history has always failed. So, to say that the dollar won’t is a misstatement, at least based on past history. Is it going to, for this time, be different? Eh, I guess it’s possible. But if we look at it objectively and we state, well, let’s really see what’s gone on with the U.S. dollar, if you look at the Federal Reserve Board’s own website, they will freely admit that the 1913 dollar is worth about three cents today. So you have a 97% loss when their mandate was to basically keep the currency stable. They have failed miserably.

Most people that follow what you do, what I do, what the hard money camp, the gold/silver guys talk about, they understand this, but they are very tired out, worn out. I mean I coined the phrase a long time ago that “the silver market would either scare you out or wear you out.” We are definitely at the wear you out phase. And this is where complacency sits, in where they’ve manipulated the market, we even have proof Deutsche Bank admits it, there is a new CFTC ruling that’s gone on, that they’ve singled out an individual that’s going to turn over evidence and probably bring others into the mix on spoofing the market in the silver market, and yet we don’t really see any real significant price change.

So, the complacency (mindset) is, look, I know what’s going on but it doesn’t matter because these guys have got control and they are always going to have control. You know, it brings to mind, the adage, the dark comes before the dawn, the big struggle for seed to germinate, that last little oomph that is required and I think we are very close to the tipping point and I’ll add onto that.

First of all, I want to back up a second Mike. As you know, and you’re on my service, I put an alert early in the morning about the second week of May and I said I think this is it. Meaning, the fundamental significant shift between paper assets and hard assets, I think, we don’t know yet, that gold and silver had turned to the up-side and stocks to the down-side. Now, since I made that statement, stocks have made a new high, so let me get that on the record. However, it looks to me as if we are getting a confirmation on that with gold right now. Because gold is right at the breakout point from a six year down trend and it’s mostly safe haven buying, but it’s not the people that I just referred to, it’s basically the smart money, which means big investors, large hedge funds, and China primarily.

China’s gold demand is set to surge about 50% to about 1,000 metric tons this year. Their demand for gold bars are on track to make a 50% move in 2017. The geopolitical risk internationally is probably at an all-time high and this is leading to safe haven demand again, for smart money, nation states, people in the know, people that have basically sold off their stocks quite some time ago near the highs, that have capital sitting on the side lines and that is starting to filter into the gold market. And then you’ve got of course, a lot to do with the U.K. election, terrorism, the risking tensions in the middle east, and all of this is supportive of the gold, especially after the attacks in London that took place recently.

And the other fact, is that gold is 12% higher for the year and it’s actually out performing stocks. Yet, if you stopped the average investor on the street and asked them what’s doing better this year, I’d say about 90%, probably higher than that, probably 98% would say, well stocks are doing better than gold.

Mike Gleason: Yeah, it’s a very valid point. As a follow up here, and this is kind of an open ended and very broad topic, but comment on counterparty risk, because I know that is something that you’ve been covering in The Morgan Report recently. Take it wherever you want, but share your thoughts there, because part of this complacency is failing to recognize the tremendous amount of counterparty risks that exist in the world today, give us your thoughts there David.

David Morgan: Yeah, I could go on, I’ll try to be succinct. First of all, the belief system is so strong, and yet the truth is sometimes actually opposite of a very, very strongly held belief. The belief globally for all of the establishment economic system, which means all nation states, big hedge funds, all banks, etcetera, believe that the safest place that you can be in is the United States bond market, be it a treasury bill, a T-note, a long bond, anything in between. If you own the full faith and credit of the United States debt, you are buying something extremely safe. And the truth is, it’s the exact opposite. It is probably the once place that at some point in time, everybody is going to want to get out of it, perhaps at the same time or close to it.

How can I say that? Well, going back to what I stated, all fiat currencies eventually fail, so this is proven time and time again, yet the belief system has yet to shift in a dramatic way. However, the cryptocurrencies are a bit of a tip off that somebody understands what is going on, and I admit, the best place that you could have possibly been over the last 30 years, for a long term buy, hold and forget it trade, would have been the U.S. bond market, this is true. But nothing grows to the moon. I mean, all trees grow as high as they grow and then they stop. It’s the same thing with the bond market.

So, there is a huge debt bomb that we talked about in The Silver Manifesto, that’s waiting to go off and when that happens, and it doesn’t necessarily mean one day, boom it goes, and everybody understands it. It’s more likely to take place slowly, slowly, slowly and then all of a sudden. Which means that a lot of savvy people will be exiting the dollar, which we have seen for years now. We’ve seen a lot of nation states that have basically abandoned the dollar slowly, sometimes fairly quickly: China, Russia settling their payments between each other in their own currencies. A lot to move from the AIIB (Asian Infrastructure Investment Bank). I mean there is a lot of periphery situations that savvy people are aware of that have been a way for, not only individuals through the cryptocurrency situation, but nation states to exit exposure or much exposure, or to mitigate their exposure to the U.S. dollar. And this is a harbinger for what will take place at some time in the future. So, these things always end, the longer you add, to coin (a phrase) and give credit to Jim Sinclair, “pretend and extend,” you pretend that everything is okay and these guys pretend they can manipulate it forever and extend the problem, the worse it becomes, and this is the state that we’re in right now.

Mike Gleason: A follow up there on cryptocurrencies, David we’ve seen a real boom in those lately. Now, I think we would probably both see value in owning some Bitcoin or one of the alternatives, but one thing that we should say is that digital currencies are not and should not be viewed as a substitute for owning gold and silver, which have stood the test of time as money and have been money all throughout history, comment on that if you would.

David Morgan: Well, there’s two theories on money. One is that money is whatever the government says it is, which is a legal fiction, and of course you could be the argument that it’s salt, or it’s cow hides or it’s sheep or it’s whatever. Well, certainly that’s been tried throughout history, but the argument is either it is a legal fiction or it’s specie: it’s something of value that has value in and of itself and I would argue silver actually has more value than gold, because you can use silver for medicinal purposes, you can use it for electronics, you can use it as money or barter, and it fulfills actually more services to whoever owns it than gold does. But regardless of my thoughts on the two metals, gold and silver from time in memorial all of recorded history have been chosen by the free market as money of substance. And this is where you can’t get around the argument, I mean, a lot of people have been brainwashed into believing that gold and silver have no purpose today, they really aren’t money, and on and on it goes. So, the idea that you can create something out of nothing and it has value has been tested time and time again, and again they always fail.

On the cryptocurrencies, I’m not against them first of all, in fact I just gave a lecture about them. I talked about gold, silver and the blockchain, of course I mentioned Bitcoin primarily because it’s the leader, bitcoin is unusual, I mean let me again back up slightly Mike.

First of all, to be intellectually honest, would a cured fiat system work in theory, and the answer is probably yes, to be intellectually honest. If and only if you had a limited supply of dollars and they only grew as the economy grew, you would have in theory, a pretty good paper system.

However, that has never been the case, even when the gold-standard-basher’s bash gold, they’ve said well, the gold standard has never worked. Well, yes and no. The gold standard would work because what gold’s purpose is, is to keep that money supply growing basically at 2% a year, which is probably what a lot of the people on the left side would like, which is sustainable growth. And in a real, true economic system that is backed by physical reality rather than a make believe set of derivatives that is unimaginable at this time, you have an economic system where each dollar over time becomes more and more valuable. But that is not where we’re at. So, we’re in a situation where there is a challenge to the system, and the main challenge really isn’t coming from the precious metals, the main challenge is coming from the cryptocurrencies.

Bitcoin is obviously the leader, I look at it Mike, right now with 750 different cryptocurrencies out there, being similar to what happened in the tech wreck, where a lot of these domain names were getting huge valuations for a very short time and a lot of people were piling in. And yet today we still have Yahoo.com, Amazon is a big leader, there are certainly companies out there that were the real deal, stood the test of time, and a lot of these dogs and cats went away very rapidly. I think the same thing will take place in the cryptocurrencies. I do think that some of them are here to stay, I think Ethereum is really not a coin, I think it’s a platform. I think few people really understand it’s potential. I think it’s one I’m favorable to. Bitcoin, it’s hard to argue against, I mean, the markets certainly voting very strong for that one. Dash is an interesting one, I certainly don’t know them all, I don’t claim to be an expert.

But one place I really do have some concerns is security. And I gave that main concern at this lecture I did in Vancouver recently, and of course I got some blow back on it and people were telling me, you can take your account and write it down on a piece of paper and hide it under your desk and that type of thing, I get that, I understand that. But there’s already been security issues with Bitcoin and a lot of people won’t do that. I mean, just because you have the potential to make it more secure doesn’t necessarily mean that most people will. So there is some vulnerabilities out there and this is not me speaking, these are someones at a recent tech conference, and these were high level people that were talking about the internet of things and how vulnerable all this internet of things model is with this, what’s called big data, that is taking place before us right now, has security issues. And they do, so that’s something to bear in mind.

Now, as far as, how much to put into Bitcoin or whatever, certainly I’m free market, you decide for yourself, but I think Bitcoin’s got a long ways to go and I say that based on technical work. I mean, I looked at the chart before I did my presentation because I work pretty hard on these presentations as you know, and the volume was tremendously large in Bitcoin over the last couple months, which means it’s got a lot higher to go, there’s no question about it. And momentum feeds on momentum, especially when you’re making new highs, there is nothing more bullish to the market than a new high because everyone that owns it wants to hold it, because they don’t know how high is high, so there is very little that sells back. There will be some profit taking, but not much, because everyone is concerned with, “wow, I made this much percentage today, I wonder how much I’ll make tomorrow.” So, there’s not much selling pressure. And it will continue to go up. Very interesting market, from a couple places, the main one I would emphasize, which is a probably a different view point from many, is it is a competing currency to the present system and obviously it’s taking off rapidly.

Mike Gleason: You’ve always focused primarily on the silver market throughout your career and I know part of why you’re such a big believer in the white metal over the long run – and feel that it could really outperform gold and all other hard assets for that matter – is that fact that the moves can be so explosive because it’s such a small market, something like 1/10th the size of the gold market I believe. So, talk about that dynamic and then remind folks about the need to recognize that the moves can be pretty substantial in the silver market and not just to the down side but also to the up side.

David Morgan: Well, exactly. What I just outlined earlier was China’s buying more gold this year, and the last, and the smart money can move into gold, I mean, gold is a small market relative to the total financial markets. But they can protect themselves with gold. It’s impossible for really big money to move into the silver market, it’s just too small a market. And what will happen, is once gold breaks free, whatever that means, actually we’re at the cusp of breaking through a 6-year down trend, and it’s not going to be the next day, David. It’s going to be in a time frame, probably 2018 when we’re going to really see some momentum in both of these markets.

But if you look at the total asset base of the world, physical gold makes up about 1%, but silver makes up .02%, and there is a lot of people that at some point will want to turn some of their Bitcoin profits into hard metal. I’m not saying everyone, I’m saying some percentage, but there will be a move into the metals, and once the move into the metals starts in earnest, like we saw in 2011, you will see a lot of money, “money”, moving into the precious metals because it will be apparent at some point in time, that what I started this interview with, that the dollars demise is upon us and no one is going to trust it. It’s a confidence issue, it’s a trust issue. And what’s trusted more than anything else, even more than Bitcoin, at least history shows, is the precious metals.

So, there will be people that will be exchanging some of their Bitcoin profits for metal, there will be people on other currencies doing the same, there will be people that have huge bond holdings that will want to get out and move into the metal. And once gold starts moving to a level that a lot of people question if they can afford it or not, that will spill over into the silver market. But the silver market is so tiny, that it will take it much higher, because people really won’t care too much about the price, they’ll care about protection at that point. And that means, that “while I can afford silver it’s only, we’ll think of a number, $ 50, and gold is at $ 5000, its a 100 to 1 ratio, I can buy silver, I can afford it so I’m going to buy it.”

We will see, this is what happened in the 1980’s model, and this is what basically some Arabs and the Hunts taking a large position in silver early, before it made its big move. It was actually retail buying that took it to the height, it wasn’t Hunt, he was already positioned. It will be similar, I think, this time, except it’s a global based market, and we have the internet. Which means, that people that have never bought a silver or gold coin in their lives can almost instantly google how to buy silver, look it up and see how to do it and do it within a matter of a few minutes on the internet, so this is going to put huge pressure on the markets that they’ve never experienced in the past.

Mike Gleason: As an aside, we have been seeing a big uptake in the Bitcoin orders that we have been taking on our website MoneyMetals.com, we have accepted bitcoin for a good two years now and it’s really starting to actually move the needle, believe it or not.

Well, David as we begin to close here, the metals markets of course are a major focus for you, but we’ve also come to value your insights when it comes to broader issues such as, honest money and personal freedom.

Now, the Liberty Movement got an enormous boost in 2008, the financial crisis and Ron Paul’s rise to prominence were among the major catalysts. A whole lot of people were confronted with the problems in our governments and our monetary system. However, nearly 10 years have gone by since the financial crisis and precious little has been fixed, but people have gotten tired or complacent like we talked about at the top of the interview. Take an issue like Audit the Fed for instance, college kids chanted that slogan at rallies a few years back, but the establishment fended off the effort and the momentum appears to have faded there. Now, a good argument can be made about that effort being a waste of energy because beating Congress and Wall Street in their own rigged game is never going to happen, but what are your thoughts on the state of the Liberty Movement today. What efforts do you see working and where are the challenges?

David Morgan: Oh, well that’s a real tough one. First off, I’ll start from the bottom up. Number one is take care of your personal self and your family, I mean, you want to be healthy, wealthy, and wise to coin Ben Franklin. So, really change what you can, make sure that you’re eating right, make sure that you’re exercising, make sure that your health is number one. When I sign off the Morgan Report, from day one, I always sign it off “wishing you health above wealth.” There is a reason for that. Wisdom beyond knowledge. Having the knowledge of something doesn’t mean much unless you implement it. Being wise is meaning you know how the world works and working with it and that’s working with the truth. So that’s the bottom line, I think control what you can.

Moving up from there, what can you do. Well I’m more or less a pacifist, so I think for example, what Ted Butler did over all these years, to give a shout out to Ted, I mean he was instrumental and spearheaded this whole idea of what was going on in the CFTC and it’s been pretty thankless for him for a long time, yet he has maintained his position and asked people to help him write to the CFTC and investigate the manipulation of the silver market, and for years nothing really happened. But this little guy that is being held up as someone spoofing the market and then building a case against him, is probably due to some of the efforts that Ted did, in fact most recently.

So, you can make your voice heard, you certainly don’t want to give up. Congress does respond to the populous, it really, really does. So a phone call is much better than an email, and a written correspondence carries a lot more weight than an email and it doesn’t have to be a lengthy manifesto, it can just be simply, “I support freedom and you aren’t,” or something even better from my politically, perhaps questionable point of view, but it’s spot-on legally, is “you took an oath to defend the constitution from all enemies, foreign and domestic and I’m starting to question whether or not you are upholding that oath, write me back.” Something along those lines will wake them up, whether or not you’ll get a response I doubt it, there’s probably a computer form letter that has anything with the word Constitution in it that will probably pop out a form letter and send it back to you.

But regardless of that, you certainly can make it. And I’m for peaceful protest, the problem we have now is this “anarchy” with what’s going on from a certain political belief system, where burning things up and bashing windows, that doesn’t solve anything and it’s deconstructive, not constructive. Yet, there seems to be an element that actually relishes making that kind of a statement, which is very sad indeed, and it falls back on us as a society on what’s really being taught to the population at large and what are the moral values and what does make us great. What makes us great is we have high integrity, we were telling the truth. That’s what made America great, it wasn’t the financial system. If the financial system was honest, that helps a great deal. But as I’ve said many times, but probably bear repeating one more time Mike, as I close out, is there is a direct correlation between the integrity of the money system and the moral integrity of the population at large. The more the monetary system deteriorates, the more the moral society deteriorates with the population. They go hand in hand and we are witnessing that as we speak.

Mike Gleason: Very well put, we’ll leave it there. Well, as we wrap up here David, talk about some of the things you’re working on there at the Morgan Report, maybe mention the recent book and let people know how they can get their hands on that if they haven’t already, and anything else you want to leave our listeners with today.

David Morgan: Yeah, just go to the main website, TheMorganReport.com. If you’re already on the email list, you can go ahead and download that for free. The system is smart enough to know if we already have your email. And then if you’re interested in the book, just pull down the books tab on the website, you can order either book, The Silver Manifesto or Second Chance. And Mike I appreciate you mentioning that for me.

Mike Gleason: Well, outstanding insights as usual David, it’s wonderful stuff to hear and we’re very grateful for your time and for giving us your thoughts on these important matters. We appreciate talking to you today and look forward to catching up with you before long. Take care my friend.

David Morgan: Thank you very much.

Mike Gleason: Well, that will do it for this week. Thanks again to David Morgan, publisher of The Morgan Report. To follow David just visit TheMorganReport.com. We urge everyone at the very least to go ahead and sign up for the free e-mail list and start getting some of his commentary on a regular basis. And if you haven’t already, check out The Silver Manifesto and his new book, co-written with our mutual friend David Smith, titled Second Chance: How to Make and Keep Big Money During the Coming Gold and Silver Shock Wave. Both of which are available on MoneyMetals.com and other places where books are sold. Be sure to check those out.

And don’t forget to check back here next Friday for our first Market Wrap Podcast of 2018. Until then, this have been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend, and Happy New Year everyone.

Precious Metals News & Analysis – Gold News, Silver News




Alternative Money Mania Coming with New Inflationary Cycle; David Smith: Cryptos Bringing Broad Attention to All Dollar Alternatives

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

Coming up we’ll hear another terrific interview with David Smith of The Morgan Report and MoneyMetals.com columnist. David weighs in whether crypto-currencies and precious metals can coexist and talks about what we can glean from the current mania in the cyrptos as it relates to the upcoming mania in precious metals. Be sure to stick around for my conversation with David Smith, coming up after this weeks’ market update.

Now that Republicans have passed their tax cut package, investors are trying to position themselves in what they think will be the big winners as the new law takes effect next year.

Broadly speaking, the new law is a big win for U.S. corporations. Their tax rate will drop from 35% down to 21%. President Trump believes lower taxes on businesses will lead to more factories being built, more jobs being created, and stronger economic growth. He’s probably right – at least to some extent.

On Thursday, the Commerce Department announced GDP growth for the third quarter coming in at a robust 3.2%. Economists are now projecting close to 4% growth next year as the tax cut stimulus kicks in. Of course, with our government’s serial under-reporting of true inflation rates, these economic growth numbers are overstated in real terms.

But the conventional wisdom is that U.S. stocks will continue to charge ahead. This week saw some notable divergences develop in markets, however, and that could be foretelling major trend changes. Bonds, along with interest-rate-sensitive sectors such as real estate and utilities, sold off. Meanwhile, oil and natural resource stocks rallied strongly.

Investors appear to be reacting to the potential inflationary side effects of stronger economic growth that’s fueled by deficit-financed tax cuts. Yes, the tax cut package is expected to grow the deficits by as much as $ 1.5 trillion over the next decade.

Metals markets responded this week by moving higher. Copper prices rose 3% to near a 3-year high. Palladium ticked up to a 16-year high, while its sister metal platinum gained over 3% this week to pull out of its recent slump.

As for gold and silver, they are posting modest advances. Gold prices are up by 1.4% this week to trade at $ 1,273 and spot silver trades higher by 1.6% to come in at $ 16.36 an ounce as of this Friday morning recording.

If metals markets continue to show strength into 2018, they may well be signaling a larger inflationary trend set to take hold. Any significant increase in consumer price levels would be disastrous for the bond market – and spell trouble for some or even most sectors of the stock market.

Higher rates of inflation are bad news for most financial assets… but good news for most hard assets. Precious metals markets tend to thrive when the inflation rate is rising faster than interest rates – in other words, when interest rates are trending negative in real terms.

There is the potential threat of Federal Reserve rate hikes pushing rates positive in real terms. But you can bet President Trump’s incoming handpicked Fed chairman will back off at the first sign of serious trouble for the stock market. Trump is on record favoring higher asset values and a weaker dollar – which effectively means he favors higher rates of inflation.

The government itself has powerful incentives to promote price inflation. The IRS gets to tax the nominal gains on assets artificially boosted by inflation. And the Treasury Department gets to see the real value of its massive debt obligations steadily eroded.

But the biggest inflation trick the government employs is understating it. Using manipulated inflation gauges such as the Consumer Price Index enables the government to artificially hold down cost of living adjustments for Social Security. Understated inflation also generates stealth tax increases.

One “inflation tax” hazard for investors is winding up in higher tax brackets due to nominal increases in income. Wages or investment income that rise merely at pace with inflation can push taxpayers into higher rates of taxation.

The problem of “bracket creep” is supposed to be offset by annual increases in the bracket cut-off levels based on the Consumer Price Index. But a provision buried in the GOP tax bill passed by Congress this week changes the inflation gauge to “chained CPI.”

The difference between chained and unchained CPI is small in any given year. But according to the Joint Committee on Taxation, the obscure little change to “chained” will generate $ 30 billion in additional tax revenue through 2026. That’s because chained CPI usually comes in lower than regular CPI.

Inflation is an insidious threat to investors in more ways than one. And while gold and silver markets aren’t guaranteed to keep pace with inflation every single calendar year, the precious metals often massively outperform official inflation rates during periods when they flare up.

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

David Smith

Mike Gleason: It is my privilege now to welcome back David Smith, Senior Analyst at The Morgan Report and regular contributor to MoneyMetals.com. David, Merry Christmas, and thanks for joining us again. How are you?

David Smith: Very good Mike, and thank you and the very same to you and yours.

Mike Gleason: Well, as we start out here, David, let’s talk first about the setup as we finish up 2017 and move into the new year. There are a lot of similarities to last year, maybe the year before. We’ve had the Fed just announce a rate hike. The move was well telegraphed and all the selling in the metals happened prior to last week’s FOMC meeting. Open interest in the futures got pretty extended about a month ago, and as often happens in that scenario, the speculative long buyers were taken out to the wood shed and punished as the bullion banks cashed in on their shorts. Now we’re seeing a bit of a rally in the metals, so the situation in these regards is very similar to a year ago. What are you expecting from the metals markets in the weeks and months ahead? Are you looking for a rally to match last year’s?

David Smith: I really think that we could be looking at a very similar set up to 2016 where the metals actually bottomed in December, and the mining stocks tried to put a lower low in in mid-January. And I’ll never forget it, January 19th, and on an inter-day basis, they turned around, and then it was up and away for the metals and the miners for the next six months.

Then between then and now they gave back about 50% of it, which is what you’d expect on a retracement, and nobody can predict the future exactly, but I really feel pretty strongly that we’re going to see a very strong, right out of the box, in January, on the metals and miners, and it may even turn before the new year, but there’s so many technical indicators themselves, that when you add them all up, they become something larger, and so I think if a person is waiting to purchase their metal, they shouldn’t be waiting too much longer if they had the same view I do.

And not only that, as you know, when the demand starts ramping up pretty quickly, the premiums go up too, so you would have a double whammy against you, buying at a higher price and paying a higher premium if you wait until a lot of other people kind of get the same idea.

Mike Gleason: Yeah, certainly a buyers’ market right now, both in terms of low spot prices, and also the premiums, as you mentioned. And the last couple years, we have had pretty strong, right of the gate, moves there in the metals and the miners, and maybe 2018 is going to have the same thing.

Now in your most recent article that we published this week in MoneyMetals.com, you make the case for physical metals and cryptocurrencies to coexist. Now we think that is a vitally important idea right now as people are working through questions about what the advent of Bitcoin and other cryptocurrencies will mean for gold and silver. It would be pretty easy for people to look at price charts and leap to the conclusion that metals are quickly becoming irrelevant. The reality is that the times we live in are desperately calling for honest money and that both cryptocurrency and metals both have important roles to play. They have very different strengths and weaknesses, however, so talk for a minute, David, about how these two asset classes are likely to coexist.

David Smith: Well, the majority of the buying right now worldwide in gold and silver is in the Far East, and it’s been that way for a while… probably 65-70% of the volume. Things have tailed off a little bit in the United States, but elsewhere in the world, that’s not the case. In fact, Germany came out of nowhere to be, I think one of the, if not the largest country buyer of the last few months of gold. And a year ago, their volume was almost nothing, so Turkey is I think number 3 in the world now.

So these areas are all becoming more and more important demand pieces for gold, even as gold and silver look to be tailing off in terms of production. It’s getting more expensive to do it… the grades continue to drop in both gold and silver in many of these mines. So, we’re going to be seeing more demand and relatively less supply and that’s going to put upward pressure on the prices. And as you’ve mentioned before, we’re talking about gold and silver having been money for thousands of years.

They’re going to continue to occupy that stage, and not only that, a lot of the people that are in Bitcoin are actually buying metals with the Bitcoin, so the price has gone up and they get to buy more gold, and they get to buy more silver, before it drops again. And we’ve been seeing these huge, huge swings. It’s nothing to see bitcoin drop $ 5,000 in a couple days, and so far it’s been able to recoup most of those, but I mean, that’s a tremendous amount of volatility. It makes mining stocks look like they’re designed for widows and orphans compared to the cryptocurrencies right now.

Mike Gleason: Yeah, you are one of many gold bugs who has become interested in Bitcoin and cryptocurrencies, and it isn’t just about the price appreciation, though the action in those markets is definitely a spectacle, as you mentioned. You, like many of us, can see the potential for crypto to change the world. People are starting to imagine something like Bitcoin becoming a major world currency, and a very real threat to banks, including central banks. There are even some who think the current price explosion is signaling that this sea change is already upon us.

Now we happen to think that is a bit premature, Bitcoin for example, is not ready yet for prime time. The network is horrendously backlogged with transactions, taking hours to confirm. Fees have risen dramatically. It is nowhere near being able to serve as a major world currency. The network would need to handle tens of thousands of transactions a second, not the current limit of less than 20.

Now, there are solutions being proposed to these scaling problems, but it will be some time before anyone can say with confidence they will work. So, in the light of that, we’re wondering if price hasn’t already moved ahead of capability for Bitcoin. What are your thoughts there?

David Smith: It’s really possible, and the thing is, as you mentioned, the issues that Bitcoin has about the state of execution and scalability, but there are a number of other altcoins, you might say, that are trying to do something similar, and even Bitcoin Cash, which is a spinoff fork – since August of this year it has really been trading because it moves transactions much more quickly. And then of course, there is Monero and Litecoin and Dash, and so, there are a number of other similar coins that are doing similar things and there’s no way to know which one will end up becoming top dog. It might be something other than Bitcoin, but right now it has the first mover advantage.

But one of the things that I think that is very positive for gold and silver and people who believe in it, is that, Doug Casey made this argument, and I think it’s a very powerful one. He said, “The interest in Bitcoin is stimulating people to ask, ‘what is money?'” They hadn’t really been talking about that so much anymore, I mean, the hardcore gold bugs and silver bugs have always felt that way, but the average person on the street never asks themselves, “what is money, and what does it mean to have it deteriorate in value?” And so, the money in their pocket buys about 3 cents from what it did, say, as far back as 1960. So, this is going to, when people really ask that question, and they say, “what has been considered money for centuries and millennia?” They’re going to go “Oh, you know, it’s been gold and silver.” And so, I think it’s going to introduce a lot of new people to the precious metals that maybe hadn’t ever held it, so that is a salutary advantage of what’s going on with all the chaos that’s going on in Crypto Space, in my view.

Mike Gleason: We’ve had a huge influx of folks buying metals with Bitcoin this year, and especially over the last 2 or 3 months. And aside from being an outlet for people to spend their crypto profits, we are one of the only national dealers out there who also has the ability to pay people in crypto, whether it be Bitcoin, Litecoin, Etherium, etc, when customers are selling to us. So, we’re seeing a lot of coexistence between these two asset classes for sure, at least from our perspective as somewhat of a leader in terms of doing metals for crypto transactions both ways.

Now, another aspect that I wanted to touch on between the amazing developments that have taken place, and are currently taking place in the Crypto Space, and comparing it the potential for precious metals, is this incredible volatility that can accompany a mania phase for an asset class. Now that mania is in full force for the crypto world right now, but perhaps that day will be coming soon for metals as well. Talk about that for a minute because we could see a foreshadowing here of what might happen in gold and silver markets once people start to pile into physical ownership of the metals. Talk about what we might be able to glean from this crazy situation in Bitcoin that we’re in the midst of. How might a mania in the metals look similar and how might it look different?

David Smith: I think that we will see in a few years a mania in the metals, and it’ll be similar in terms of the velocity of money moving around and the spikes up and down, and the price of the metals. And the reason for that is because communication is so quick nowadays, it’s instantaneous, and that’s the reason people all over the world … This is the first time in world history where people all over the world are invested in an asset class at the same time, for many different reasons actually, but that’s why I think the people that were calling for a Bitcoin mania in January, when it was $ 900 and then all the way through the year, then when it was $ 2,000 or $ 3,000, $ 4,000, and they’ve been spectacularly wrong, and nobody knows. Maybe the top was registered a couple days ago, but it wouldn’t surprise me to see it go much higher, with big swings up and down at the same time.

But when people move into the metals in a big way, which they inevitably will, you’re going to see the same type of a thing when the supply/demand ratio gets out of kilter. And people are going to be striving to find metal at any price, at some point. And they’re going to be able to have that same level of communication around the globe and trying to do that, that people are doing now with their cryptocurrency. So, it does share that one element in common, plus human nature never really changes, does it?

Mike Gleason: No, certainly not, and obviously one of the issues that we’re dealing with right now is that with these low prices, the producers, especially the primary silver producers are not terribly profitable at these types of prices, so there’s not a lot of new exploration. Thus, supply is going to continue to dwindle. If we go with the data that tells us that maybe 1-2% of Americans actually own an ounce of precious metal.

If, all of a sudden, that doubles during a mania phase. It takes a while for that supply to come online, as you well know, studying these miners. It’s not a switch that you can just flip, and automatically have a bunch of new ounces being pulled out of the ground. It takes years in many situations to get a mine up and running… go after those exploration projects and so forth. So that really could potentially drive that mania and make it go even quicker than we were expecting if you truly can’t get your hands on the metals. Speak to that.

David Smith: That’s really true because they’re not making any really large discoveries anymore. The article I wrote last month, quoting Pierre Lassonde. He just said, “We’re not finding anymore 15 million ounce gold discoveries and we’re finding just a few 3 million ouncers.” And so all the companies that are producing today, regardless of the metal they’re producing, they are wasting assets. Unless they find ways to bring in more ore on stream, they are producing ounces that aren’t going to be replaced and then that means the value of their company goes down, and what they can produce. And so, this is going to be something that’s going to weigh on the whole industry big time going forward. It’s just not very likely that you’re going to see any more mega-discoveries, like were fairly common 30 years ago.

Mike Gleason: Sticking with the mining industry here for a moment, what is your intel showing in terms of the state of the industry? How are they doing? Are you expecting more consolidation as the prices remain suppressed here? What’s the situation with the mining industry?

David Smith: A number of the better run companies are doing reasonably well. They’re producing at a reasonably good profit. There’s going to be more consolidation in the industry because the medium-sized ones are going to get swallowed up by the larger ones. It’s a lot cheaper for a big company to go out and buy a project that’s already been permitted and maybe even having production going on, than to go through the permitting process. I visited a company in BC this year that took almost 20 years to get through all the environmental permits and the agreements with First Nations, and, not to mention, to keep delineated enough of a resource to turn it into reserves.

And so, it’s just a whole lot cheaper to buy a company that’s already figured it rather than to go out and find it on your own. And as that happens of course, that’s not adding anything new to the total amount of gold and silver that’s available to be produced. It’s just shuffling the card deck, so to speak. So, it isn’t like they’re buying a new project that’s never been put into production before. Some of that’s going on, but a lot of it’s already buying companies that are already in the pipeline and then they just add that mill or that mine to what they’re already doing.

Mike Gleason: Getting back to your article, you lay out all the reasons why it’s important to stay the course and not let the noise get in the way of your investment plan. Recap that a bit here for our listeners and talk about the dangers that the average investor faces these days given the over saturation of information that’s constantly bombarding us with the 24/7 news cycles and all the talking heads constantly giving their opinions on anything and everything in the investment world.

I mean, in terms of precious metals, the fundamentals that made it a wise investment a few years ago, and the very things that probably peaked our interest about owning it as a hedge and as insurance against financial turmoil, is still just as relevant today as ever despite the price kind of languishing, so you have to just phase out all of that noise and resist getting tempted by alternatives or swayed by this opinion or that opinion, don’t you David?

David Smith: You really do because it’s hard for all of us to maintain our bearings when all this information’s coming in, and we have to look at each piece of it and try to determine if that is valid or if that changes our thesis. And the thing is, as you said, all the reasons for holding the metals are as valid as they ever were, in fact if not more so. And the fact that the metals haven’t gone up sharply as we’re talking doesn’t mean that they’re invalid, it just means that it’s taken a little longer than we expected.

I look at the uranium market as a classic example. This thing went on, people said, a year and a half ago, “Well, we’ve never seen a market that’s been in the bear markets for six years, the odds that it’s going to turn around very quickly.” Well, it took another 18 months, and even now it’s still just getting started. But the thing is, once it makes that turn, and once the smart money is starting to position itself, and once a certain amount of the public get on to the idea, you can have a very, very fast move upward, just like we had in 2016. And it’s very difficult to get on, and on that move, it caught so many people by surprise, both in the physical space and also the mining shares space, that the vast majority not only didn’t get on – because they were waiting for a retracement that never really came – but they also sometimes got out too quickly. They thought “Oh, well, this’ll be a couple months and it’ll be over, just like it has been the last four years.” Well, it didn’t turn out that way. It went for seven months with hardly any kind of a correction.

And these prices today, the better companies and, of course, the metals themselves, are still above where they were when that turn was made, so if you wait a little longer, you’re going to find yourself buying at prices higher than they were when they were in 2016. So, if a person believes in it, they should start accumulating in tranches, or buying into weakness, or buying on a dollar-cost averaging, or whenever they have the extra money to budget for, rather than trying to pick the exact low. Try to buy 30 cents lower and then end up paying a 40 cent premium, that you wouldn’t have had to pay then, plus maybe 40 cents higher… the old “penny wise, pound foolish” theorem.

Mike Gleason: Yeah, certainly letting the emotions get the best of us in the investment world has taken down many people over time. Well finally, David, as we begin to wrap up here, maybe talk about some of the key support or resistance levels you’re watching here in the metals, in terms of the charts and so forth. And then anything else that you’re focused on in the metals or financial world that we maybe haven’t hit on yet as we wrap up the year and look forward to 2018.

David Smith: Well, I think in silver, we want to see silver get above $ 17 and of course, it would be very, very positive psychologically and chart-wise to get above $ 20. And then you have a real solid base start to be built there. That would be very important.

In terms of gold, getting well above $ 1,300 and staying there, $ 1,325, $ 1,350. There are a lot of respected economists and analysts that feel that we’ll see $ 1,450 to $ 1,500 gold this (next) year, even without some major issues.

So, I think that the risk/reward is really turning in the favor of a cautious investor who decides on how much to put in, and then does it, rather than trying to wait for even more ducks to line up because Mr. Market seldom waits until everybody understands the story before it moves. And by the time you feel comfortable about it, it’s going to probably be moved quite a bit a ways away from where we are talking about it today.

Mike Gleason: Yeah, very well put, obviously we’re seeing a lot of this type of situation play out in the crypto world. A lot of people I’m sure are kicking themselves for not having gotten into Bitcoin $ 10,000-$ 15,000 ago on the price charts, but we could be looking at something very similar in metals. If you’ve got a conviction and you know that precious metals are the place that you need to be long-term to protect yourself, by all means, go by that conviction and make your moves.

Well, David, thanks so much for your time today and for enlightening us with your wonderful insights once again. I’ve certainly enjoyed having you on this past year, and wish you and your family a very Merry Christmas, and I look forward to catching up with you in the new year. Take care, my friend.

David Smith: Okay, take care, Mike, and I’ve enjoyed speaking with you too.

Mike Gleason: Well, that will do it for this week, thanks again to David Smith, Senior Analyst at The Morgan Report and regular columnist for MoneyMetals.com, and the co-author, along with David Morgan of the book, “Second Chance: How to Make and Keep Big Money During the Coming Gold and Silver Shock Wave”, which is available at MoneyMetals.com and Amazon. Pick up a copy today.

And check back next Friday for our next Market Wrap Podcast. Until then, this has been Mike Gleason, with Money Metals Exchange. Thanks for listening and Merry Christmas everyone.

Precious Metals News & Analysis – Gold News, Silver News




Money Metals Exchange Is Also Your Crypto/Metals HQ

Money Metals Exchange began accepting Bitcoin payments for gold and silver bullion nearly 3 years ago, putting us among the very first in our industry to do so.

Today, we are announcing expanded services – both when buying and selling precious metals – using several crypto-currencies.

We believe honest money is core to liberating people and protecting their savings. History is clear as to how the game of unrestrained government borrowing, printing, and spending will end. The holders of the world’s fiat currencies will wind up holding the bag.

Crypto-Currencies

There can be no doubt that tangible, off-the-grid, gold and silver – which feature zero counterparty risk – will have a key role to play in the future, just as they have in the past. It may well be that crypto-currencies will also have a role to play.

Crypto-currencies provide a method of sending payments anywhere in the world, without permission and with little cost. It is possible to do so securely and privately, without relying upon bankers as middlemen.

If Bitcoin, or one or more of the alternatives, can solve scaling problems, it could be a revolution in which individuals and liberty are the victors.

Our clients have long been able to make payment for metals using Bitcoin at MoneyMetals.com, as noted above. But that is just the start. Very soon we will be able to accept online payments in Bitcoin Cash and other major crypto-currencies.

But we can already do a much larger variety of crypto-currency transactions with clients who call us rather than order online.

Transact with Money Metals Using Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, and More!

It is possible now for those doing transactions by phone to make payment or receive payments using crypto-currencies other than Bitcoin. By arrangement over the phone (1-800-800-1865), we can transact in Ethereum, Bitcoin Cash, Ripple, and Litecoin. (We may also engage in transactions with other coins and tokens if liquidity is sufficient, please just ask.)

People who wish to make purchases larger than our online maximum (meaning in excess of $ 100,000) can also call for help with that. We can generally offer lower premiums on the metals and the process is easy.

Aside from our ability to accept payment in other crypto-currencies besides Bitcoin, what further sets Money Metals Exchange apart from other merchants in our space is our ability to make payments TO clients using crypto-currency. We can purchase your metals and send you the digital coin of your choice as payment.

Simply email or call 1-800-800-1865 to let us know you will be sending bullion you wish to exchange. When we receive the metal, we will contact you to lock the exchange rate and get the wallet address for sending the payment. Fees for this service are currently 3%, or less, and we can deliver a wide range of tokens and coins.

Money Metals is also a great platform for crypto-currency speculators who want to use precious metals as a safe haven. Our customers can swap Bitcoin (and other coins) for gold and silver to be stored by Money Metals Depository. Storing with us makes it quicker to swap back into crypto-currency when the time comes, and avoid the cost and hassle associated with shipping metals.

Crypto-Currencies

We have seen interest in this program grow significantly in recent weeks. Some crypto-currency holders seek to take profits after the extraordinary move higher and reallocate funds to precious metals.

Others plan to head to the sidelines for a period of time while questions and concerns over Bitcoin scaling and the health of some major exchanges, such as Bitfinex, get resolved.

For many, parking capital in U.S. dollars is not an attractive option. We make it easy to park in physical gold and silver instead. Clients can do that with confidence. Money Metals Depository provides fully segregated (and independently audited) storage in a state-of-the-art Class III vaulting facility located in Idaho. The cost of storage starts at just $ 96 per year.

A few metals investors are excited by what is happening in the crypto sphere and are looking to join in. Others want nothing to do with digital currencies or are looking to get out. Regardless of what you are planning to do on the crypto-currency or hard currency front, Money Metals can help you do it!

Precious Metals News & Analysis – Gold News, Silver News




For Clues On The Economy, Follow The Money

“There is nothing new on Wall Street or in stock speculation. What has happened in
the past will happen again, and again, and again. This is because human nature does
not change, and it is human emotion, solidly built into human nature, that always
gets in the way of human intelligence. Of this I am sure.” –Jesse Livermore

The profitability of lending/investing money is a function of both the rate of return on the money loaned/invested and the return (payback) of the money. The historically low interest rates are squeezing lenders by driving the rate of return on the loan toward zero (note: “lenders” can be banks or non-bank lenders, like pension funds investing in bonds).

As the margin on lending declines, lenders, begin to take higher risks. Eventually, the degree of risk accepted by lenders is not offset by the expected return on the loan – i.e. the probability of partial to total loss of capital is not offset by a corresponding rate of interest that compensates for the risk of loss. As default rates increase, the loss of capital causes the rate of return from lending to go negative. Lenders then stop lending and the system seizes up. This is what occurred, basically, in 2008.

This graphic shows illustrates this idea of lenders pulling away from lending:

The graph above from the St Louis Fed shows the year over year percentage change in commercial/industrial loans on a monthly basis from commercial banks from 1998 to present. I have maintained that real economic growth since the initial boost provided by QE has been contracting for several years. As you can see, the rate of growth in lending to businesses has been declining since 2012. The data in the chart above is through October and it appears like it might go negative, which would mean that commercial lending is contracting. This is despite all of the blaring media propaganda about how great the economy is performing.

The decline in lending is a function of both lenders pulling back from the market, per reports about credit conditions in the bank loan market tightening, and a decline in the demand for loans from the private sector. Both are indicative of declining economic activity.

This thesis is reinforced with this graphic:

The chart above shows the year over year percentage change in residential construction spending (red line) and total construction (blue line). As you can see, the growth in construction spending has been decelerating since January 2014. Again, with all of the media hype about the housing market, the declining rate of residential construction suggests that the the demand side of the equation is fading.

The promoters of economic propaganda have become sloppy. It’s become quite easy to invalidate Government economic reports using real world data. Using the Government-calculated unemployment rate, the economic shills constantly express concern about a “tight labor market.” Earlier this week, Moody’s chief economist Mark Zandi asserted that (after the release of the phony ADP employment data) the “job market feels like it might overheat.” The problem with this storyline is that it is easy to refute:

The graph above is from the Bureau of Labor Statistics productivity and costs report. The blue line shows unit labor costs. As you can see, unit labor costs have been decelerating rapidly since 2012. In fact, labor costs declined the last two months. The last time labor costs declined two months in a row was November 2013.

See the problem? If labor markets were “tight” or in danger of “overheating,” labor costs would be soaring, not falling. This is why I say the shills are getting sloppy with their use of manipulated Government economic reports. It’s too easy to find data that refutes the propaganda. I remember Mark Zandi from my junk bond trading days in New York. He was an “economist” for a fixed income credit analysis service (I can’t remember the name). I thought his analytic work was questionable at best back then. I continue to believe his analysis is highly flawed now. Recall, Moody’s is the rating agency that had Enron rated triple-A until shortly before it collapsed. That says it all…

Speaking of the labor market, I wanted to toss in a few comments about November’s employment report. The BLS headline report on Friday claims that 255k jobs were created in November. However, not reported in any part of the financial media coverage, “seasonal-adjustment gimmicks bloated headline payroll gains, where unadjusted payrolls were revised lower but adjusted levels revised higher” (John Williams’ Shadowstats.com).

The point here is that, in all likelihood, most of the payroll gains in the BLS report were a product of the mysterious “seasonal adjustment” model used. Per the BLS report, another 35k were removed from the labor force as defined. Recall that anyone who has not been looking for a job in the previous four weeks is removed from the labor force statistic. Furthermore, and never mentioned by the media/Wall St., the BLS report shows the number unemployed increased by 90k in November.

I don’t know when the stock market bubble will lose energy and collapse.  What I do know is that each time the U.S. stock market disconnects from reality, there’s a period of “it’s different this time,” followed by the crash that blind-sides all of the so-called “experts” – most of whom like Dennis Gartman do not have their own money in the stock market (it’s well-known that Jeremy Siegel invests only in Treasuries).  The retail lemmings who think they’ll be able to get out before the crash will see their accounts flattened like a Japanese nuclear power plant.

Most of the commentary above is from my Short Seller’s Journal, in which I present stocks  to short every week (along with options suggestions).  You can learn more about this newsletter here:   Short Seller’s Journal subscription info.

I’ve been a subscriber for a good part of the year and really enjoy my Sunday evening read. Thank you – received sent this morning from “William”

Investment Research Dynamics




You Have to Follow the Money

John Del Vecchio really is a nice guy, I promise.

But he doesn’t smile a lot.

Maybe it’s because he grew up in upstate New York, where you can go weeks in winter without seeing the sun… or maybe it comes from the years he spent working as a forensic accountant and as a professional short seller.

But John definitely has a serious, no-nonsense demeanor about him.

And let me tell you from experience, you don’t want to be on the opposite side of a trade as him.

This seems almost ridiculous now, given the company’s dismal performance, but many moons ago I was bullish on International Business Machines (NYSE: IBM). The stock looked cheap on paper and paid a high and growing dividend. And, perhaps best of all, the legendary Warren Buffett had recently taken a large stake in the company. It looked like a can’t-lose investment.

Until I mentioned it to John…

John spent a good 20 minutes dissecting my investment thesis point by point… until there was nothing left.

“They’re cooking their books, Charles,” John told me bluntly. “And there’s no cash flow to support all those dividend hikes.”

I feebly protested, mumbling something about recurring revenue streams and long-term service contracts, before John raised his hand to silence me.

“Sure, they’re growing their earnings per share, but there is no actual cash flow to support it,” he said. “They’re borrowing money and using it to reduce their shares outstanding. It’s financial engineering… and one of the oldest tricks in the book.”

He paused for effect.

“You have to follow the money, Charles.”

John walked me through the numbers, and I had no choice but to acknowledge he was right. And it’s good that I did, because IBM is down by about a third since we had that conversation.

In the end, it was Amazon.com that killed IBM.

Amazon’s cloud platform, AWS, was vastly cheaper and more practical than IBM’s traditional business services. It was only a matter of time until Amazon knocked IBM off its pedestal.

In retrospect, it seems so obvious that IBM was about to get obliterated by Amazon. But none of us – not even Warren Buffett – saw it coming.

At the time John warned me to steer clear of IBM, he knew next to nothing about Amazon’s AWS or the competitive challenge it faced for IBM.

But by digging into the numbers as he does as Dent Research’s in-house forensic accountant, he could tell that the company was in trouble and that it was using aggressive accounting to cover it up.

Something was wrong. The “why” wouldn’t be obvious for another few years, but by then it would be too late for the IBM bulls.

John has spent most of his career hunting down companies using aggressive accounting to bamboozle their investors. And he’s good at it, or he wouldn’t have survived this long as a professional short seller.

But here’s where it gets fun.

The same tools that can be used to identify bad companies with low-quality earnings can be turned around to find good companies with high-quality earnings.

And, as you know, that’s exactly what John does in Hidden Profits.

He uses six handpicked factors for scoring and ranking stocks: cash flow quality, revenue recognition, earnings quality, shareholder yield, earnings surprise, and valuation.

In plain English, he’s looking for underpriced companies with good management and honest bookkeeping. These are profitable gems, hiding in plain sight.

Companies that use aggressive accounting tactics to puff up their earnings eventually have to face the music. At some point, they run out of tricks and have to come clean. And when they do, it catches most investors by surprise and leads to a bloodbath in the stock price.

But companies using clean, conservative accounting are a lot more likely to surprise with better-than-expected earnings.

Just as John was able to detect the risks to IBM long before they made the news, he’s also able to find promising companies long before they ever pop on the radar of Wall Street analysts.

Company policy doesn’t allow me to personally own stocks that I recommend to readers. But I can tell you that I have bought many of the stocks John recommends, and I shorted Big Blue.

So here’s some good news for you: On Tuesday, John’s hosting a special video broadcast that highlights several new profit opportunities.  It’s free to attend, but you must sign up here. I know I’m not going to miss it.

charles sizemore helicopter money

Charles Sizemore
Editor, Peak Income

The post You Have to Follow the Money appeared first on Economy and Markets.

Charles Sizemore – Economy and Markets ()




Please Contribute To The 2017 Michael Snyder For Congress Money Bomb

Wouldn’t it be great if Congress was absolutely packed with strong constitutional conservatives that consistently fought for true conservative values?  It has been said that our government is a reflection of who we are as a people, and the only way that we are going to take our government back is if we fight for it.  I have talked to so many conservatives that are sick and tired of being betrayed by “Republicans in name only” over and over again, but the only way that we are going to break this cycle is if good people start running and if we get behind them.  Personally, I am in a very tight race in Idaho’s first congressional district, and the only way that I can win is if it is a total team effort.  There is no way that I can do this alone, and fortunately we have had some absolutely extraordinary people get involved in the campaign as volunteers.  But if you don’t have the time to serve as a volunteer, you can still contribute to the campaign in other ways.  Today we are launching our “2016 Money Bomb”, and the deadline for participating is November 30th.  If you would like to donate, you can do so here

https://www.michaelsnyderforcongress.com/contribute.html

Our first tier goal for the money bomb is $ 4,500, which will help us cover the cost of desperately needed campaign materials.  The good news is that there is an overwhelming demand for campaign materials all over the district, but now we are running low on almost everything.  Our county chairs are telling us that they need more signs, more bumper stickers and more brochures, and we are working hard to get them everything that they need.

Our second tier goal for the money bomb is $ 15,000, which will help us get our message directly to the voters.  Thanks to cutting edge voter outreach technology, we can reach voters much more cheaply than my opponents can.  For just $ 17, we can get our message out to 200 voters or more, and every vote is going to count in this very tight race.  Our goal is 50,000 votes, and if we reach that goal we are definitely going to win this election.

Our third tier goal for the money bomb is $ 25,000, and if we hit that goal we are going to be able to create an unbelievable amount of momentum for our campaign.  None of my five opponents has raised very much money yet, and if we can raise $ 25,000 during our “2016 Money Bomb”, that is going to be a gamechanger.

One of the things that we need resources for is to create higher quality videos.  If you want to get an idea of what we have done so far, check out this YouTube video

This kind of raw video is really resonating with voters, but we can do so much better.  We just need help to get there.

Previously, I never understood why politicians seemed to be fundraising all the time.  I always figured that they should be spending their time in more productive ways, but now that I am immersed in this campaign I understand.  In order to turn this country around, we have got to get our message out to the voters, and the only way that we can get our message out to the voters is if we have the resources to do it.

A lot of people out there don’t understand that we don’t just vote at the voting box.  We vote with our dollars too, and right now Democrats and establishment Republicans are giving millions upon millions of dollars to their candidates for the 2018 elections.

If we are going to get back to the U.S. Constitution and restore our liberties and freedoms, we have got to fight fire with fire.  We can’t sit back and wait for someone else to take action, because that is what way too many true conservatives have been doing for decades.  The other side wants us to believe that it is hopeless and that we can never change the system.  But I believe that we can make dramatic changes if we will just work together.

If every one of my readers donated just $ 10 to the campaign, we would raise more money than all of the other candidates combined and it would be virtually impossible for any of them to win.

Most of us don’t think twice about spending ten dollars at a fast food place for lunch, and so why wouldn’t we invest at least that much in saving the country?

This is our campaign, because we are all in this together.  Everyone that has volunteered, donated or contributed in some other way is invested in this campaign, and we need more help.  We are literally in a struggle for what the future of this country is going to look like for our children and our grandchildren, and if you would like to join our efforts you can do so right here…

https://www.michaelsnyderforcongress.com/contribute.html

I am going to keep fighting for America as hard as I can every single day, and I am praying for more people to rally to our cause.  If you haven’t already done so, please read over the following 22 points and prayerfully consider getting involved in our campaign…

#1 A Pro-Trump Christian Conservative – Michael is the most conservative candidate in this race, and he is proud to stand with President Trump.

#2 It’s Time To Drain The Swamp – The same rules that apply to the rest of us should also apply to Congress, and Michael is going to fight hard to clean up the corruption in Washington.

#3 Every RINO Must Go – Way too many Republicans have been fighting Trump’s agenda and acting like Democrats. It is time to hold them accountable, and that means every ‘Republican in name only’ needs to go.

#4 100% Pro-Life – No money for Planned Parenthood ever. Nearly 60 million babies have been murdered since 1973, and Michael is making an unbreakable pledge to vote against any bill that funds Planned Parenthood 100% of the time.

#5 100% Pro-Gun – The Constitution says that the right of the people to keep and bear arms shall not be infringed. Michael believes that every American has a constitutional right to carry a gun, and he will never back down from defending the Second Amendment even a single inch.

#6 Abolish The IRS & The Income Tax – We didn’t have an income tax from 1872 to 1913, and that was the greatest period of economic growth in U.S. history. As we fight a long-term battle to abolish the income tax, in the short-term we can at least go to a flat tax or a fair tax, both of which would be far superior to what we have now.

#7 Abolish The Federal Reserve – Since the Fed was created in 1913, we have had 18 recessions, the value of the U.S. dollar has fallen by about 98 percent, and the U.S. national debt has gotten more than 6000 times larger. Abolishing this debt-based system is one of the keys to a bright economic future for America.

#8 Getting Federal Bureaucrats Off Our Backs – Michael will work to get the federal government off of the backs of our farmers, our loggers, our miners, our ranchers and our small business owners.

#9 Local Control Of Education – It is time to get the federal government out of the education business. Michael wants to abolish Common Core and the Department of Education, and he wants control over education to be as close to the local level as possible.

#10 Shut Down Big Brother Spying – Government agencies have been conducting unconstitutional surveillance of American citizens for decades, and that needs to stop now.

#11 True Limited Government – President Trump has proposed shutting down more than 60 different government programs and agencies. That would be a good start. Instead of asking which government agencies we should close, we should be asking which government agencies really need to remain open.

#12 100% Repeal Of Obamacare – Rapidly rising health insurance premiums are financially crippling Idaho families. Republicans in Congress have fumbled the ball, and we must repeal Obamacare immediately.

#13 Build The Wall – We need to make sure that everyone comes into this country through the front door. We must end illegal immigration, and so Michael supports President Trump’s call to build a wall on the southern border.

#14 Supporting Our Veterans – Michael’s father is a vet, and Michael will work passionately to make sure that our veterans receive the respect, care and support that they deserve.

#15 Fighting Islamic Terror – Michael fully supports the fight against ISIS, and he will push for legislation that would give local communities all over America the option to say no to refugees from terrorist hotbeds.

#16 Stopping Reckless Government Spending – We are 20 trillion dollars in debt and we continue to steal more than 100 million dollars from future generations every single hour of every single day.

#17 Bringing Jobs Back To America – The U.S. has lost more than 70,000 factories since China joined the WTO in 2001. Our formerly great manufacturing cities now look like war zones, and we desperately need to start making things in this country once again.

#18 Resisting The Globalists – We must strongly fight all attempts by the globalists to erode American sovereignty.

#19 Supporting States Rights – It is almost as if the 10th Amendment doesn’t even exist today. If Michael is elected, this is what his message to the feds will be: ‘Hand over the keys and get out of Idaho’.

#20 Removing The Wolves – Under Bill Clinton, Canadian gray wolves were brought to Idaho. These wolves travel in packs and are killing machines. Michael is 100% committed to removing these wolves from our state.

#21 Holding Judges Accountable – Federal judges that disregard the U.S. Constitution and that choose to legislate from the bench should be subject to impeachment.

#22 An Unashamed Christian – Michael is not ashamed to say that he is a Bible-believing Christian, and if we truly want to make America great again we need to return to the values and principles that this nation was founded upon.

Is this the kind of platform that you can get behind?

If so, please contribute to our efforts today…

https://www.michaelsnyderforcongress.com/contribute.html

If I win, this is only going to be just the beginning.  We have already been talking about a national effort to help true conservative candidates win races all around the country.  It won’t be easy, but I believe that if we all work together that we can take our government back.

But first we need to win this election, and right now it is a totally wide open race.  If you would like to help, here are three immediate ways that you can do so…

1. We need an army of fundraisers – We need people all across America to help us bring in resources for this campaign.  Even if you just want to help with mailings, we can get you started right away.  Just contact us on our volunteer page and we will guide you through exactly what needs to be done.

2. We need an army of “social media warriors” – Social media is a key battleground for this campaign, and we need a whole host of people from all over the nation to get involved.  If you only have a small amount of time, you can greatly help us by liking, sharing and commenting on the material on our official Facebook campaign page on a daily basis.  Beyond that, there is so much to be done, and if you want to get involved please contact us.

3. We need more financial contributors – Democrats tend to recruit volunteers easily because many of their supporters tend to have a lot of “free time” on their hands.  But conservatives are usually hard at work trying to make a living, and so many of our supporters simply don’t have that much time to put into political campaigns.  If you can’t volunteer, you can still be a huge part of what we are doing by becoming a donor

https://www.michaelsnyderforcongress.com/contribute.html

I want to thank everyone out there that has already been praying, volunteering and contributing.  This is a total team effort, and I am so thankful that this campaign has brought us all together.

We now have less than 6 months to go before election day on May 15th, and it is going to be a mad sprint to the finish line.  If everybody gets involved, there is no way that we can lose, and so I am asking for your help today.

In Liberty,

Michael Snyder

The Economic Collapse




There is No House Money… Only YOUR Money

Have you seen those Voya Financial commercials? The ones featuring cartoon, origami rabbits – one orange and one green?

It opens with the orange rabbit explaining to a man,

“I’m Vern, the orange-money retirement rabbit. I’m the money you save for retirement…”

“Who’s he?” replies the man, pointing to the green origami rabbit.

The orange rabbit answers,

“He’s green money, for spending money today… you know, paying bills, maybe a little online shopping.”

Now, here’s the thing…

Both the “orange rabbit” and the “green rabbit” are identical. They’re both $ 1 bills.

But Voya wants you to think about them as if they’re completely different animals!

This form of psychological differentiation, or compartmentalization, may be useful in Voya’s goal of getting clients to save for retirement. But when it comes to being a disciplined investor, this line of thinking can be outright dangerous.

Consider the term “house’s money”…

Casino regulars know what I’m talking about when I say “house’s money.”

Whereas “my money” is the money I walked into the casino with, the “house’s money” is the “extra” money I’ve won from the casino that night.

Before I go on, let me say that I’ve never stepped foot in a casino. And while analogies between the two can sometimes be made, good investing is not gambling!] Back to my point…

Many people (mistakenly) think that the “house’s money” is somehow different from “my money” – as if, like in that Voya commercial, one is green and one is orange.

The thing is… it’s not!

And here’s why I believe that…

For one, the house’s money can just as easily be your money as your money is. All you have to do to make that so is walk away from the table.

With such a simple act separating the house’s money and your money, how can they be different things?

More importantly, though, I believe whole-heartedly that it hurts just as badly to lose the house’s money as it does to lose your money.

How many times have you accrued a hefty open profit… and then mentally spent that money on something? You’ve thought, “Great! I can buy that <insert expensive, luxury item> now with the $ 50k I’ve made so far this month!”

And then, after suffering a hefty giveback of those open profits – aka, the house’s money – you’ve decided you’d better hold off.

I’ve worked with enough investors to know it usually works this way. Human nature leads us to mentally spend our profits, even before we’ve locked them in. Then, when the house takes some or all of those profits back… it hurts!

That’s why I think there’s no such thing as the house’s money.

It’s all your money!

This truth can be psychologically frustrating, and economically destructive, for many investors.

Some investors like to play fast and loose with the so-called house’s money. They may reckon that it wasn’t their money to begin with, so it’s fine if they risk too much and lose it all.

Other investors become psychologically attached to the house’s money, causing them to mentally spend it, and worry excessively about losing it. They’re too conservative with the house’s money, often locking in profits too early, thereby leaving even more money on the table.

Truly, it’s a tricky balance to strike… made worse by the false idea that the “house’s money” is somehow different from your money. Again, it’s not!

I shared this concept recently with my 10X Profits readers, as part of my commitment to turn them into disciplined investing machines!

The solution to seeing the house’s money as “play money,” and doing foolish things with it, involves detaching yourself, emotionally, from the profits you’ve accrued on open positions.

That’s easier said than done, I realize.

So I gave my disciplined 10X’ers two tactics toward this goal.

The first one is simple: check your account balance just once a month.

If you believe, like me, that each time you check your account balance and open positions presents one opportunity to second-guess your strategy and do something stupid… then you’ll agree that checking your positions every day, versus once a month, only sets you up for 22-times more temptation.

If you’re following a systematic strategy, like 10X Profits, you don’t need to make decisions every day. So you shouldn’t be tempting yourself to “check and fiddle” every day!

Keeping tabs only occasionally means you won’t fall victim to the emotional rollercoaster of watching the so-called house’s money swing up and down.

The second tactic is also simple: prepare to “give back” some of the house’s money.

I think education and anticipation is key to keeping a cool head in turbulent markets. If you’ve done your research and prepared yourself for negative scenarios, it’s much easier to stay the course when things get dicey.

When you expect you’ll have to give back some of the house’s money, some of the time, you won’t be as shocked or concerned when it actually happens. You’ll know it’s a “normal” function of investing… and nothing to worry about.

The bottom line is…

It’s psychologically challenging to give back open profits. It’s psychologically tempting to override your strategy when you check your account balance too often.

And that’s why you need an objective, systematic trading strategy… like my 10X Profits

Adam O’Dell
Editor, 10X Profits
Follow me on Twitter @InvestWithAdam

The post There is No House Money… Only YOUR Money appeared first on Economy and Markets.

Adam O’Dell – Economy and Markets ()




Bill Gates, Jeff Bezos And Warren Buffett Have More Money Than The Poorest 50% Of The U.S. Population Combined

The problem is not that we have a few people that are rich – the problem is that we have so many that are poor.  As you will see below, three extremely wealthy individuals have as much money as the poorest half of the nation combined.  In a free market capitalist society, there are always going to be some that do better than others, and there is nothing wrong with that.  But in our society today, there are so few that are doing well.  At this point a majority of all Americans are living paycheck to paycheck, and “one in five households have zero or negative net worth”

In the United States, the 400 richest individuals now own more wealth than the bottom 64 percent of the population and the three richest own more wealth than the bottom 50 percent, while pervasive poverty means one in five households have zero or negative net worth.

Those are just several of the striking findings of Billionaire Bonanza 2017, a new report (pdf) published Wednesday by the Institute for Policy Studies (IPS) that explores in detail the speed with which the U.S. is becoming “a hereditary aristocracy of wealth and power.”

That means that if you have no debt and a single dime in your pockets, you have more wealth than one-fifth of the entire country.

Okay, so let’s talk about the three men that have more wealth than the poorest 50 percent of the U.S. population combined.  Those three men are Bill Gates, Jeff Bezos of Amazon.com, and Warren Buffett.  I don’t want to take anything away from what those three have accomplished, because we need more risk takers and entrepreneurs.

Sadly, the level of small business creation has fallen in every presidential administration going all the way back to George H.W. Bush, and the percentage of Americans that are self-employed is hovering near all-time record lows.

As a nation, we desperately need to return to a culture that encourages free market capitalist thinking.  We want young men and women to create, invent, innovate and start new ventures.  But instead, today our culture encourages young people to become dependent on the government and on the big corporations, and as a result the middle class is evaporating.

As I discussed above, at this point 20 percent of all U.S. households have “either zero or negative wealth”

The rise at the wealthiest end of society comes as one in five US households live in what the report’s authors call the “underwater nation”, with either zero or negative wealth. Inequality is even more stark among minorities. Three in 10 black households and 27% of Latino ones have zero or negative wealth, compared with 14% of white families.

In recent years, unprecedented intervention by global central banks has created an absolutely enormous stock market bubble, but the real economy has continued to struggle.

Just look at what is happening to Sears.  This week they announced that they lost between $ 525 million and $ 595 million during the 3rd quarter of 2017.

How in the world do you do that?

If they had their employees doing nothing all day but flushing one dollar bills down the toilet, I still don’t think that they could lose that much money in three months.

Sears is going to sell 140 stores in a desperate attempt to stay afloat, but many believe that this is simply delaying the inevitable.  In fact, one prominent analyst named Bill Dreher believes that Sears will never be profitable again

One Wall Street analyst is beginning to doubt whether Sears Holdings will ever be profitable again, as the 124-year-old retailer struggles for liquidity and same-store sales evaporate.

“Sears’ operational performance is clearly NOT improving, and we grow increasingly concerned whether the company will ever return to profitability,” wrote Susquehanna analyst Bill Dreher in a note to clients Wednesday. “Further highlighting the company’s weakened position is the reality that manufacturers are increasingly demanding tighter payment and/or withholding products.”

Once upon a time, Sears was the number one shopping destination for the middle class.

But like the middle class in America, the best days for Sears are now long gone.

If we want to restore our economy to greatness, we need a vibrant middle class.

And in order to have a vibrant middle class, we need to have a system that encourages entrepreneurs and small businesses.  Free markets work if you allow them to, but unfortunately today we are strangling our entrepreneurs and small businesses with rules, regulations, red tape and oppressive levels of taxation, and until we change our ways we are going to continue to get the same very poor results.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

The Economic Collapse