This post was published at Kitco NEWS
98,750,067,000,000 Reasons to Buy Gold in 2018
– World equity index market capitalization touching distance of $100 trillion dollars at beginning of December
– Key indicators across global financial markets are looking decidedly bubble-like
– Little indication that we are through the worst of the financial crisis that started in 2007
– Apparent lack of concern regarding the over-heated and overpriced markets
– Since financial crisis gold has climbed nearly 124% in EUR, 190% in GBP and 98% in USD
– Goldcore’s latest podcast covers gold’s role in 2018 in the land of bubbles
Earlier this week Yahoo! published ‘2017: The year the financial crisis officially ended’. In it the author points to record-high stocks and cryptocurrency surges as some of the key indicators that the latest financial crisis is tightly wrapped up and now destined for the history books.
Sadly we don’t agree. Neither does Bloomberg. At the start of the month two Bloomberg journalists explained why they were ‘worried about 2018’. In simple terms – there are so many bubbles on the horizon its not worth stopping to count them.
This post was published at Gold Core on December 28, 2017.
South Africa’s ruling African National Congress gushed a double whammy of capital-flight-creating rulings this afternoon. The Rand is tumbling on Bloomberg headlines that the ANC is said to seek constitutional changes for land expropriation (from whites) without compensation, but perhaps even more worrisome, the ruling party has decided that the Reserve Bank must be wholly owned by the state:
SOUTH AFRICA’S ANC ECONOMIC COMMITTEE CHAIR GODONGWANA SPEAKS S. AFRICA ANC SEEKS CONSTITUTION CHANGES FOR LAND EXPROPRIATION S. AFRICA’S ANC SAYS LAND EXPROPRIATION MUSTN’T HURT ECONOMY S. AFRICA’S ANC SAID TO DECIDE CENTRAL BANK MUST BE STATE-OWNED
This post was published at Zero Hedge on Dec 20, 2017.
The best performing precious metal for the week was palladium, up 1.71 percent. Automobile replacement was up due to water damaged cars post hurricane season. Catalytic converters containing palladium will enter the recycling phase. A Bloomberg survey of gold traders shows most are bullish on the yellow metal after the Federal Reserve raised rates earlier in the week. This is in part due to gold advancing for the first time in four weeks as the Fed stuck to its projection of three hikes in 2018, writes Ranjeetha Pakiam of Bloomberg. The European Central Bank left its policy rate unchanged, leading Bloomberg Intelligence analyst Mike McGlone to suggest that relative value and mean reversion might lead to gold outperforming bitcoin and the U. S. dollar. Gold counter-intuitively rallied the last five times the Fed raised interest rates, leading some to believe gold has no reason not to rally again. Pure Gold Mining Inc. announced the addition of mineral resources to two of its mines in Ontario. The estimate includes an additional 96,000 ounces of indicated resources and 118,000 ounces of inferred resources. CEO and President of the company, Darin Labrenz, said the addition has ‘strong potential to positively impact project economics.” Weaknesses
The worst performing precious metal for the week was platinum, up just 0.57 percent post the rate hike but not out of favor completely as Sibanye Gold made an all-share takeout offer for Lonmin which has been on the ropes for several years now. The Democratic Republic of Congo changed its mining code again with details still emerging. The last time the nation changed its code it resulted in increased royalties, tax rates, minimum unpaid share of new mining projects and now, for large projects, 10 percent of a mine’s shares must be owned by a Congolese investor.
This post was published at GoldSeek on Monday, 18 December 2017.
Indians are buying silver.
India ranks as the second largest gold consumer in the world, behind only China, but Indians also have an appetite for the white metal. After a drop in silver demand last year, Indians are once again buying.
According to Bloomberg, India has imported around 5,500 tons of silver this year, and imports could grow to around 6,000 tons in 2018. That compares with a four-year low of just 3,000 tons in 2016.
We saw signs of resurgence in the Indian silver market in the fall. According to the Economic Times, silver demand was up 15% during this Dhanteras and Diwali festival season on increased purchases of coins, idols, and silverware. Analysts attributed the surge in silver buying to lack of consumer confidence in the economy and silver’s relatively low price.
This post was published at Schiffgold on DECEMBER 15, 2017.
Cameron and Tyler Winklevoss, thought to be the world’s first confirmed bitcoin billionaires, said, during a Bloomberg TV interview this morning that the advent of futures is just the beginning of a phase of greater acceptance for the cryptocurrency that is often derided as a bubble.
“We think it’s the starting gun to a whole new phase of liquidity and price discovery and sophisticated entrance to the market.”
As a reminder, the Winklevoss twins are co-founders of the Gemini exchange, which Cboe Global Markets Inc. is using as the basis for the daily settlement for the bitcoin futures that began trading this week.
This post was published at Zero Hedge on Dec 12, 2017.
“They never open their mouths without subtracting from the sum of human knowledge.”
Thomas Reed (R-Maine)
Bloomberg had economist Art Laffer, of the eponymous Laffer Curve, talking up the GOP ‘Tax Reform’ bill in all its ‘trickle down’ glory. I did not even know this retrograde nonsense peddler was still around, having been discredited in his economic theory of top down stimulus rebranded as ‘supply side economics’. Now we know just how bad for the people this new tax legislation may be.
The last refuge of a scoundrel is Art Laffer.
Can a credibly accused and completely unrepentant sexual predator with a penchant for the underaged be elected to the US Senate? We may find out the answer to that tomorrow. Could be a new low for manners and morals, and a new high for political hypocrisy, which these days is really saying something.
I was listening to a citizen of that state in question providing an argument for the reasonableness of the age of consent to be 13, as it was in the good old days. PR-wise the election may be a seminal event for Brand Alabama.
Most likely the Russians are to blame. And Wikileaks. Certainly it is not due to any failing on our parts. We are exceptional.
This post was published at Jesses Crossroads Cafe on 11 DECEMBER 2017.
Mike Gleason: It is my privilege now to welcome in Michael Pento, President and founder of Pento Portfolio Strategies and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U. S. Debt Market. Michael is a well-known and successful money manager and has been a regular guest on CNBC, Bloomberg, Fox Business News, and also the Money Metals Podcast, and shares is astute insights on markets and geopolitics from the perspective of an Austrian School economist’s viewpoint.
Michael, welcome back. Thanks for joining us again and how are you?
Michael Pento: I’m doing fine. Thanks for having me back on Mike.
Mike Gleason: Well, Michael, you focus a lot on the bond markets. Let’s talk for a minute here as we begin about the bubble that has been created and maintained there, and then we will get into the potential ramifications for precious metals. I was researching this morning and the yield on the 10-year Treasury note was 2.242% on December 20, 2015, just after the Federal Reserve made the first rate hike in the current cycle of raising the Fed funds rate. Today, the 10-year yield is 2.327%, a tiny increase from two years ago, so the yield has barely budged despite the funds rate ratcheting up a full percentage point higher. Now, the funds rate isn’t directly tied to Treasury yields, but shouldn’t this tightening be translating to higher yields? Why is that not happening?
Michael Pento: What a great question to start off the show. So, I’ll just dovetail on what you just said and say that in the beginning of 2017, the yield on the 10-year note was 2.4%, or just around that level. Now, as you said, it’s 2.32%. So, there’s a very good reason for why this is happening because the long end of the bond market is concerned with inflation and if the Fed is hiking rates from pretty much zero to one and a quarter percent as we sit today, the effective Fed funds rate is just a little bit above 1%, that doesn’t mean that the yield should go higher on the long end of the yield curve. Actually, what that does mean, is that the Fed is vigilant, for now at least, on fighting inflation.
This post was published at GoldSeek on 11 December 2017.
The Federal Reserve is widely expected to nudge interest rates up again this week. Most analysts agree that the specter of a rate hike is one of the primary reasons gold has slumped over the last several weeks. But are rising interests rates really bad for gold?
The short answer is no. At least not historically
Conventional wisdom holds that tighter monetary policy tends to increase bond yields and boost earnings. That makes and bonds more appealing to investors, theoretically lowering the appeal of gold and silver. So, when the Fed starts talking rake hikes, the air generally comes out of the precious metals markets.
But consider this: the Fed started raising interest rates two years ago. With the rate a full 100 basis points higher than it was in December 2015, gold is trading at nearly $200 per ounce higher than it was then. That’s more than a 15% increase.
As a recent Bloomberg article pointed out, when it comes to rate hikes and gold, the reality tends to be sell the rumor, buy the fact.
This post was published at Schiffgold on DECEMBER 11, 2017.
There are some well-kept secrets in the financial world. For example, there’s the identity of the person or people who designed Bitcoin under the pseudonym, Satoshi Nakamoto. Then there’s the identity of the parties responsible for the frequent dumping of billions of dollars of gold futures contracts on to the market without regard for maximising price. Another one is Warren Buffett’s successor as Chief Executive Officer Berkshire Hathaway.
Besides his advancing years, he’s 87, there are other signs that curtain is coming down on the era of the world’s most successful investor. As we noted in August in ‘The Value Of Lunch With Warren Buffett Plunges 22%’.
The winning bidder in legendary investor Warren Buffett’s annual charity auction has pledged $2.68 million for the privilege of eating lunch with the billionaire investor… While the sum is far greater than the $25,000 paid in 2000 – the first year Buffett held the fundraiser – it’s about $800,000 shy of the record sum of $3,456,789 paid in 2012 and 2016.
By his own admission, Buffett has also found it increasingly challenging to find ‘value’ in keeping with his investment style which he modelled on an earlier doyen of value investing, Benjamin Graham. That’s not Buffett’s fault, it merely reflects the longevity of the latest iteration of central bank bubbles.
This post was published at Zero Hedge on Dec 7, 2017.