The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Showing posts with label stocks. Show all posts
Showing posts with label stocks. Show all posts

Monday, June 5, 2017

Bitcoin now affecting company stock prices as investors flock to businesses who claim a cryptocurrency presence

There is no way around ignoring the comparisons between today's cryptocurrency mania, and the Dot Com boom of 20 years ago.  In fact, with the number of cryptocurrencies expanding almost daily, and investors piling into them without even having the slightest idea of what these cryptos represent, Bitcoin mania is now even affecting equity markets and stock prices in countries such as Japan.

The speculative frenzy in bitcoin is spilling over into the Tokyo Stock Exchange. Remixpoint Co., Infoteria Corp. and Fisco Ltd., have all seen volatile swings in their share prices after announcing businesses related to digital currencies. 
Remixpoint has more than doubled since tying up with Peach Aviation Ltd. to let customers pay for tickets with bitcoin. Infoteria, up 58 percent in the past month, is testing ways to let shareholders vote by proxy using blockchain, bitcoin’s underlying technology. Fisco, a financial information services provider, began operating a bitcoin exchange last year and is up 26 percent since early May. 
All of these gains coincide with bitcoin’s rally, with the value of the virtual currency doubling against the U.S. dollar since early May. That has made the stocks of the these small-cap companies an attractive way for speculators to invest in cryptocurrency markets without buying them directly. That’s because investors can make bets via their brokerage accounts instead of taking risks with bitcoin exchanges, according to Naoki Murakami, a well-known day trader in Japan. 
“From about a month ago when all these virtual currencies started spiking like crazy, we began seeing the so-called ‘stocks of the virtual currency bubble,”’ said Murakami, a frequent speaker at investor conferences. “Not everyone is sure they can trust bitcoin exchanges. And some don’t have accounts there. That’s why they’re using the stock market to speculate.” - Bloomberg
Bottom of Form
With money being extremely cheap today for investing just as it was during the Dot Com boom of the middle to late 1990's, and the wealthy having little trust in the value and stability of their own sovereign currencies, then cryptocurrencies and the businesses which are tied to them will continue to see billions poured in to provide a means of wealth protection, and that ever elusive demand for something that provides a modicum of yield.

Monday, May 15, 2017

Bitcoin has emerged as one of greatest investments of all time over seven year period if investors got in early

There is a reason why the equity markets are known as the 'risk trade', because no one truly knows if a particular stock or company will succeed or fail before these stocks become spoken of regularly in the mainstream.  In fact one of the key indicators of a stock's success is often whether it gets picked up by mutual fund managers as part of their clients investment or retirement portfolios.

Yet outside of bonds and real estate, virtually any investment can be labeled as a risk trade, especially in this era where fundamentals and technicals no longer play a significant role in their future price.

And unfortunately for the average Joe investor, they rarely receive the proper guidance or advice about potential life-changing investments from their broker unless that professional has a personal stake in a particularly risky investment scheme.  And because of this, the majority of individuals missed out on perhaps one of the best investments of all time when the price was sitting at approximately .09 back in 2010.

And what was that investment opportunity that has seen its price rise from just .09 to just under $1800 per?  The answer of course is Bitcoin.

On May 13, StockTwits, the world’s largest financial communications platform for the investing community, revealed one of its users’ growth chart comparing various currencies, bonds and assets. In it, a StockTwits user by the name of Charlie Bilello noted that a $10,000 investment in Bitcoin made in July 2010 would have earned investors a $200 mln return. 
To be exact, a Bitcoin investor who purchased $10,000 worth of Bitcoin in 2010 would have earned $201.56 mln. - Coin Telegraph
Assuming an individual had invested $10,000 back in 2010, they would have been able to purchase approximately 114,793 Bitcoins.  And with today's current price at around $1754, that would equate to an estimated value of $201,560,000, or 20,156x roi (return on investment).

Now compare this to what is considered to be the top all-time ROI of 1300x when John Grey invested $10,500 into the fledgling Ford Motor Company in 1903 and you can see this example pales in return to what someone who invested a similar amount in Bitcoin today would have earned.

In the end it is nice to dream about the what ifs when it comes to missing out on a diamond in the rough, but the fact of the matter is very few actually saw the potential of Bitcoin during the first few years of its existence.  But for those who did, and who did not sell a few years back when it had its first big jump to just over $1100 per bitcoin, it has become a lucrative and life changing investment with an even greater potential now of succeeding into the future.

Yet at $1745 per Bitcoin today, who has the stomach or the available cash to invest in it now that it is once again near its all-time high?  Thus it remains as it was back in 2010... a risk trade with great potential for massive gains, or massive losses.

Saturday, May 6, 2017

Paper gold leverage over 500/1 in order to protect dollar and trillions in derivatives

For those who either invest, trade, or save in precious metals, the past month has not been kind to the value of their holdings.  And in fact, sentiment against gold and silver ownership because of the volatile price swings has really been forged over the course of about six years going back to 2011 when each were crushed by manipulation when they were sitting at their all-time highs.

But to understand the gold market one must understand how its price is tied not to the physical metal itself, but to paper derivatives traded daily on the Comex.  And more importantly, why both the futures market and the regulators allow the bullion banks to sell contracts in which they do not have the actual gold to backstop these trades.

In essence it comes down to two simple and desperate needs... the first is to protect the dollar, and the second is to protect the trillions of dollars worth of derivatives held by the banks which would result in the complete implosion of the Western banking system.

As you can see in the 10-year chart of the dollar below, in 2011 the reserve currency was on the brink of collapsing as it fell below 73 and the last maginot line of support.


And like in 1980 when trust in the dollar was at a previous crossroads, gold and silver were the few assets that individuals could go to for protection against inflation and the collapsing currency.

Former Fed Chairman Paul Volker stated after he saved the dollar by raising interest rates to over 20% in 1981 that the one thing he wished he had done in his process was to manipulate the gold and silver price.  And that lesson was carried over to 2011 when the Fed formulated a program to manipulate and control the price of gold in tandem with their programs of QE which would introduce 10's of trillions of dollars into the monetary system.


Fast forward to 2017.

Unlike from 1980 to around 2002, when the price of gold remained relatively low in the mid-200's due to the exuberance of the Dot Com stock market frenzy and the lack of sentiment in the precious metals, gold demand since 2008 has remained fairly strong and fairly constant, requiring the bullion banks at the behest of the Fed to continuously push down the price using derivatives and naked shorts.  But in doing so what they have also done is create a leverage so vast that according to well respected metals analyst Andrew Maguire, that leverage is now at 500/1 paper contracts to every physical ounce.
As an example, at the BIS (Bank for International Settlements) opex expiry at 3pm UK time on the 30th of April, it was clear by the footprints that they were grossly offside on trillions of dollars worth of derivative positions which they were forced to defend. Anyone doubting that officially transacted BIS gold derivatives exceed $1 trillion, need look no further than their agent banks’ OCC positioning and add this to the Reserve Bank of India’s estimation that there is 92/1 leverage. However, this conservative estimate does note include related derivatives which estimate leverage to be (a staggering) 500/1. - King World News
Owning physical gold and silver is not a short-term trade scenario, but protection for your wealth over a long period of time when the natural cycle of booms and busts, or the collapse of a currency via inflation or loss of confidence, reaches its inevitable outcome.  And just like the way cheap money has artificially propped up stocks, bonds, housing, and other assets, when they eventually break, just as they did in 2008, the collapse of each of these will be horrific, and even greater than the 60% drop we saw in prices between 2008 and their bottoming out in 2010.

Sunday, April 23, 2017

Analyst Bo Polny's newest forecast seeks market crash and gold price soar in tandem with French election outcome

Analyst Bo Polny is not unique in trying to correlate numerical cycles to market outcomes, but his use of historical biblical trends has resulted in some fairly accurate forecasts.  And this is not to say that Polny has not been in error on a number of occasion, which is the case for his calls on the gold and equity markets over the past six to twelve months, but overall he has a track record that is above 80% over a long period of time.

Earlier this week Bo Polny was a guest on Greg Hunter's USA Watchdown program and during the 30 minute interview, he once again laid it on the line to say that his data and charting are showing a new stock market crash coming before the end of April, and the start of the gold price moving upwards towards $2000 in just the next few months.

And while it may be fairly easy to make predictions based upon geo-political events that are unfolding fast and furious right before out eyes, Polny had re-adjusted his calculations before the month of April had started, and before the U.S. engaged in military campaigns in Syria and now, North Korea.

Of importance according to Bo Polny's latest technical analysis is that the key dates of April 24-26 coincide with the tail end of the French elections, and just before the government potentially shuts down should Congress refuse to raise the debt limit by April 28.

Investors and analysts remember what happened to gold, equities, bonds, and currencies following the Brexit vote in June of last year, and the outcome of this first round of French elections on Monday could be even more chaotic as France is the linchpin on whether the EU remains a viable coalition, and if the Euro currency is ready to begin its deathwatch as two of the four French candidates have publicly called for its demise.

Predictions on Euro currencies reaction for each of the four French candidates


Saturday, March 18, 2017

Fed manipulation vs. economic stagflation: who will win the future over gold and stocks

Going back to at least 2008, if not further back into the 1990's and the Dot Com bubble, markets have no longer run on fundamentals and technicals, but rather on central bank and sovereign manipulations.  And all one has to do is look at the fact that despite corporate earnings declining for seven straight quarters, and most like an eighth here in 2017 Q1, the Dow has not only surpassed 20,000, but its acceleration to 21,000 was the fastest in history.

And now this breaking of market fundamentals by the central banks through their keeping interest rates down to near zero for 10+ years and infusing Wall Street with tens of trillions of dollars in credit has reached a crisis point, and a place where the Fed no longer has control over economic forces.  For the inflation they strove so hard to create in asset prices has now broken through into every facet of the economy, and has returned a monster from the that required extraordinary means to defeat.

Stagflation.

Image result for stagflation monster

In the late 1970's the economy reacted to the U.S. removing the monetary system from the Gold Standard and instituting a new Oil Standard (Petrodollar) by opening the door to massive inflation thanks in part to Henry Kissinger's agreement with OPEC that allowed for the price of oil to be raised.  And this then also allowed the U.S. monetary base to expand by that same amount and more to supply the world with dollars to be able to purchase energy.

This huge increase in the monetary base coupled with the economic slowdown of the middle to late 70's created the then unknown environment that would be labeled as Stagflation.  Stagflation of course is where you have slowing growth coupled with rising inflation.

To defeat this economic dragon, Federal Reserve President and later Chairman Paul Volker had to raise interest rates first from 9% in 1978, to its final top of around 20% in 1981.  And it was only from this that Stagflation was able to be crushed.

But unfortunately today the Fed has no possibility of doing a repeat of this since they and the U.S. government have pushed themselves into a corner by accumulating extraordinary debt.  In 1981 the national debt was around $500 billion, and the Fed's balance sheet was nary a blip on the radar.  However today the U.S. debt is now just under $20 trillion, and the Fed has debt based holdings of over $4.8 trillion making it impossible for them to raise interest rates of any substance since the interest alone on those obligations would bankrupt the country when they are rolled over at higher borrowing costs.

So what does this mean for the economy, for stock markets, for inflation projections, and perhaps the one asset we have yet to mention in this mirror world of 40 years ago?

When stagflation hit the economy beginning in the middle 1970's the one asset that excelled during that time was gold.  Gold went from $106.43 in 1973 (the year of the Petrodollar agreement) to over $850 at its peak in 1980.  This was a rise of 800% in just seven years.

1980
$594.90
29.61%
1979
$459.00
120.57%
1978
$208.10
29.17%
1977
$161.10
20.43%
1976
$133.77
-3.96%
1975
$139.29
-24.20%
1974
$183.77
72.59%
1973
$106.48
66.79%

Looking back in hindsight, Chairman Volker later lamented that the one thing he wished he done differently during the central bank's battle to fight stagflation was to manipulate the rising price in gold, which had acted as a barometer against the dollar, and was a much better safe haven than investors trusting in U.S. Treasuries.  And it was this lesson that Ben Bernanke, and now under Janet Yellen, that the Fed would not forego during their implementation of monetary policies that would inevitably lead us back into the straits we are in today.

Thus we are now at a crossroads since Stagflation has returned with a vengeance and the Fed has little if any ammunition to counter it.  And it is for this reason alone that the real asset winner going forward will be gold over stocks, and we may have seen this start last Wednesday when the Fed's latest rate hike resulted in not even a pothole that slowed down either inflation, or the strong rise in the gold price.

Tuesday, January 17, 2017

2017 will see the acceleration of baby boomers dumping retirement assets out of market to pay tax liabilities

In 2013 we saw the first of the baby boomer generation reach the magical 70 1/2 age which began a new trend where these retirees will have to start liquidating their tax deferred assets to pay Uncle Sam his due.  And while that first year saw only around $9 billion sold off from 401Ks, IRAs, and other tax deferred accounts, the Law of Compounding will begin to work against the markets in 2017 as an estimated 100,000 will be taking more distributions from their retirements than they will be contributing to them.

Retirement

In aggregate, per the Wall Street JournalBoomers have saved $10 trillion in various tax-deferred saving accounts.  While that sounds like an impressive figure, with 75 million Boomers, it equates to an average of $133,000 per person which, needless to say, is insufficient to fund ~20 years of retirement.  
But while the Boomers, and by extension taxpayers, are facing a harsh future, Wall Street has made a killing in fees off of managing the ever growing balance of retirement accounts as Baby Boomers have come of age.  But that all looks set to change as America's aging population is forced by IRS regulations to take retirement withdrawals once they hit 70 1/2 years of age. 
As illustrated by the chart above, over the past 2 decades Americans have consistently contributed more than they've withdrawn from tax deferred accounts, excluding recessionary periods.  But that all changed in 2013 and 2014 as the first wave of Boomers hit the magical age of 70.5 with a total of $25 billion of net withdrawals in 2014 alone. 
Contributions to tax-deferred retirement plans outnumbered withdrawals through much of the 1990s and 2000s. That flow began to reverse as boomers entered their retirement years earlier this decade. 
Investors pulled a net $9 billion from workplace retirement-savings plans in 2013, according to the Labor Department. In 2014 the withdrawals jumped to net $24.9 billion. Full-year information for 2015 from the Labor Department isn’t yet available, but large mutual-fund companies that manage the bulk of U.S. retirement assets say outflows continue to rise. Fidelity Investments expects 100,000 customers to take their first required distributions in 2017, up from 91,000 in 2016. 
Still, distributions are expected to grow exponentially over the next two decades because of a 1986 change to federal law designed to prevent the loss of tax revenue. Congress said savers who turn 70 ½ have to start taking withdrawals from tax-deferred savings plans or face a penalty. Specifically, retirees who turn 70 ½ have until April of the following calendar year to pull roughly 3.65% from their IRA and 401(k) funds, subject to slight differences in the way the funds are treated by the Internal Revenue Service. - Zerohedge
Yet what makes this trend even more dire for Wall Street is the fact that the younger generations are not buying stocks, or putting the same amount of money as their parents and grandparents into retirement accounts.  And with millennials having so much debt and lower job prospects on the horizon for at least the next decade, there are few buyers to mop up the selling that will be taking place in the markets at the coming exponential rates.

It has reached that time when Paul must pay back Peter for the years baby boomers spent deferring their taxes to save for their retirements, and Uncle Sam will not care how it affects the overall markets in the short and long runs.  And like the fact that Social Security no longer has enough workers paying in to support the benefits being taken out by these same boomer recipients, the retirement programs of 40 and 50 years ago will have to redone for a different world, and where the younger generation will need to rely more upon themselves than in being able to use Wall Street as their retirement vehicle.

Got gold?

Saturday, December 10, 2016

30 years later the Dow is at the same ratio to debt as it was in late 1987

Following the 1987 stock market crash, the Federal Reserve began a new course of monetary policy in which they would use a combination of debt and manipulated interest rates... not to protect the bond markets or inflation, but to boost up the stock markets.  And in the just over 29 years since this policy started under Alan Greenspan, an interesting parallel has occurred.

The ratio of the national debt is virtually the same as the increase in the Dow Jones average.

National Debt

Dow

In 1987 the United States ended the year with a national debt of $2.35 trillion, and the Dow ended the year at 1927.31.  However, before the Oct. 19 crash it was at 2246.73, or a ratio of 1:.956 Debt to Dow.  This ratio of nearly 1:1 is significant because it is the starting point for a trend where the Dow would begin to rise either in tandem, or in the same multiples as the debt.

When Bill Clinton took office in January of 1993, the debt was at $4.064 trillion and the Dow was at 3301.  And the increase of debt from 1987 to 1993 was virtually the exact same increase the Dow experienced (42% vs. 41.6%) during the same period.

Most mainstream pundits and economic analysts love to tout how Bill Clinton 'balanced the budget' and added few deficits that led to increases in the national debt.  But what they willingly or unwillingly fail to mention is how the Clinton administration raided the Social Security Trust of over $3 trillion and replaced the cash with Treasuries (debt).  And instead of borrowing the money from the Federal Reserve, which would have officially been added to the National debt number, he instead robbed Peter to pay Paul, and his total increase to the debt was over $4.6 trillion to finish out his term with the real debt between $8.6 and $9 trillion.

But there was a caveat that needs to be added to this era as it was also a time when Alan Greenspan lowered interest rates from 7.25% in late 1987 to a low of 3.25% when Clinton took office in 1993.  And because of this near doubling of overall debt coupled with the halving of interest rates, the Dow subsequently more than tripled during this era known as the Dot Com Boom.

Real debt increase from Jan. 1992 to Dec. 31 1999: 120%.  Dow increase from Jan. 1992 to Dec. 31 1999: 348%.  Interest rates halved from 7.25 to 3.25%.

Over the course of the fiscally irresponsible years from 2000 to 2016, where the national debt doubled first under George W. Bush to $9.5 trillion and again under Barack Obama to its current level of $19.8 trillion, the stock markets climbed nearly in tandem to the rise in debt outside the stock market crash and declines of 2008-2009.  And most astonishing is that as of Dec. 9, 2016, the ratio of Debt to the Dow is back where it began nearly 30 years ago at a virtual 1:1 equivalent.

Dec. 9:  Dow close:


Dec. 9: National Debt


$19.87 trillion to 19,756     Ratio 1:.994

Coincidence?  Now imagine what the stock markets would look like if the government had not borrowed so much money... or if they decide to finally shut off the spigot... or the spigot is shut off for them.

Are you willing to put your retirement trust in the hands of entities that will not grow or survive without more and more borrowed debt?

Thursday, November 10, 2016

Europe, not the U.S., were the biggest buyers of gold after Donald Trump won the presidency

As the election counts began coming in on the evening of Nov. 8, the markets reacted chaotically as the night wore on to the reality that Donald Trump victory was going to be the next President of the United States.  And this market turmoil led to the dollar, stocks, and gold all moving in extreme opposition to what the markets had anticipated when they closed for business on Tuesday.

Yet the most interesting thing occurred within hours of seeing the Dow futures down 840 points, the dollar down 300 bps, and gold up $61... these markets all reversed and by the time trading was over on Wednesday gold had lost all of its gains, the dollar had recovered all of its losses and more, and stocks closed well into the green.

So the question then remains is, does a Trump victory mean the end to the gold bull market, or was this 'recovery' a last ditch effort by the Fed and Treasury to prop up paper markets?

Perhaps the answer lies over in Europe where following the Trump victory gold sales all across the continent were occurring at a record pace.

Spot gold prices surged nearly 5 percent with Donald Trump's surprise U.S. presidential election win spurring purchases of physical gold 
The flurry of buying on physical markets mostly took place in Europe, after Trump's victory was declared, when the price of spot gold surged by nearly 5 percent to a six-week high of $1,337.40 an ounce. 
Gold gave up gains during U.S. trading and turned slightly negative, as the dollar moved higher and Wall Street stocks rose sharply. [MKTS/GLOB] 
"Overnight, there has been a tremendous increase in our sales," said Oliver Heuschuch, head of trading for Degussa's gold business, one of the biggest German physical dealers. 
"It's nearly treble the size of regular business."
Ahead of the election, analysts widely expected that a Trump victory would cause gold prices to rally as investors sought refuge in perceived safe-haven assets such as gold. 
Demand for physical gold and silver in the United States rose in the weeks prior to the vote, but in contrast to Europe there was little sign of buying in the United States on Wednesday. 
"Today's figures are already some of the best on record, even surpassing our performance following the Brexit vote," said Chris Howard, director of bullion at the United 
Kingdom's Royal Mint, about Signature Gold sales that involve customers buying gold that is stored at the mint. 
The Pure Gold Company in London said its sales spiked 42 percent early on Wednesday versus the prior day. - Reuters

Wednesday, November 9, 2016

As expected, Trump victory drives gold price back over $1300 as global markets uncertain of future

As we at The Daily Economist wrote yesterday, the opportunity for short-term anti-establishment bets in gold, currencies, and the stock markets came to fruition when Donald Trump successfully beat the odds and won the White House early on Wednesday morning.

Starting with his taking of Florida in the early evening, and culminating with his surpassing of 270 electoral votes around 2:30am, global markets treated the Trump victory like a Brexit part two, and gold was definitely a benefactor by rising over 5% at one point.

Gold jumped nearly 5 percent on Wednesday to its strongest in six weeks as investors snapped up safe havens with Republican Donald Trump winning the race for the White House over Democrat Hillary Clinton. 
It marked gold's biggest single-day gain since June 24 when it rose as much as 8 percent when Britain decided to leave the European Union. It closed up 4.8 percent that day. 
A Trump win, which many see could lead to economic and global uncertainty, may also push the U.S. Federal Reserve to hold off from raising interest rates next month, further burnishing gold's draw, analysts say. - CNBC
Despite the fact that Trump will not officially take office for another 72 days, his victory will reverberate around the world's markets for some time as the uncertainty of new fiscal and monetary policies that may or may not be beneficial to Wall Street will have a significant effect on gold going forward.

Tuesday, November 8, 2016

Brexit II moment for gold and stocks as markets are completely priced in for Hillary victory

Election day 2016 has finally arrived, and it is not only the American people who are preparing for a change in leadership but also the markets.  In fact, thanks to a simple press conference done on Sunday by FBI Director James Comey, the markets exploded yesterday with expectations that Hillary Clinton would come out successful in the Nov. 8 vote.

But as many analysts have discussed over the past month, the outcome of today's Presidential election could actually trigger a Brexit part deux type event, as stocks, gold, and currencies are completely priced in for a Clinton victory, and this means that today's trading could actually be life changing for individuals if Donald Trump ends up winning.

Rickards says that Trump "will probably win" and, if he, does stock markets will crash 10% and gold will rise $100 over night. 
The markets and polls believe Clinton will win and that is priced into markets in the same way that a 'Bremain' was priced into markets prior to the 'Brexit' vote. 
“If Hillary wins nothing happens, if Trump wins you will have an earthquake.” 
Should Trump win, which looking at the polls is not an impossibility, gold would likely surge $100 per ounce overnight, says Rickards. 
What Hillary did was appalling and there will be ‘another reckoning on November 8th’ which the market has failed to price in, creating a good scenario for gold. He says you don’t have to agree that Trump will win, but agree that that in reality he could win. 
For Rickards, this is an excellent opportunity for investors, particularly those who have an allocation to physical gold which he believes is set to rise in the coming months and years. - Zerohedge

Sunday, November 6, 2016

Moves up in gold and down in stocks over past 10 days signal the markets now believe in a strong Trump victory

For anyone who has taken the time to watch buying and selling activity in the gold markets over the past month, it was more than obvious that the takedown during the first week of October was both manufactured, and done at a time when the world's biggest physical market (China) was off for a national holiday.  And as such, once they returned gold has risen over each of the last four weeks back to above the $1300 support level.

But what is perhaps most interesting for the markets in general is the historic declines we have seen over the past 9 days in the Nasdaq and S&P 500, and the 7 days in a row for the Dow, where that measured amount of negative trading has not occurred since 1980.  And this is being attributed to the sudden shift in political winds where the markets now strongly believe that Donald Trump will win the election.

Image result for trump accepts gold for deposit
The S&P 500 ended lower on Friday for a ninth straight day, the longest losing streak for the benchmark index in more than 35 years, as investors stayed on edge ahead of an uncertain U.S. election. 
The tech-heavy Nasdaq also ended lower for a ninth-consecutive session, while the Dow industrials closed down for a seventh straight day. 
Investors have been unnerved by signs of a tightening presidential race between Democrat Hillary Clinton and Republican Donald Trump. 
Clinton had been thought to have a clear lead until the re-emergence last week of a controversy over her use of a private email server while secretary of state. 
"Investors are uncertain about the outcome of the election, and they have grown more uncertain since last Friday," said Walter Todd, chief investment officer with Greenwood Capital in Greenwood, South Carolina. - Reuters
The Donald Trump phenomenon is now being paralleled to that of the UK's earlier Brexit vote from back in June, where going into the final day the markets bet heavily on a Remain outcome.  And when this did not happen following the vote, stocks, currencies, and bonds all fell drastically, and gold rose by $100 in a single day.

Some analysts are expecting more of the same come Tuesday, with equities falling by perhaps 1000 or more points on Wednesday and gold going up $100 - $150 if Trump prevails.  But this may be just the beginning of a much larger financial crisis since central banks are too hamstrung to deal with another black swan type event.

Wednesday, November 2, 2016

Gold soars and stocks fall as markets now forecasting a Trump victory

For the first time since the early October beat down of gold, the precious metal crossed over $1300 per ounce as revelations from the FBI on re-opening the cast against Hillary Clinton has pushed the markets into believing that Donald Trump has a strong shot at becoming the next President of the United States.

In Monday's trading, gold rose over $10 and stocks fell to the point that the 18,000 level was breached on the Dow for the first time since August.  And in the pre-market today that trend is continuing as gold is up another $10 while stock futures are down another 39 points.

LA Times
In a study released last week the GFMS team at Thomson Reuters concluded that while a Clinton win would not have a dramatic impact on the gold price, a Trump triumph will put pressure on financial markets and the dollar, prompting investors to seek the relative safety of gold: 
According to GFMS a Trump victory could spark a rally to $1,400 and maybe even $1,500 in our view while a win for Clinton would likely see prices ebb lower. - Mining.com
Live New York Gold Chart [Kitco Inc.]

World stocks, the dollar and oil fell on Wednesday, while safe-haven assets such as gold and the Swiss franc rose as investors were rattled by signs the U.S. presidential race was tightening just days before the vote.
Investors were beginning to rethink their long-held bets of a November 8 victory for Democratic candidate Hillary Clinton amid signs her Republican rival Donald Trump could be closing the gap, deepening the recent decline across major stock markets. - NBC News

Thursday, September 22, 2016

Gold price and gold miner ETF both spike following Fed's confused position on economy following another failed FOMC meeting

Immediately following the Fed's announcement that once again they would not be raising rates in September, gold shot up over $20 as continuing confusion from the U.S. central bank is driving investors into the best safe haven.

But gold bullion was not the only precious metal asset to benefit from the Fed's remaining at the status quo as the primary market index for gold miners, the GDX, also rose 7% on Wednesday signalling that expectations of much higher prices to come will encapsulate stocks tied to the precious metal.

SPDR Gold Shares (GLD), which tracks the spot price of gold, jumped 1.5% through the close. The ETF recaptured its 50-day moving average for the first time since Sept. 8. It had come under pressure from uncertainty surrounding the Fed's next move on interest rates. 
Higher rates tend to weigh on gold, a nonyielding haven asset, while lifting the dollar in which it is globally priced. 
VanEck Vectors Gold Miners (GDX) vaulted 7.1% on the stock market today. Mining companies are widely regarded as a leveraged play on the price of gold. 
Silver and silver-backed mining ETFs also flew higher in big volume, with iShares Silver Trust (SLV) breaking through resistance at its 50-day moving average and closing at the top of the day's range. - Investors Business Daily
With the Fed nearly assured of propping up equities into the foreseeable future, investing in well positioned mining stocks has become a great addition to buying physical gold as many have risen by more than 100-500% since the beginning of the year.

Monday, September 19, 2016

As the Fed prepares for interest rate decision this week, recent history shows gold to climb no matter which way they go

In the past one could accurately predict what would happen to the price of gold when the Federal Reserve chose to move interest rates either higher or lower.  But with the markets now fully manipulated from the central bank's use of QE and stimulus, and both stocks and bonds in over-priced bubbles, rationality and fundamentals no longer are relevant.

In recent history, gold has more often than not risen no matter what the Fed has done because the markets are ruled in large part now by uncertainty.  When the central bank began its five year move of lowering interest rates back in 2010, and printing money to buy bonds, stocks, and any and all assets they could get their hands on, the markets had supreme trust in the Fed, and it was reflected in the drop in gold from an all-time high of $1940 to its pre-December 2015 low of $1045.

But as we have seen for the last 10 months, every time the Fed issues a formal statement to either raise rates (December 2015), or make no changes (All of 2016 to date), gold has responded in kind to the upside.

January 27 FOMC Meeting - Gold Up



March 16 FOMC Meeting - Gold Up



April 27 FOMC Meeting - Gold Up



June 15 FOMC Meeting - Gold Up



July 27 FOMC Meeting - Gold Up



September 21 FOMC Meeting - Gold ?

So when interest rates were raised in December of 2015, the gold price went up.  And subsequently after every single FOMC meeting this year, the price also went up when they did nothing.

Interest rates are still near zero, with the Fed desperately afraid to both raise them up prior to the election, or lower them down into negative territory like in Europe and Japan.  And it is in part to this schizophrenia and loss of confidence in the central bank that will very likely keep gold prices going up for the foreseeable future.

Wednesday, August 17, 2016

Rothschild dumps stocks and buys gold during 2nd quarter of 2016

George Soros, Stanley Drunkenmiller, and Carl Icahn weren't the only billionaire fund managers to have sold off their stocks and increased their gold holdings since the beginning of the year.  In fact, the grand-daddy of all financiers, Lord Rothschild, published in his semi-annual report that he had cut stocks from 55% in his fund's portfolio down to just 45%.  And in their place he upped his stake in gold to 8%.
The six months under review have seen central bankers continuing what is surely the greatest experiment in monetary policy in the history of the world. We are therefore in uncharted waters and it is impossible to predict the unintended consequences of very low interest rates, with some 30% of global government debt at negative yields, combined with quantitative easing on a massive scale. 
To date, at least in stock market terms, the policy has been successful with markets near their highs, while volatility on the whole has remained low. Nearly all classes of investment have been boosted by the rising monetary tide. Meanwhile, growth remains anaemic, with weak demand and deflation in many parts of the developed world.
Many of the risks which I underlined in my 2015 statement remain; indeed the geo-political situation has deteriorated with the UK having voted to leave the European Union, the presidential election in the US  in November is likely to be unusually fraught, while the situation in China remains opaque and the slowing down of economic growth will surely lead to problems. Conflict in the Middle East continues and is unlikely to be resolved for many years. We have already felt the consequences of this in France, Germany and the USA in terrorist attacks. 
In times like these, preservation of capital in real terms continues to be as important an objective as any in the management of your Company’s assets. In respect of your Company’s asset allocation, on quoted equities we have reduced our exposure from 55% to 44%. Our Sterling exposure was significantly reduced over the period to 34%, and currently stands at approximately 25%. We increased gold and precious metals to 8% by the end of June. We also increased our allocation to absolute return and credit, which delivered positive returns over the period, benefiting from a number of special situations. Within this category our new association with Eisler Capital had an encouraging start. We expect this part of the portfolio to be an increasingly important contributor to overall returns. 
On currencies, we reduced our exposure to Sterling in anticipation of Brexit and the generally unsettled UK political environment. Our significant US Dollar position has now been somewhat reduced as, following the Dollar’s rise, we saw interesting opportunities in other currencies as well as gold, the latter reflecting our concerns about monetary policy and ever declining real yields - Zerohedge

Wednesday, August 3, 2016

Presidential candidate Donald Trump tells supporters to get out of the stock market and sell their 401K's

Most people know that Donald Trump is a highly successful real estate mogul and brand marketer, but interestingly, his prowess for winning has often not manifest itself in the equity and stock markets.  There could be numerous reasons behind why he has failed in this arena but the most probable is that he is not one of the 'insiders' like Warren Buffett, who latches on to government institutions for certain 'insights' into the direction of market industries and executive policies.

So with the Donald not being a big fan of stock markets, it should come as no surprise that the interventions (by the Fed) and manipulations (High Frequency trading computers) that comprise the bulk of equity market trading have led him on Aug. 2 to tell his supporters to not only get completely out of stocks, but to also divest their 401K's before the markets inevitably collapse.

Well, we are now almost exactly three months away from the November 8 election, and if Trump wants to really boost his chances, a market crash right now would be certainly most welcome by his campaign. 
That may be why Trump on Tuesday urged his supporters holding 401-(k) to get out of equities as interest rates set by the Federal Reserve are inflating the stock market. 
“I did invest and I got out, and it was actually very good timing,” the Republican presidential nominee said in a phone interview with Fox Business. “But I’ve never been a big investor in the stock market.” “Interest rates are artificially low,” Trump said. “The only reason the stock market is where it is is because you get free money.” 
Trump also warned of "very scary scenarios" ahead for investors. - Zerohedge

Saturday, July 30, 2016

Gold crosses a milestone that historically guarantees another 40-412% in price growth

Before the advent of central bank intervention into the markets, most investors relied upon fundamentals and technical analysis when researching the future of a company stock, or the potential growth in resource commodities.  And while past history does not always guarantee future trends, the likelihood of certain benchmarks being crossed places the probability of such moves in the 75-95% range.

This week, technical analysis for gold reached one of those historical milestones, and in all past bull markets for the metal, the upside once reaching that benchmark has always been between 40 and 412%.
Strategically, it’s been even longer since we updated our longer-term framework for gold.  In fact, it’s been three months since we did that in this post.  In that May piece we suggested the metal continued to track favorably vs. our bullish expectations, but in the near-term it faced a major test having rallied nearly +25% off its Dec-15 low, a historical demarcation point whereby cyclical retracement rallies were either snuffed out with a resumption of a secular bear beginning afresh, or, the same moves continued higher, indicative of a new secular bull being underway.
Where do we now stand vs. that +25% demarcation point? 
As of month-end today, gold is up over 27% from its Dec-15 lows. 
This a major milestone - any time gold has managed a move of at least 25% off a major low, it has continued higher every single time with incremental gains ranging from 21%-412%, with the average totaling 175%. - Only Prices Matter


Chart courtesy of Only Prices Matter.com

Wednesday, June 29, 2016

Beginning July 1 will start the trillion dollar selloff of stocks for baby boomers over the next 11 years

Besides the consequences of there being more Baby Boomer retirees than workers to fiscally deal with the insolvent social security program, a new monetary crisis is about to hit the markets in just three days time.  That is because on July 1, the oldest of the Baby Boomer generation will turn 70 1/2, and thus forced to start selling off their 401K, IRA, and mutual fund assets to fulfill their obligations to Uncle Sam and the taxman.
Currently there are between $14-15 trillion in non-pension, personal retirement accounts which are held on Wall Street in the forms of stocks, bonds, annuities, reits, and other security assets.  And by law once someone reaches the age of 70.5, they must begin selling off those securities at the rate of 3.65% each year, with a decade later it expanding to 5.35% after age 80, and 11% per annum after age 90.
Since the first of the Baby Boomers will be hitting the age of 70.5 on July 1, selloffs in the market will commence over the next 11 years as those on the lowest end of the generational scale will each move into this age requirement at an accelerated pace year by year.
boomers selloff

Monday, June 27, 2016

Gold will continue to soar because of global financial conditions that go beyond Brexit

Both investors and those people worried about protecting their wealth need to realize that the outlook for gold goes far beyond Friday's Brexit results.  In fact, the referendum for Britain to leave the European Union is more like a Bear Stearns event rather than the 'Lehman Moment' theme saturating the media since it represents the actions of a single entity rather than the overall domino effect that Lehman Brothers was to the global banking system.

And when you couple in the fact that gold had been rising since the very first days of 2016, and is the best performing asset this year in all markets, the expectation for gold to rise much greater is still there because the underlying problems within the global financial system have not gone away simply because of the Brexit.

Expectations for more rallies in gold aren’t just borne from the Brexit news. What happens in other markets, including equities and currencies, will impact gold’s outlook more directly. 
Brexit is “a global monetary event, with destructive effects in individual economies,” said Brien Lundin, editor of Gold Newsletter. 
‘If everyone is trying to depreciate their currency, including the U.S., what can they depreciate it against?’ 
“The standard central-bank prescription is to ease, to depreciate their currency,” he said. 
“But if everyone is trying to depreciate their currency, including the U.S., what can they depreciate it against?” 
“Only gold will stand tall during the turmoil. And over the long term, it won’t because it’s supposed to be a ‘safe haven’, but because it’s the only safeguard against fiat currency depreciation,” said Lundin. - Marketwatch
Prior to Friday's Brexit vote, there was more than $10 trillion in bonds worldwide that have a negative yield, and this will only continue to grow.  This means that trying to find a safe haven in bonds will leave you with less money than you started with at maturity, and opposite the effects if you instead moved your cash into gold.

No, last week's Brexit vote is simply one big warning sign on the road to the next global financial crisis, and just like from 2007-2011, the barometer for this will be the price of gold and not the stock markets, currency markets, or other asset classes.  And if you want to see what the people in the line of fire are choosing, just look at the Brits who are trying to buy gold hand over fist, but are quickly realizing that supplies are quickly becoming unavailable in their local markets.
A British gold broker says sales are at an all-time high since UK voters decided to leave the EU. 
"There has been record online sales on the GoldCore website . . . the phones are ringing off the hook," says GoldCore founder Mark O'Byrne in a news release
On the day Brexit results were announced spot gold popped $70 per ounce peaking at $1,330
Other gold sellers like BullionVault, CoinInvest.com and The Royal Mint all reported a surge in sales
On the same day the Brexit results were announced, "buy gold" Google searches soared 400% in the United Kingdom, according to Google Trends. - Mining.com

Sunday, June 26, 2016

Immediately following Brexit results, google searches to 'buy gold' soared 500% as investors broke towards only real safe haven

One of the primary reasons that gold shot up to $1940 following the 2008 Credit Crisis and subsequent stock crash is because long standing safe havens like currencies, bonds, and real estate no longer provided an outlet during a time of financial crisis.  And while these three asset classes eventually recovered between 2011 and 2016 thanks solely to central bank interventions, when the next crisis or black swan would come as it did on June 24, monetary conditions were so levered up that they once again were unable to act as an outlet or safe haven for one's wealth once the carnage began in nearly all markets.

And this showed up in a most powerful way as immediately following the referendum vote in the United Kingdom to leave the European Union, searches on google for the terms 'buy gold' shot up over 500%.

According to Google, the number of internet searches for the phrase "buy gold" spiked by 500% after the Brexit results trickled through around 5am. Investors flocked to the safe haven asset during Asian trading while the pound plummeted to a 31-year low. 
Today, as is customary after the fact, everyone was euphoric on gold: "gold could rise to $1,400 whilst other precious metals such as platinum, offer attractive fundamentals," said James Butterfill, head of research & investment strategy at ETF Securities. Virtually every other investment bank followed suit and even Goldman came out, when the traditionally goldophobic bank had no choice but to raise its gold price target following today's meteoric gold surge. 
Which is great, however all of it was, as noted,  after the fact. 
The truth as all those who buy gold after the devaluation learn, is that for gold to be a store of value and preserve purchasing power it has to be acquired before some catastrophic, devaluing event, which as yesterday's Brexit showed, tends to be utterly unpredictable. - Zerohedge
Sadly, Americans and most Westerners tend to wait until after the fact to prepare themselves for a crisis, even with days, weeks, or months of advance warning that the disaster was on the horizon.  And whether that crisis occurs from nature, war, financial or any myriad of other inevitable events, those willing to prepare in advance will not only be sufficiently protected before it happens, but will also be able to afford their preparations at much cheaper prices when the sudden rush into commodities like gold leave the majority out in the cold as supplies and prices become out of reach.