“Long gold: ‘Our sense is that Mr. Trump doesn’t hold any core policy beliefs and is apt to change his mind as he sees fit. This will lead to more political and economy uncertainty,’ which is positive for gold, according to Einhorn.”
MK note: The “Long gold” is wedged-in among the ever-present list of stocks and sector plays. Einhorn is a long-time gold advocate owing to discussions he had with his grandfather when he was a youngster – discussions that stuck even after he became a fabled money manager.
Coin News Net/1-9-2017
“U.S. Mint distributors spent a good deal of money buying just released 2017-dated American Eagle and Buffalo bullion coins. There was some pent-up demand with popular 2016-dated editions selling out in early December.
First-day sales of 2017 America Silver Eagles hit 3,747,500 coins, marking a 36% increase over the opening day total of 2,756,500 coins for last year’s release. The one-day tally is already higher than half of the monthly totals logged in 2016.
A combined 68,000 ounces in American Gold Eagles sold on Monday, up 13.3% from opening day sales in 2016 of 60,000 ounces.”
MK note: More direct evidence of physical demand. The lion’s share of gold and silver American Eagle bullion coin demand originates in the United States and is taken up by U.S.-based investors.
By the way, we should reiterate our warnings about purchasing bullion coins – proof or business strike – issued by grading services as perfect Proof or Mint State 70 and sold for very high mark-ups by various dealers. Almost all the coins purchased from the Mint and submitted to the grading services would end up in the “69” or “70” categorization. There is nothing special about this though it is endlessly promoted, particularly this time of year at first issue, as out of this world.. . . . . ..NOT SO!
If someone is trying to sell you on this concept BEWARE. Read here.
The Sovereign Investor/JL Yastine/1-4-2016
MK note: With the DJIA down about 120 this morning, this is probably a good time to get this link on the board. London-based Mr. Smithers is a highly respected commentator on global financial markets, and this forecast from him on the U.S. stock market quite frankly took me by surprise. He is a regular contributor to Financial Times.
“In 2014 Total Global Assets Topped $105 TRILLION (i.e more than $105,000,000,000,000) An astronomical amount by any standards. Interestingly, only a small fraction of this monumental amount has been allocated to gold investments.”
MK note: Old friend, Vronsky, posts a quick read and an interesting tale of “what if. . . . . .”.
“Rutledge’s top asset pick is real estate — the opposite of what was recommended when Reagan was beginning his presidency, the economist said.”
MK note: Former Reagan economist John Rutledge details an opinion very similar to what we expressed in a News & Views Special Report published earlier this month titled “Trump, Reagan economies at polar opposites.” If you read that Special Report and thought the argument had some merit, you will gain from the first-hand details provided at the link above. In the 1970s, the era that preceded the Reagan years (1980s), inflation dominated the financial landscape. Real estate did well and so did gold and silver – in fact spectacularly well. Rutledge seems to be expecting an era more like the 1970s than the 1980s.
If you would like to read the USAGOLD Special Report mentioned above, you can sign-up for immediate access here.
Financial Times/Tom Mitchell, Joe Rennison & Eric Platt/12-16-2016
“China’s foreign exchange holdings, much of which are invested in US Treasuries, have fallen about a quarter since early 2014 to just over $3tn. The decline has been driven partly by central bank selling of dollars to support the renminbi, which has fallen more than 15 per cent against the US currency over the same period.”
MK note 1: That drop in China’s Treasuries’ holdings is significant and translates to sales of almost $1 trillion in U.S. government paper. One has to wonder who is on the other end of these transactions. Some speculate that, if the current liquidation trend continues, a new round of quantitative easing (QE4) may be necessary to finance that portion of the deficit not picked up by foreign buyers.
MK note 2: It seems we are locked into a self-perpetuating financial merry-go-round wherein foreign sales of U.S. Treasuries drive down their value which in turn pushes up rates, which in turn drives the dollar even higher, which in turn forces the sale of more U.S. Treasuries by emerging countries led by China. . . . and the cycle repeats itself – a closed circuit with many layers and nuances that is likely to get considerable attention as we move into 2017. The Fed is not really raising rates so much as it is confirming the rate levels the marketplace has already imposed. All three .25% rate increases surmised by the Fed for 2017 have already been built into the yield on 10-year Treasuries with the .8% increase since the election.
MK note: CNBC interviews Robert Schiller, the economist who created that indicator.
Financial Times/Hudson Lockett, Tom Hancock and Charles Clover/12-7-2016
“The fifth consecutive monthly fall points to growing difficulty for policymakers. Since a sharp renminbi depreciation in August 2015, Beijing has sought to combat more severe softening against the dollar by selling the US currency from the central bank’s forex reserves.”
MK note: Falling Chinese reserves represent pressure on the yuan which in turn imposes two frontline effects important to gold owners: (1) increased gold demand within China among its citizenry and institutions, and (2) increased pressure on U.S. interest rates as bond principle erodes, on the 10-year Treasury for example, due to the selling. (“Selling US currency” translates to selling US Treasuries) Koos Jansen, the China gold specialist, reports strong on-going gold demand in China even with import restrictions, though not at the record levels of the last few years. A big behind the scenes problem, as the FT article points out, is that rising U.S. interest rates means emerging countries, including China, will be paying significantly more on their dollar-denominated debt than previously. China, in fact, is attempting to keep the yuan from cratering by selling U.S. Treasuries, but the net effect is to push dollar rates and the dollar even higher, which in turn puts more pressure on the yuan. Eventually, this self-perpetuating tailspin could translate to significant systemic risks as the risk of default spreads from emerging to developed countries and their banks. Odd markets. Odd times getting odder by the day.