Fiscal year 2018

September 30th marked the end of the U.S. government’s fiscal year

For the month, it added $58 billion to the national debt.
For the fiscal year, it added $1.271 trillion to the national debt.
For the calendar year thus far, it added $1.082 trillion to the national debt.

At fiscal year end, the national debt stood at $21.516 trillion.


The National Debt and Gold
Here’s why the two have risen together since the 1970s
and why the correlation is likely to continue

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No DMR today

We will update though if anything of interest surfaces.

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Jeffrey Christian: Here’s when the gold price could hit a record high

Gold Investing News/Charlotte Macleod/10-2-2018

“He added, ‘and I do envision radically higher gold prices at some point over the next eight years, simply because I think the economic and political environment will require it.’ When asked what numbers might go along with those predictions, Christian explained, ‘we wouldn’t be surprised to see the price of gold back in the $1,250, $1,280 range by the end of this year.  .  .Looking further into the future, he said, ‘at some point, probably around 2023, 2025, we wouldn’t be surprised to see record gold prices of $1,800, $1,900 — maybe even $2,000 an ounce.’”

USAGOLD note:  We highly recommend the full audio interview at the link above.

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Silver: Canary in the inflationary coal mine

321Gold/Stewart Thompson/10-2-2018

“I believe a breakout is imminent, and that breakout should be accompanied by a stunning gold price rally. A few large speculators on the COMEX hold enormous short positions, and a surge in love trade demand would likely cause a massive short-covering panic amongst these speculators.”

USAGOLD note: Thompson goes on to say that “Silver is really the ultimate canary in the world’s inflationary coal mine, and it is starting to sing!”

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Gold coins fly off the shelf at the Perth Mint as prices drop

Bloomberg/Ranjeetha Pakiam/10-2-2018

“Gold coins are back in favor. Australia’s Perth Mint reported a jump in sales of coins and minted bars to 62,552 ounces in September, the highest since January 2017. Sales of similar silver products more than doubled from a month earlier to 1.3 million ounces, the highest in two-and-a-half years, according to the company’s blog.”

USAGOLD note:  This report echoes our own on U.S. Mint gold and silver bullion coins posted Monday.  Sales of silver Eagle bullion coins soared in September – up 89% over  August and 900% over September last year.

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Oil shock has already started in emerging markets

Bloomberg/David Fickling/10-2-2018

“With Brent crude surging north of $85 a barrel and some analysts warning that $100 is just around the corner, it’s comforting to remember that we’re still a long way from 2008, when oil hit an all-time record of $147.50. Comforting, but wrong. For much of the world’s population, we’re already at or near the worst levels endured during the 2008 price spike.”

USAGOLD note:  In the periphery, local inflation rates could soar in combination with mounting high unemployment and already-evident systemic risks. This dangerous confluence of stagflationary pressures makes many countries vulnerable to a black swan event.  Rising oil is a particularly dangerous catalyst because it can affect so many countries at the same time. “A year ago, I said, ‘the sun is shining—fix the roof,” says IMF managing director Christine Lagarde, “Six months ago, I pointed to clouds of risk on the horizon. Today, some of those risks have begun to materialize.”

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Wall Street Journal says Italy jitters boosted gold yesterday

Wall Street Journal/David Hodari and Amrith Ramkunar/10-2-2018

USAGOLD note:  The Wall Street Journal attributed gold’s strong showing yesterday gold to concerns about Italy. . . .The Journal reports that the Northern League’s Claudio Borghi said that ‘Italy would resolve the vast majority of its [economic] problems’ if the country had its own currency.”  Such a move on Italy’s part would do great harm to the euro, perhaps even threaten its existence.  If Italy were to move in this direction, it would likely ignite gold demand in Europe. We posted on the problems in Italy Monday: Please see Noland – Crisis dynamics gravitating from the ‘Periphery’ to the ‘Periphery of the Core’ [LINK]

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Gold – A reverse bubble in search of a pin

* * * * *
Editor’s note: Some might feel out of the loop with respect to today’s DMR, i.e., the COMEX short positions in gold silver and what they might mean for these markets going forward. . . .This post, particularly relevant to today’s market action, will bring you up to speed:

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The victim could quickly find itself the beneficiary

“The current COMEX short position in gold is a computer-driven market bubble blown to enormous proportions. Now at a record level, it is a different kind of bubble, though, from the type we usually associate with the term – a reverse bubble brought to life and nurtured through excessive selling rather than buying.  Nevertheless, it is just as deadly and opportunistic as the proverbial kind – a bubble in search of a pin.”

–– Full Article ––

_______________________________________________

 

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DMR–Gold, silver up sharply, three factors stand out

DAILY MARKET REPORT

Gold surged $18 in early trading again breaking through the $1200 barrier and reaching $1206 as this report is posted.  Silver is up 40¢ at $14.90.  Looking around among the usual indicators that might explain the sharp increase in prices, nothing stands out. In the absence of anything else, we reduce the possibilities to three that override the others.

– The first is the announcement yesterday (reported below) that Saudi Arabia will not open the production floodgates to forestall oil’s rise to $100 per barrel – an inflation threat.

– The second is that the downside has simply reached the point of maximum exhaustion, particularly for silver which is leading the way higher for both metals.

– The third is related to the second and has to do with the beginnings of short-covering in both gold and silver as we move into the fourth quarter of the year.

There is no direct confirmation of the latter at this point other than the anecdotal message delivered in the price itself and the absence of other prominent drivers. Investors should keep in mind the huge outstanding short position in both metals that needs to be covered. It will encourage big traders to ‘leg-in’ over a period of time – a process, though, that could be compromised as traders compete with each other to be first through the exit.

We will update if anything of defining interest surfaces.

UPDATE 1

In the past we have featured charts showing waterfall drops in gold accompanied with high volumes on the COMEX. Those volumes were part and parcel of the enormous short position that has been built up on the exchange and reported weekly in the Commitment of Traders reports. Here – in this chart – we see the first signs of an equal and opposite reaction. . . . a rocket-launch ascent.

Quote of the Day
“The population of the world is increasing at the rate of five thousand four hundred every hour. A small percentage of these people will become gold hoarders, people who are frightened of currencies, who like to bury some sovereigns in the garden or under the bed. Another percentage needs gold fillings for their teeth. Others need gold-rimmed spectacles, jewelry, engagement rings. All these new people will be taking tons of gold off the market every year. New industries need gold wire, gold plating, amalgams of gold. Gold has extraordinary properties which are being put to new uses every day. It is brilliant, malleable, ductile, almost unalterable, and metals except platinum. There’s no end to its uses. But it has two defects. It isn’t hard enough. It wears out quickly, leaving itself on the linings of our pockets, and in the sweat of our skin. Every year, the world’s stock is invisibly reduced by friction. I said that gold has two defects…The other, and by far the major defect, is that it is the talisman of fear. Fear, Mr Bond, takes gold out of circulation and hoards it against the evil day. In a period of history when every tomorrow may be the evil day, it is fair enough to say that a fat proportion of the gold that is taken out of one corner of the Earth is at once buried again in another corner.” – Ian Fleming, Goldfinger

Chart of the Day

Chart note:  What keeps the chairman of the Federal Reserve up nights? As shown on today’s Chart of the Day, the last time interest rates converged like they have over the past six months, it was 2006-2007 just before the financial crisis.

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Gold likely to reclaim $1,300 an ounce by the end of 2018 – Commerzbank

Scrap Register/10-1-2018

“Commerzbank analysts do not feel gold’s weakness has been justified by the fundamental backdrop and look for the metal to reclaim $1,300 an ounce by year end. ‘We see no real fundamental reason why the gold price should be having a hard time, given the numerous risks to the economy and financial markets,’ they said in a research note.”

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Skyrocketing deficit? ‘So what’ says new Washington consensus

Bloomberg/Ben Holland and Jeanna Smialek/10-1-2018

“Trump is proving as indifferent to fiscal orthodoxy as to any other kind. The spending measure he signed on Friday, along with the one approved in March and December’s tax bill, amount to the biggest stimulus outside recessions since the 1960s. They sailed through a House led by the supposedly hawkish Paul Ryan, who’s due to step down in January without much progress on his goal of reining in so-called entitlements like social security – an illustration of how Republican deficit scolds are in retreat.”

USAGOLD note:  Let’s face it, the deficit scolds were a minority and largely ineffective in Washington from the get-go.  The takeaway from this article is that government spending has finally spun out of control.  The Washington consensus, according to this article, says ‘so what’ and the markets shrug.

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OPEC ‘powerless to prevent’ oil prices jumping toward $100 a barrel this year

CNBC/Sam Meredith/10-1-2018

“OPEC kingpin Saudi Arabia is ill-equipped to prevent a supply shock in the energy market, analysts told CNBC on Monday, as oil traders prepare for the possibility of $100 a barrel before year-end.”

USAGOLD note:  Rising oil and rising inflation go hand in hand.  We have already begun to see the green shoots (to steal a phrase) of inflation sprouting up in Europe, the United States and elsewhere around the globe.  Saudi Arabia throwing up its hands is an important development in terms of the global supply.

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This bull market run has echoes of the late 1920s, Nobel Prize-winning economist Shiller says

CNBC/Keris Lahiff/10-1-2018

“‘The 1920s is quite a legend that people are often thinking about,’ Shiller said Friday on CNBC’s ‘Trading Nation.’ ‘I look at 1929 particularly as the end of the roaring ’20s and it ended in a bout of speculation. Between May and September of ’29 the stock market went up over 30 percent in just a few months.'”

USAGOLD note:  These comparison’s between the 1929 crash and the 1930s crop up with regularity these days. . . .Dalio, Howe and now Shiller.

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DMR–Silver American Eagle sales soar in September

DAILY MARKET REPORT

Gold is tracking marginally lower as we begin the week and the final quarter of the year.  The yellow metal traded as low $1185 overnight, bounced back to $1192 at the COMEX open, and is trading now at $$1188.50 – down $3.50 on the day.  Silver is down 20¢ this morning at $14.44 shedding about half of Friday’s strong gain.

The U.S. Mint reports soaring sales of American silver eagle bullion coins.  According to its month-end report, it placed 2.897 million of the popular one-ounce coins through its wholesale network during the month of September – a gain of 89% over August’s 1.53 million ounces in sales and a more than 900% gain over the same month last year.  The performance bodes well for demand as we move into the perennially strong fourth quarter of the year.  Wholesalers report dealers stocking up for that demand and to get ahead of the Mint’s annual production shutdown later in the year.

“The Mint ran out of silver Eagle bullion coins Sept. 6. Sales resumed Sept. 17,” reports Numismatic News. “Supplies as they are produced are being rationed. The Mint expects this situation to continue through the end of 2018. The Mint calls rationing “allocation.” The biggest regular buyers get the biggest allocations among the official Authorized Purchasers.”

Quote of the Day
“Money, again, has often been a cause of the delusion of multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper. To trace the history of the most prominent of these delusions is the object of the present pages. Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” – Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (1841)

Chart of the Day

Chart note: Last September was one of the worst in years for silver Eagle sales. The Mint sold only 320,000 coins. Last month was a different story entirely with the Mint selling almost 2.9 million silver eagles – an 89% gain over last month’ strong number and 900% gain over September last year. As reported previously here, low Mint sales in both metals over the past two years reflected broker/dealer inventories being sourced from the secondary markets following a string of record demand years prior to 2017. That secondary market supply suddenly dried-up in August though channeling demand back to the Mint, as reflected in the chart above.  The surge in sales indicates a reawakening of strong investor interest in silver at currently low price levels. Gold American Eagle bullion coins turned in a more modest performance with sales of 20,500 ounces in September. That total is down slightly from August of this year but an encouraging nearly double sales from September of last year.

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Druckenmiller says ‘we’re going to have a financial crisis bigger than the last one’

Bloomberg/Krista Gmelich/9-28-2018

“Billionaire investor Stan Druckenmiller says the next financial crisis will be worse than the last due to soaring levels of debt. ‘We have this massive debt problem,’ Druckenmiller said an interview with Kiril Sokoloff, chairman of 13D Global Strategy & Research. ‘We tripled down on what caused the crisis. And we tripled down on it globally.’”

USAGOLD note:  The article linked above summarizes his current views.  The YouTube below provides more detail and some interesting comments about the effects of algo-trading on his investment strategy.

Stanley Druckenmiller interview/Real Vision/Kiril Sokoloff

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Noland: Crisis dynamics gravitating from the ‘Periphery’ to the ‘Periphery of the Core’

CreditBubbleBulletin/Doug Noland/9-29-2018

“It’s worth noting Friday’s 26 bps surge in Italian 10-year yields. Italy’s yields were up as much as 35 bps intraday (to a four-year high 3.26%) before settling somewhat lower. Italian bank stocks sank 3.7% in Friday trading, this after Italy’s populist government appeared to agree on a 2019 budget deficit of 2.4% (above the anticipated 2.0% ceiling). Why such a forceful reaction (considering U.S. deficits will likely soon approach 5% of GDP)? I’m thinking back to when subprime issues began afflicting the ‘Alt A’ (less than prime) mortgage market.

Current market focus has turned to Italy – a heavily indebted sovereign borrower increasingly vulnerable to a tightening of global financial conditions; a prime beneficiary of loose finance on the upside, now at risk as a marginal borrower in a shifting liquidity backdrop. From my analytical perspective, Italy is a key player as we monitor for crisis dynamics gravitating from the ‘Periphery’ to the ‘Periphery of the Core.'”

USAGOLD note:  A double thumbs up for Doug Noland’s latest. . . . .

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Gold buying picks up in China on lower prices; India discounts narrow

Reuters, Mumbai-Bengaluru/9-30-2018

“’Cheaper gold prices led to increased buying in both Hong Kong and China. Shanghai premiums increased on Friday, reflecting higher demand,’ said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.”

USAGOLD note: Buying the dip. . . .

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Poland increases gold reserves

RadioPoland/Financial Times/9-29-2018

“If confirmed, it is the first such purchase by an EU member state this century, the paper said, citing a report of global advisory firm Macquarie Group. The National Bank of Poland (NBP) acquired gold in two batches: two tonnes in July and seven tonnes in August, according to IMF data cited by the paper.”

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Retailers warn of price hikes as China tariffs take hold

RetailDive/Daphne Howland/9-24-2018

“Retailers are being forced to squeeze their margins or raise their prices, or both, on a variety of goods just as the holiday season arrives. ‘The new tariffs are bad news for the retail sector, especially as the latest round seems to extend the tax to a vast array of consumer goods,’ GlobalData Retail Managing Director Neil Saunders said in comments emailed to Retail Dive. ‘Many retailers will now be faced with a difficult choice of whether to pass the cost increases across to consumers or to take a hit on their margins. The exact response will vary from retailer to retailer but, both strategies are likely to be used.'”

USAGOLD note:  At best, any withholding of price increases will be a temporary measure. . .out of necessity.

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DMR–Isolationism, de-dollarization and gold: A research note from JP Morgan market strategist, Marko Kolanovic

DAILY MARKET REPORT

Gold is up $2.50 at $1186 in today’s early going. Silver is up sharply (25¢) at $14.51.

Here is an interesting snippet from Bloomberg opinion columnist Robert Burgess published yesterday:

“[JP Morgan’s Marko] Kolanovic, who has dominated Institutional Investor’s annual rankings of top strategists for a decade or so, was out with a research note Thursday arguing that President Donald’s Trump’s isolationist foreign policy is a ‘catalyst for long-term de-dollarization.’  Put another way, the dollar is in jeopardy of no longer being the world’s primary reserve currency and all the benefits that go along with that, such as interest rates that are lower than they otherwise might be and the government’s ability to fund budget deficits in perpetuity. ”

At the moment, no one wants to believe that the current market paradigm can come to an end, but, unless history is stood on its head, end it will. JP Morgan’s Marko Kolanovic may have put his finger on what could turn out to be the catalyst – trade policy and its effect on the dollar.  Overshadowed in the political tumult of the past week was President Trump’s address to the United Nations. In it, he outlined what might come to be known as the Trump Doctrine.

Here in part is what he said:

“Each of us here today is the emissary of a distinct culture, a rich history, and a people bound together by ties of memory, tradition, and the values that make our homelands like nowhere else on Earth. That is why America will always choose independence and cooperation over global governance, control, and domination. I honor the right of every nation in this room to pursue its own customs, beliefs, and traditions. The United States will not tell you how to live or work or worship. We only ask that you honor our sovereignty in return.”

And. . .

America’s policy of principled realism means we will not be held hostage to old dogmas, discredited ideologies, and so-called experts who have been proven wrong over the years, time and time again. This is true not only in matters of peace, but in matters of prosperity. We believe that trade must be fair and reciprocal. The United States will not be taken advantage of any longer.

And, last. . .

America is governed by Americans. We reject the ideology of globalism, and we embrace the doctrine of patriotism. Around the world, responsible nations must defend against threats to sovereignty not just from global governance, but also from other, new forms of coercion and domination.

Whether you like Trump or not, whether you agree or disagree with his trade and tariff policies, the UN speech outlines something other than business as usual and it should be taken into account. That something has yet to be reflected in asset prices. Many will discount the UN speech as more presidential bombast and go about their business. Yet, these are policies that are already in place – realities not proposals.

In a separate article, Bloomberg’s Cecile Gutscher passes along one of the conclusions from Kolanovic’s study: “Gold, which tends to benefit from a weaker greenback, also offers a hedge for any tentative push to de-dollarize. And it’s looking decidedly cheap right now . . . U.S. unilateral policies risk bringing major powers of China, Europe and Russia closer, and such an alliance could profoundly impact the dollar-centric financial system.”

Quote of the Day
“We are hurtling towards a financial crisis in the next couple of years as sure as night follows day, and even with 4 per cent growth it doesn’t get you out of this. We had this massive tax cut and we now have trillion-dollar deficits as far as the eye can see. I have been a huge supporter for tariffs but I find it ironic that on the day that we actually sign the [Article 301 investigation into China’s practices] we pass a bill that is going to create these deficits and China is the financier of last resort for those deficits.” – Steve Bannon, former White House advisor

Chart of the Day

Chart courtesy of HowMuch.net

Chart note: “You can see the same top-heavy trend when looking at which continents have the highest reserves,” says HowMuch. “Asia clearly leads the way on the right side of the map, second to the green countries from Europe (thanks only to Switzerland). Every other continent is comparably tiny. Take a look at North and South America compared to Asia. It’s not even close. And where is the entire continent of Africa in our visualization? Since we excluded countries with less than $5B in reserves, only four orange countries made it onto the map.”

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Look at how well gold has retained its value from 1,000 years ago

Sovereign Man/Simon Black/9-27-2018

“Day-to-day, month-to-month, and year-to-year, the price of gold can fluctuate inexplicably. But over the long term, whether you’re comparing loaves of bread, home prices, or government tax revenue, it REALLY holds its value. This is one of the things that makes gold such an excellent hedge against political uncertainty, macroeconomic challenges, financial crises, inflation, etc. Said another way, gold is great insurance policy for all the ‘I don’t knows.’”

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As debt rises, the government will soon spend more on interest than on the military

CNBC/New York Times/Nelson Schwartz/9-26-2018

“The federal government could soon pay more in interest on its debt than it spends on the military, Medicaid or children’s programs. The run-up in borrowing costs is a one-two punch brought on by the need to finance a fast-growing budget deficit, worsened by tax cuts and steadily rising interest rates that will make the debt more expensive.”

USAGOLD note:  With everything else that’s going on economically at present, the national debt and interest paid on it has been shuffled to the back burner.   I can remember a time when spend-thrift politicians rationalized the growing debt by saying it was nothing to worry about because we owed it to ourselves.  That is no longer the case.  We owe a great deal of it to investors all over the world. . . .and we are paying interest on it:

 

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Trade gap in August widens to six-month high as exports fall

MarketWatch/Steve Goldstein/9-27-2018

“The U.S. trade deficit in goods in August widened to a seasonally adjusted $75.8 billion, according to a preliminary report released by the Census Bureau that excludes services. Exports fell 1.6% while imports rose 0.7% in what looks to be the worst showing since February. Retail inventories rose 0.8% and wholesale inventories increased 0.7%.”

 

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Better Business Bureau Five Star Review

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Recent Better Business Bureau Client Review

“Before investing in gold I really didn’t have a clue about what or how much to invest in. I came across the USAGOLD website and found an excellent resource for both first time and seasoned buyers. My representative has always provided me with useful and trustworthy analysis related to the markets and trends that has further informed my purchase decisions. Transactions are timely and handled with a high degree of professionalism and integrity. I cannot recommend this company highly enough.” – Y.O., 5-14-2018

Scorecard: 38 45 48 five star reviews. Zero complaints.
A+ rating. Accredited since 1991.

[Link]

USAGOLD Recommendation: The precious metals industry is unique in the financial industry in that it is not subject to oversight or regulation by third-party government entities like the SEC or CFTC. As such, marketplace forums and feedback sites often serve as a replacement for investors attempting due diligence. While several options can be found, by far the most impartial and least susceptible to vested influence is the Better Business Bureau. When looking at a company’s BBB profile, don’t focus solely on the rating. To be honest, pretty much everybody has an ‘A’ or ‘A+’ rating. What is far more important to assess is the number and nature of complaints, number and caliber of positive and negative reviews, longevity with the BBB, as well as the number of ‘stars’ given a company through the actual customer review system.

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DMR–Gold breaks sharply to downside on peculiar heavy COMEX short selling

Gold broke sharply to the downside at the open of futures trading this morning on heavy short-selling. Nearly 15,000 contracts were dumped within the first hour of trading, the equivalent of 1,500,000 troy ounces, or nearly 45 metric tonnes. Looking around for a motivation for such aggressive selling, the culprits are few and far between. The Fed announcement from yesterday was devoid of anything remotely jarring. The GDP number for July was confirmed at 4.2%, but this is a revision that confirms a number already well-known and understood. China’s yuan is down but marginally. The rest of the markets – bonds, stocks and the commodities – are trading quietly. So, gold market trading this morning, for lack of better adjective, looks “peculiar” and distinctly algo-driven – a description with which we will stick until something better comes along.

Quote of the Day
“We have to sell a lot of Treasury bonds, and we as Americans will not be able to buy all those treasury bonds. The Federal Reserve will have to print more money to make up for the deficit, will have to monetize more, and that’ll cause a depreciation in the value of the dollar. . .Two years out is when I’m worried about. It’ll be more of a dollar crisis than a debt crisis, and I think it’ll be more of a political and social crisis.”” – Ray Dalio, Bridgewater Associates, September, 2018

Chart of the Day

Chart note:  “Central banks,” reports the World Gold Council, “added a net total of 193.3 tonnes of gold to their reserves in the first six months of 2018, an 8% increase from the 178.6 bought in the same period last year. This marks the strongest first half for central bank gold since 2015.” Since the beginning of 2017, the biggest buyers were Russia – 383.3 tonnes; Turkey –125.8 tonnes and Kazakhstan – 68.4 tonnes. A surprise on the list, and reported here earlier this month, is India – 15.3 tonnes. The Peoples Bank of China, who many analysts believe to be the largest buyer, does not report publicly on its purchases. Some sources report though that its purchases could be as high as 500 tonnes per year.

Please see full report: Central bank buying activity/World Gold Council/9-20-2018

Also, please see this in-depth analysis – PBoC Gold Purchases: Secretive Accumulation on the International Market/Bullion Star

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10 lustrous facts about gold

Mental Floss/Elizabeth Miller/9-26-2018

“Gold’s symbol on the periodic table, Au, comes from its Latin name aurum, which means ‘glowing dawn.’ This metal’s tantalizing yellow color and shining exterior has made gold a prized element in jewelry and treasured objects for thousands of years—but, amazingly, all of the gold that has ever been refined could melt down into a single cube measuring 70 feet per side. Read on for more opulent facts.”

USAGOLD note: A refresher course on humanity’s long-term attachment to the yellow metal dating back to the Thracian civilization 4000 years ago.  We take special note of  fact #10. On a sunny autumn day, the golden Colorado capitol dome does truly shine lustrously against the bluest sky you will ever see . . . . . .


Image by Billmcmillan [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons [Edited]

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Speaking of Denver. . .

Report on Day Two of the Denver Gold Forum

InvestingNews.com/Charlotte McLeod/9-26-2018

“It’s been suggested that the move shows the two major miners [Barrick and Randgold] are confident in the gold price — as Goldcorp CEO David Garfalo commented in a Tuesday (September 25) presentation at the show, ‘you’re not doing that if you think gold is going to go down to $900 an ounce.’”

USAGOLD note:  Big things often happen at the Denver Gold Group’s annual conclave.  Garfalo is referring to the merger between the two major gold mining companies announced last week.  This report highlights some of the comments from analysts and mining company CEO’s.

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China demands U.S. ‘dispel obstacles’ to military ties and stop slander

Reuters/Christian Shepherd/9-26-2018

“China demanded the United States ‘dispel obstacles’ to improving military ties and stop slandering it, amid growing tensions over trade, Taiwan, the South China Sea and U.S. President Donald Trump’s claims of China meddling in the upcoming U.S. election.”

USAGOLD note:  We noted the building military tensions in the South China Sea yesterday.  As the rhetoric escalates, the Ray Dalio warning posted here last Saturday (A Path to War?) takes on special meaning.  The map below shows areas of contention/competing, over-lapping borders.


Image by Voice of America [Public domain], via Wikimedia Commons

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Fed’s light touch on interest rates may require a firmer hand

Financial Times/Sam Fleming/9-26-2018

“Mr Trump need not have felt aggrieved. Financial conditions going into the latest meeting were actually looser than they were when the Fed first started lifting interest rates in 2015, according to a Chicago Fed index, underscoring that the current rate-lifting cycle is the most benign in decades.”

USAGOLD note:  Some interesting notes on yesterday’s events from Financial Times.  The risk, some Wall Streeters say, is that the Fed is not doing enough to cool the economy down.  The market reaction to the announcement and press conference as of this morning has been by and large neutral.

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Trump slams Fed hours after Powell lifts interest rates

Bloomberg/Christopher Condon and Steve Matthews/9-26-2018

“‘We are doing great as a country,’ Trump said Wednesday at a press conference in New York. ‘Unfortunately they just raised interest rates a little bit because we are doing so well. I am not happy about that.’”

USAGOLD note:  The president went on to say that he is a “low-interest-rate person.”  No doubt he still sees the Fed as undermining White House tariff policies.

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