Monthly Archives: April 2019

––––––––––––––––––––––––––––––––––––––––––––––––––

The road to confetti is long and winding

“Does the deployment of helicopter money not entail some meaningful risk of the loss of confidence in a currency that is, after all, undefined, uncollateralized and infinitely replicable at exactly zero cost? Might trust be shattered by the visible act of infusing the government with invisible monetary pixels and by the subsequent exchange of those images for real goods and services? . . .  To us, it is the great question. Pondering it, as we say, we are bearish on the money of overextended governments. We are bullish on the alternatives enumerated in the Periodic table. It would be nice to know when the rest of the world will come around to the gold-friendly view that central bankers have lost their marbles. We have no such timetable. The road to confetti is long and winding.” – James Grant, Grant’s Interest Rate Observer

Dr. MoneyWise says. . . .Some think it takes an advanced degree in economics to understand the merits of a diversification in gold and silver when all it takes is a little common sense.  Common sense ownership of physical metal saved the skeptical saver in the time of the French assignat inflation in 1789, the nightmare German inflation in 1923, the global bank collapses in 1932, the American stagflationary breakdown in the 1974 and Venezuela’s inflation in 2019 – even though those episodes span almost 250 years.  As old Ben Franklin once said: “A change of fortune hurts a wise Man no more than a change of the Moon.”

––––––––––––––––––––––––––––––––––––––––––––––––––

Posted in Dr. Moneywise, Today's top gold news and opinion | Tagged |

American colonists had a modern monetary theory of their own

BloombergOpinion/Stephen Mihm

“But there was a serious problem: The colonial government had no money, and failed to secure a loan. It fell to a small committee of prominent citizens to figure out what to do. The head of the committee was a man named Elisha Hutchinson. . . Hutchinson and the others devised an unusual solution to the problem. They issued what is generally recognized as the first fiat currency in the Western world. The twenty-shilling notes they printed cheekily claimed that they ‘shall be in value equal to money’ — meaning that they were equivalent to silver coin.”

USAGOLD note: Though, as Mihm explains, the original paper currency Massachusetts introduced in 1690 functioned reasonably well in terms of holding its value, some of its successors did not do so well.  Years later, a paper currency inflation during and after the American Revolutionary War earned a prominent place in the Amerian lexicon for the phrase “not worth a Continental.”   Mihm’s article  makes reference to the period in Massachusetts around 1690 as a “crude forerunner” of Modern Monetary Theory and is an interesting read.


“The Congress issued six million dollars of continentals in 1775, and the issues increased each year. One hundred and forty millions were issued in 1779. As prices rose, the government found that it needed more and more dollars to finance its expenditures. More money was printed. This added supply of dollars led to further depreciation in the infamous spiral of inflation. At the outset, the continental had circulated at par with a dollar of specie. By 1780, over one hundred continental dollars were required to exchange for one specie dollar; Congress had printed continentals until they were worth almost nothing.” – Murray N. Rothbard, Faith and Freedom, (1950) as published at the Mises Institute, 12/17/2018


Repost from 3-17-2019

Posted in Today's top gold news and opinion |

Central banks soften us up for higher inflation

Dollar Collapse/John Rubino

“In the decade since the trough of the Great Recession, nearly every sector of every major economy took on historically unprecedented amounts of new debt. And now the old “optimal” inflation rate of 2% isn’t enough to make interest payable for a growing number of borrowers. The solution? Higher inflation of course. The old 2% target was arbitrary in any event. And as with so many other things in life, if a little was good, a little more must be better, right?

USAGOLD note: As Alan Greenspan reminded us this past week, a 4% inflation rate in the early 1970s was enough for the Nixon administration to impose wage and price controls. Now with a 2%, even 2.5%, as a worthy goal for the Federal Reserve, a temporary 4% inflation rate would likely be  passed off as something to be watched but not a major concern.  The problem with inflation, and it has always been so down through history, is that the controlled blaze can suddenly and inexorably slip outside its designated parameters. Worst case examples – like Zimbabwe in the late 1990s (currency pictured) or Venezuela today – abound, as do lesser examples. Though hyperinflation in the United States is a distant concern, even inflation of the runaway, double-digit variety would wreak havoc on the markets, the economy and personal finances. The old admonition to “be careful what you wish for” comes to mind.


Repost from 4-19-2019

Posted in Today's top gold news and opinion |

U.S. investors lost twice as much as Standard and Poors 500 in 2018

Financial Advisor/Tracey Longo

“In fact, year after year, the firm has found that investors are often their own worst enemy, failing to exercise the necessary discipline to capture the benefits markets can provide over longer time horizons, while succumbing to short-term strategies such as market timing or performance chasing as they did in 2018, Dalbar has found.”

USAGOLD note: A powerful argument for a strong diversification in gold and silver – both of which have a low correlation to stocks and bonds.  JP Morgan’s finding that gold ranks second among investments over the past twenty years speaks volumes.  (Please scroll below.)

Repost from 4-19-2019

Posted in Today's top gold news and opinion |

Gold, silver trading level this morning, ‘delayed lift’ possible on tighter Iran sanctions

(USAGOLD – 4-24-2019) –  Gold and silver are trading level at $1272 and $14.83 per ounce respectively as the U.S. session opens.  No explanation of substance has surfaced with respect to yesterday’s sell-off though both metals did recover much of their early losses during the course of the day. China took the lead overnight in rejecting tighter sanctions on Iran’s crude oil exports. Financial markets, with the notable exception of crude oil itself, have underplayed rising Mideast tensions thus far.

We find ourselves in the same camp with Bloomberg’s Jake Lloyd Smith on the matter. “Gold,” he says, “is due for a delayed lift from the U.S. upping the ante against Iran with the decision to end the sanctions waivers. That move, if enforced, puts a U.S. boot on Tehran’s windpipe and sets the scene for further tensions. Iran is already talking about choking off the Strait of Hormuz, the vital maritime conduit for Persian Gulf shippers. While RBC Capital Markets reckons that the U.S. Fifth Fleet could handle a direct challenge in that area, any flare up would boost both crude and bullion.”

Quote of the Day
“In 2018, bullish sentiment for gold and silver was at a multi-year low. Very few people were interested. That’s usually the time to take a fresh look, technical and fundamental. If everything lines up, my analysis would go against the bearish majority. The chart below shows the exposure to gold of managed money in gold futures and options. It shows that the allocation to gold was at its lowest point on this chart in October 2018, at least since 2006. Also important is that in spite of the extremely low interest in gold, the gold price (yellow line) in 2018 was higher than at the gold low in 2016. I call this a very important long-term, bullish divergence.” – Bert Dohmen, Dohmen Capital Research – Forbes article

Chart of the Day


Chart courtesy of the World Gold Council (GoldHub)

Chart note:  The last time we visited this chart, we noted that managed money net long positions had begun increasing as of December 2018.  The price responded in the first quarter with an uptick.  Since then, managed money long positions have leveled out and the price has been rangebound between $1275 and $1310.  Thus far we have not seen the same level of turnaround in managed money positions that we did in 2016, 2017 and 2018 – something that a number of technical analysts see as a future possibility. In this morning’s Quote of the Day, we feature the thinking of Bert Dohmen (Dohmen’s Capital Research).  “Gold, ” he says in the analysis linked above, “could have a secular bull market until 2030. That means the gold bull market could have about 11 more years to go. Historically, the final phase of a bull market is the most spectacular.”

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Gold: A huge relief rally is imminent

321Gold/Stewart Thompson/4-23-2019

“Essentially, the West will see fading growth. The Fed’s actions will be negative for the dollar and positive for the fear trade for gold. The East will see solid growth and that will be supportive for the love trade for gold.”

USAGOLD note:  Stewart Thompson lays out the case for gold with 24 quick-read nuggets that tell why a huge relief rally is imminent. . . . .

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Citi says U.S. and China will nail deal, aiding commodities

Bloomberg/Jake Lloyd-Smith and Martin Ritchie/4-22-2019

“The outlook for commodities is bullish, according to Citigroup Inc., which expects raw materials to be supported by a confluence of positive factors including the agreement of a trade deal between Washington and Beijing, improved demand from China, and a weaker dollar.”

USAGOLD note:  If commodities get an assist from a U.S.-China trade deal, gold could be carried on the same wave of increased demand and higher prices.  Over the longer run, if China’s income and profits rise so too should the demand for gold among a population already culturally attuned to the long-term benefits and safety of gold ownership.  In any case, Citigroup joins Goldman Sachs and other in publicly declaring a positive longer-term outlook for the commodities complex.


Related: Commodity ETFs surge as investors hedge volatility/Yahoo/4-22-2019

Posted in Today's top gold news and opinion |

Brent crude hits 2019 high on heightened supply concerns

Financial Times/Philip Georgiadis and Siddarth Shrikanth/4-23-2019

“Crude prices rose to a five-month high on Tuesday, as Washington’s decision to end sanctions waivers on Iranian oil imports buoyed markets for a second day and sent shares in some of the world’s biggest energy companies higher.”

USAGOLD note:  One would think that at some point gold would play catch-up with oil but the correlation between the two is not always reliable in the short term.  It does tend to play out though over the longer run.

Posted in Today's top gold news and opinion |

Gold will break out of slump and test 2018 highs: Standard Chartered’s precious metals expert

CNBC/Stephanie Landsman/4-21-2019

“[Standard Chartered’s Suki Cooper] expects the yellow metal to test last year’s closing high of $1362 an ounce in the final three months of the year. And, her forecast gets even more bullish by 2020. ‘We actually think gold prices are more likely to break upside further in 2020 averaging $1375 next year,’ said Cooper.”

USAGOLD note:  A positive note on a negative day that improves as it wears on. . . . .

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

Kondratiev – Riding the economic wave

Bella Caledonia/George Carevan/4-9-2019

“The new downswing results from more than the 2010 financial crisis. There has been a wave of Chinese and Asian working-class resistance to exploitation, which has eroded profits. In the West, paradoxically, the historic defeat of the unions has flatlined wages. As a result, goods can be sold (and profits maintained) only by bolstering consumption through easy personal debt. That makes the Western capitalist model unsustainable and prone to endemic bank failure. The banks and their tame accounting firms are busy covering up this chronic instability via wholesale fraud. As a result, we are nowhere near the bottom of this K-wave.”

USAGOLD note:  The link above takes you to an excellent overview of the various stages of the Kondratieff Wave when applied to recent history and includes the author’s opinion as to where we are now. . . . . . The chart above provides a simplified template of the Kondratieff Wave since 1800.  We allow you to draw your own conclusions and only mention that gold is not just an historically proven inflation hedge, it has performed equally as well in modern times under disinflationary, stagflationary and deflationary circumstances.


Image: Kondratieff_Wave.gif: Internaszonalderivative work: Agmen [Copyrighted free use]


Repost from 4-9-2019

Posted in Today's top gold news and opinion |

It’s tough to be pessimistic on silver at current prices, says portfolio manager

MarketWatch/Myra P. Saefong

“‘Silver does not represent large components of end products,’ Smirnova explains, pointing out that electronics, cars, and medicines don’t use a lot of the metal per unit, so an economic slowdown probably won’t have a big impact on it. Its use in solar applications is also ‘insulated from economic growth” because that market is ‘more driven by government incentives and the need for renewable energy.’ Instead, it’s the ‘return of retail investment demand [that] will be the driving force behind an increase in the silver price,’ Smirnova predicts.”

USAGOLD note:  Conclusions similar to our own. . . We will remind our readers that when silver moves to the upside, it tends to move in grand fashion. Please see chart above.


Repost from 4-15-2019

Posted in Gold and Silver Price Predictions from Prominent Players, Today's top gold news and opinion |

A rare look inside the West Point Mint’s massive gold vaults and coin operations

Fox5-TV

“About an hour and a half’s drive north from New York City lies a treasure — the gold kind. But it’s not one that you can go and find. In fact, you can’t get anywhere near it. Because this treasure belongs to the United States Treasury. Nearly a quarter of the U.S. government’s gold sits beneath a windowless building on the campus at West Point.”

USAGOLD note:  You will enjoy this! Each bar is worth $500,000. . . . The Mint strikes the  American Buffalo (pictured) and Eagle gold coins at the West Point facility.


Repost from 4-18-2019

Posted in Today's top gold news and opinion |

The world-wide suppression of interest rates has been something very near to a crime

TheMarketNZZ/Christoph Gisiger

“By that I mean that the suppression of interest rates has served to advantage one class of people: The savers have been disadvantaged whereas big banks have been very greatly advantaged, and the financial community has been advantaged. In short: the saver’s loss has been the speculators’ gain. So, the ordinary working person has been disadvantaged and that is apolitical. To speak metaphorically but, I still think truthfully, that kind of policy is bordering on criminal – and I stand by that.”

USAGOLD note:  A strong position taken by one of our favorite Wall Street commentators (who also happens to be a long-time advocate of gold ownership).


Grant’s Interest Rate Observer


Repost from 4-19-2019

Posted in Today's top gold news and opinion |

Gold plunges under mysterious circumstances similar to a week ago

(USAGOLD – April 23, 2019) – Gold plunged this morning falling below the $1275 support zone to trade at $1269 – down $6 on the day.  Silver is down 22¢ at $14.81.  Once again the sharp drop occurred in the absence of significant news, at the COMEX open, involving roughly the same volume (a little over $1.5 billion in notional paper gold) and exactly one-week to the hour from the last paper dump April 16th.  We note also that the dollar moved sharply to the upside at the precisely the same moment.

Last time around, we first blamed one or more algo-based trading systems – institutional short sellers attempting to take advantage of a quiet, thinly-traded gold market. We then settled a few days later on the more likely possibility of a paper sale connected to Venezuela’s liquidation of bullion reserves.  Whether or not we will repeat the same sequence this time around remains to be seen. We must admit though to starting out in the same place we did a week ago – in a complete quandary.  Please stay tuned for further updates if more information surfaces.

Above: Chart of the COMEX open, April 16, 2019, with volumes just after the open.
Below:  Chart of the COMEX open, April 23, 2019, with volumes just after the open.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiencylies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Chart note: National security advisor John Bolton recently focused attention on the national debt saying that it was “a threat to the society.” The national debt now stands at over $22 trillion and nearly $1.5 trillion was added in 2018. “And that kind of threat,” he added, “ultimately has a national security consequence for it.” An obvious consequence is that interest payments eat up what might otherwise be spent on the national defense. Perhaps that is what has Mr. Bolton worried. As you can see in this final chart of our series on the national debt, there is a strong relationship between growth in the national debt and gold – one that goes all the way back to the early 1970s.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

One group will be spectacularly wrong

MacroTourist/Kevin Muir/4-22-2019

Ever wander into a game against a pro where you should have walked away

“There are practically zero professionals who believe this rally has legs and will continue to blast through to new highs. Want some actual data as opposed to anecdotes? How about this chart from Sentiment Trader that measures hedge fund exposure to the equity market. . .”

USAGOLD note:  A sobering look at the current stock market psychology and solid accompaniment to the post immediately below >>>>>>

Posted in Today's top gold news and opinion |

There’s no safe place to hide from the consequences of the biggest bubble yet

MarketWatch/Eugene Steurle/4-16-2019

“Today the United States sits in the midst of the largest wealth bubble in post-World War II history, as measured by household net worth (or wealth) relative to gross domestic product. As I showed in detail recently in the Journal of Business Economics, only two other postwar bubbles come close, with peaks in 1999 and 2006, just prior to the tech stock crash and the Great Recession.”

USAGOLD note:  The headline above says it all.  The investing public is in a peculiar place.  By and large, it believes the assertions of analysts like Eugene Steurle, yet there has not been a mass migration out of the stock market.  The prevailing attitude seems to be summed up in a thought process that goes something like this:  “When the time comes, I’ll get out and get out fast.  Until that time comes, I’m going to ride the wave.” Such thinking is based on a number of false assumptions but none more basic than believing that markets will be rational when that day arrives, particularly when investors will be faced with deflation of the largest wealth bubble since World War II.  An ounce of prevention, as the saying goes, is worth a pound of cure.

Posted in Today's top gold news and opinion |

Why American CEOs are worried about capitalism

Financial Times/Andrew Edgecliffe-Johnson

“When Roger Williams got his turn at the microphone earlier this month, his question for the bank CEOs lined up before the House committee on financial services seemed an unusual one to put to seven sharp-suited financiers. ‘Are you a socialist or are you a capitalist?’ the Texas Republican asked each of them, from Citigroup’s Mike Corbat to David Solomon of Goldman Sachs. None struggled to assure him of their free market bona fides, but the fact the question was even asked reflected a remarkable change in the discussion about business in Washington and beyond in recent months.”

USAGOLD note:  Whodathunk?  Now as younger people of voting age embrace socialism (Gallup puts that number at 51%.) some on Wall Street are beginning to get concerned. Those with a positive view of capitalism amount to just 45% in the 18 to 29 year old grouping.  These trends if they gain political momentum, and that is the fear according to this Financial Times article, ultimately will translate to higher taxes, more government spending, and looser Fed policies.  In the end, opening the floodgates on socialism equates ultimately to opening the floodgates on money printing and, in that context, the floodgates on gold ownership.  For those who like to stay on top the trends, this article is a must read.

Posted in Today's top gold news and opinion |

Markets make everyone feel stupid at some point

BloombergOpinion/Barry Ritholtz

“The success of Berkshire teaches us a couple of lessons: First, you must have a process for deploying capital in which you have a high degree of justified confidence; and second, you must be comfortable holding onto a position that isn’t working and possibly looking stupid, perhaps for years, as you wait for the cycle to turn. That’s enough to humble any mere mortal.”

USAGOLD note:  In other words, successful investing amounts to a leap of faith combined with good amount of patience. . . . .


Repost from 2-25-2019

Posted in Today's top gold news and opinion |

Quantitative easing forever

Daily Reckoning/Brian Maher

“The Federal Reserve’s San Francisco outpost recently released a report caroling the virtues of negative interest rates. Now its president — a certain Mary C. Daly — suggests the Federal Reserve could put quantitative easing on permanent market duty. That is, quantitative easing would attain general status — not restricted to emergency use only.”

USAGOLD note:  Money printing may have become to financial markets and the economy what drugs are to the addict – a dependency difficult to reverse.


Repost from 2/12/2019

Posted in Today's top gold news and opinion |

Why U.S. consumers hold the cards to the bull rally

Investopedia/Matthew Johnson

“Just as the stunning stock turnaround this year is boosting investor confidence, a ‘critical variable’ is now flashing warning signals—U.S. consumer confidence is starting to fall at rates not seen since the financial crisis. In a trillion-dollar economy where about 70% of activity is driven by consumption, that’s not a good sign and poses a major threat to the 10-year bull market.”

USAGOLD note:  This report on consumer confidence falls in line with concerns that we might be headed for a recession and perhaps one of the first signs that we are already in dangerous territory.


Repost from 4-16-2019

Posted in Today's top gold news and opinion |

Where is inflation hiding? In asset prices.

Real Investment Advice/Jesse Colombo

“A very dangerous fallacy has taken the world of economics by storm over the last several years: the idea that there is very little inflation in the U.S. economy, therefore interest rates should remain at unusually low levels for an even longer period of time. As I will prove in this piece, the people who believe in the ‘low inflation’ myth are being fooled by the fact that inflation in this unusual, central bank-driven economic cycle is concentrated in asset prices rather than in consumer prices.”

USAGOLD note:  And that fact of life raises all sorts of questions – about future central bank policy, about the future conduct of investors, about the future of price inflation, about the relationship between the White House and the Fed.  Colombo says we have reached “a dangerous bubble in U.S. household wealth.”  He says the bubble is going to burst and cause an economic depression. . .and the way things are going – the current trends so solidly in place – we find that opinion worthy of our readers’ attention.


Repost from 4-16-2019

Posted in Today's top gold news and opinion |

Gold level despite new Iran oil sanctions

(USAGOLD – 4-22-2019) – Gold is trading quietly this morning after a minor surge in the overnight markets on reports that the United States was preparing economic sanctions against nation-states that did not halt imports of oil from Iran.  It is level on the day at $1276. Silver is up 4¢ at $15.05.  Brent crude is up 2.5% at $73.70 per barrel.  Iran, in turn, is threatening to close the Straits of Hormuz, the vital choke point for oil shipments from the Middle East.  Things may change as the day progresses and investors reorient themselves after the Easter break.  If so, we will report back. For now though, the markets – with the exception of the energy complex – are reacting rather mildly to what might turn out to be an important turn of events.

Quote of the Day
“The U.S. posted its biggest monthly budget deficit on record last month, amid a 20 percent drop in corporate tax revenue and a boost in spending so far this fiscal year. The budget gap widened to $234 billion in February, compared with a fiscal gap of $215.2 billion a year earlier. That gap surpassed the previous monthly record of $231.7 billion set seven years ago, according to data compiled by Bloomberg. February’s shortfall helped push the deficit for the first five months of the government’s fiscal year to $544.2 billion, up almost 40 percent from the same period the previous year.” – Bloomberg report, 3-22-2019

Chart of the Day

Chart note:  This chart depicts U.S. government receipts and expenditures from 1950 to present.  Note the growing gap between incoming and outgoing – the difference for the most part filled by additions to the national debt.  Given the established trend, that gap in all likelihood would have continued widening without the imposition of the new tax reduction program and simultaneous growth in government spending.  With tax reductions now in place, the distance between the two lines is likely to widen even further.  This is the second last installment in our series on the national debt.  Tomorrow, we will post the final entry.

Posted in Daily Market Report, dailyquotes, Today's top gold news and opinion |

Act II of the most important political event of the 21st century begins in May

Money and Markets/Tom Luongo/4-19-2019

“In fact, just about any theory you can dream up as to why Prime Minister Theresa May has worked so assiduously to betray and delay Brexit likely has an element of truth to it. I could spend this entire article listing them. The biggest issue, of course, is that the European Union is a project without end. Its goal is creating the template for world government with only nominal nods to individual states still retaining control over their destinies.”

USAGOLD note: So what happens to May in May?  The next phase of Brexit begins, says Luongo, with it implications for Britain’s embattled prime minister and the whole of the precarious European Union.

Posted in Today's top gold news and opinion |

Short and Sweet

_________________________________________

Economic insecurity is becoming
the new hallmark of old age

In the United States,” writes Katherine S. Newman and Rebecca Hayes Jacobs for The Nation, “economic security in old age was seen, for a long time, as both a social issue and a national obligation. From the birth of Social Security to the end of the 20th century, the common assumption has been that we have a shared responsibility to secure a decent retirement for our citizens. Yet that notion is weakening rapidly. Instead, we have started to hear echoes of the mantra of self-reliance that characterized welfare ‘reform’ in the 1990s: You alone are in charge of your retirement; if you wind up in poverty in your old age, you have only your own inability to plan, save, and invest to blame.”

Image courtesy of GoldChartsRUs

Some compare today’s stock market psychology to the period just before 2008. Others compare it to the 1920s when everything was hunky-dory until suddenly it wasn’t – perhaps a more apt comparison. Too many are “all-in” with respect to stocks in their Individual Retirement Accounts hoping to accumulate as much capital as possible without regard to the potential downside. The stock market did not recover from the losses accumulated between 1929 and 1933 until the mid-1950s, almost 25-years later – a fragment of stock market history lost to time.

Some will rely on the fact that stocks recovered nicely once the Fed launched the 2009 bailout. We should keep in mind though that many prominent Wall Street analysts have warned that the Fed no longer has the firepower it did then. The financial markets and economy are much more vulnerable as a result – all of which brings us back to the notions of self-reliance and taking personal responsibility for our retirement plans. If you find yourself among the group that thinks hedging a stock market downturn to be in your best interest, we can help you easily and effectively structure a gold and silver diversification as part of your retirement plan to hedge that possibility.

_________________________________________

Posted in Short and Sweet, Today's top gold news and opinion | Tagged |

Did capitalism kill inflation?

Bloomberg/Peter Coy/4-17-2019

“If economics were literature, the story of what happened to inflation would be a gripping whodunit. Did inflation perish of natural causes—a weak economy, for instance? Was it killed by central banks, with high interest rates the murder weapon? Or is it not dead at all but just lurking, soon to return with a vengeance?”

USAGOLD note:  This Bloomberg article unveils a twist for modern central bankers, i.e., whether or not they are now expendable. . . . . Sounds like another one of those seductive tales about the end of history.

Posted in Today's top gold news and opinion |

Powell adopts an inflation stance Yellen shunned

Bloomberg/Rich Miller and Craig Torres

“’The Fed is evolving to a ‘whites-of-the-eyes’ approach in terms of inflation’ under which it won’t hike rates until price rises accelerate,’ said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC.”

USAGOLD note:  I can remember a time when economists thought that if the Fed waited for inflation to become obvious, it was already too late. . . . . . .


Repost from 4-17-2019

Posted in Today's top gold news and opinion |

Germans reluctantly switch to stock market in search of returns

Financial Times/Tobias Buck/4-18-2019

“Savers seeking the financial advice of Mario Münk and his colleagues at the Berliner Volksbank receive a sobering four-digit response: 0.001 per cent. That is the interest rate currently available on a savings account, the investment vehicle of choice for generations of Germans.”

USAGOLD note:  In a microcosm what is wrong with today’s financial markets. . . . .And why global stock market values are fundamentally the illusion of prosperity and subject to catastrophic failure.

Posted in Today's top gold news and opinion |

This is water

Epsilon Theory/Ben Hunt/4-17-2019

“Financialization is the smiley-face perversion of Smith’s invisible hand and Schumpeter’s creative destruction. It is a profoundly repressive political equilibrium that masks itself in the common knowledge of ‘Yay, capitalism!’. Financialization is a global phenomenon. In China, it’s transmitted through the real estate market. In the US, it’s transmitted through the stock market. Financialization is the zombiefication of an economy and the oligarchification of a society.”

USAGOLD note:  Profound insights that cry to be passed along. . . .but what is the likely  outcome?  Because financialization can go wrong in a heartbeat and no human can predict the outcome, you will need some gold and silver tucked away (it covers alot of the contingencies) . . . Then playing the markets or not playing the markets – whichever your choosing – has a financial and psychological backstop, a fall-back position that provides a little peace of mind amidst Hunt’s ongoing zombiefication and oligarchification (described at the link above).


Image by Trevor Mattea [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)] Edited-Cropped

Posted in Today's top gold news and opinion |

Gold specs sharply pared bullish bets to lowest in 19 weeks

Through Tuesday, April 16, 2019
Charts and commentary courtesy of CountingPips.com
Tables courtesy of GoldSeek

Note: Commitment of Traders reports are published Friday with data from the previous Tuesday.

Gold specs sharply pared bullish bets to lowest in 19 weeks

Gold Non-Commercial Speculator Positions:

Large precious metals speculators strongly decreased their bullish net positions in the Gold futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 56,273 contracts in the data reported through Tuesday April 16th. This was a weekly decline of -49,091 net contracts from the previous week which had a total of 105,364 net contracts.

The week’s net position was the result of the gross bullish position (longs) falling by -16,294 contracts to a weekly total of 183,213 contracts which combined with the gross bearish position (shorts) rising by 32,797 contracts for the week to a total of 126,940 contracts.

The net speculative position had risen for three out of the past four weeks before this week’s sharp decline. The current standing is now at the lowest level of the past nineteen weeks as the net position fell by almost half this week (-46.6 percent). The gold position has remained in a positive or bullish position for twenty-two straight weeks since a dip into bearish territory in November.

Gold Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -78,430 contracts on the week. This was a weekly boost of 54,379 contracts from the total net of -132,809 contracts reported the previous week.

Gold Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Gold Futures (Front Month) closed at approximately $1272.60 which was a loss of $-30.90 from the previous close of $1303.50, according to unofficial market data.


Silver specs sharply pulled back their bullish bets, down for 3rd week

Silver Non-Commercial Speculator Positions:

Large precious metals speculators continued to lower their bullish net positions in the Silver futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totaled a net position of 5,885 contracts in the data reported through Tuesday April 16th. This was a weekly decrease of -10,533 net contracts from the previous week which had a total of 16,418 net contracts.

The week’s net position was the result of the gross bullish position (longs) dropping by -377 contracts to a weekly total of 76,033 contracts in addition to the gross bearish position (shorts) which saw a strong gain by 10,156 contracts for the week to a total of 70,148 contracts.

The net speculative position fell for a third straight week and for the sixth time out of the past seven weeks. This week’s decline was only the third time spec positions have dropped by over -10,000 net contracts in a week since the beginning of October.

Overall, the current standing remains in bullish territory but at the lowest level since December 4th when the net position was negative. The recent slide in speculator sentiment for silver has come fast and furious as net positions have fallen from a total of +58,313 contracts on February 26th to just +5,885 contracts this week.

Silver Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -23,672 contracts on the week. This was a weekly increase of 14,090 contracts from the total net of -37,762 contracts reported the previous week.

Silver Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Silver Futures (Front Month) closed at approximately $14.89 which was a loss of $-0.27 from the previous close of $15.16, according to unofficial market data.


US Dollar Index, Japanese Yen specs cut bets this week

US Dollar Index Speculator Positions

Large currency speculators reduced their bullish net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 28,938 contracts in the data reported through Tuesday April 16th. This was a weekly decrease of -508 contracts from the previous week which had a total of 29,446 net contracts.

This week’s net position was the result of the gross bullish position declining by -1,443 contracts to a weekly total of 43,126 contracts that overtook the gross bearish position total of 14,188 contracts which also saw a decline by -935 contracts for the week.

The speculative net position had risen for two straight weeks before this week’s decline. The current standing overall has remained very steady in bullish territory and above the +25,000 net contract level for thirty-nine straight weeks. Despite the bullish positioning streak, we have seen a little bit of weakening recently in the dollar sentiment as net contracts have now been below +30,000 contracts for the past five weeks.


*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).
––––––––––––––––––––––––––––––––––––––__________–––––_______––––––––––––
Posted in COT Reports |

No DMR today

Markets are closed today.  Happy Easter to all. . . . .

Posted in Today's top gold news and opinion |