7 Reasons Why Stocks No Longer Care About Political Shocks, And 2 Why They Should

Why do global equity markets ignore political shocks like Brexit, President Trump’s election or the news that Angela Merkel failed to form a government in Germany? There are plenty of good reasons, actually, which we review below.
News that German Chancellor Angela Merkel failed to form a new government was the big shock of the day. It is unclear if the country will have a minority coalition or call fresh snap elections. The New York Times quoted a Der Spiegel deputy bureau head as saying ‘This is Germany’s Brexit moment, its Trump moment’.
Capital markets agreed with the Trump/Brexit comparison, sending the DAX up 0.5% on the day. Every other major European bourse closed in the green as well. As did the US.
All of this got us thinking (again) about why stock markets ignore politics and government when it comes to ‘Crisis moments’. It wasn’t too hard to come up with several explanations.
Reason #1: The Brexit vote and Trump election are fresh in investors’ minds, and they feel they know the ‘Crisis playbook’ well at this point. Buy any notionally negative political headline first, look for the silver linings later. Muscle memory is a powerful behavioral force.

This post was published at Zero Hedge on Nov 21, 2017.

“Foundation For A Rebound?” – Gold Jumps Above Key Technical Level On Heavy Volume

The last 3 days have been ‘nosiy’ in precious metals markets with gold swinging from the best day in 5 months to the worst day in 4 months and now to another high volume surge, breaking the barbarous relic back its 100-day moving-average…

It sems the 100DMA is a key level with heavy volume being used to push gold futures around it.
UBS asks “Is gold establishing a foundation for a rebound?”
Gold longs rebuild while shorts continue to hesitate
Gold is holding reasonably well near the highs of the range established in the past couple of months. A few macro factors have been supportive of late:

This post was published at Zero Hedge on Nov 21, 2017.

Yield Curve Carnage Continues

The US Treasury yield curve collapse continued its unending path to inversion overnight with 2s10s plunging to sub-60bps and 5s30s hits a 65bps handle for the first time since Nov 2007.
2s10s has flattened for 3 days straight, 6 of the last 7 days, and 14 of the last 17 days to a 58bps handle…
5s30s has flattened 3 days straight, 6 of the last 7 days, and 16 of the last 19 days to a 65bps handle…

This post was published at Zero Hedge on Nov 21, 2017.

Doomsday Preppers Are Switching From Gold To Bitcoin

The gold versus Bitcoin debate is complex, nuanced and still in its embryonic stages when put into the perspective of gold’s known 2,700-year use as money versus Bitcoin’s very modest eight-year track record.
From a pure investment perspective, as the following Bloomberg chart shows, Bitcoin has obviously ‘wiped the floor’ with its esteemed rival and, no doubt, has absorbed a considerable volume of funds that otherwise might have found their way into gold investments.
One subset of gold investors, which is both over-stated and over-ridiculed in the mainstream media, is the ‘preppers’, or those preparing for a catastrophic disaster to occur in the future by stockpiling food, ammunition and ‘durable’ methods of storing their wealth, etc. We clarify the term “preppers” because it is not common parlance in many European countries. While some allocation in gold was basically ‘de rigeur’ some years ago, the prepping community is increasingly turning to Bitcoin, as Bloomberg reports.

This post was published at Zero Hedge on Nov 20, 2017.

New Gold-Backed Debit Card Launched In Partnership With MasterCard

In recent years, there has been a major debate about the respective merits of gold versus Bitcoin, even though many, not all, gold bulls are also supporters of the latter. Gold advocates generally view favourably Bitcoin’s inherent characteristics of decentralisation, finite supply and ability to operate (so far) outside of the usual interference by western central banks. Having said that, the launch of Bitcoin futures on the CME in the coming weeks could lead to naked shorting of ‘paper Bitcoin’ by any parties, including central banks and large commercial banks, who deem capping of the Bitcoin price necessary. As we discussed last week in “Financial Times: Sell Bitcoin Because The Market Is About To Become “Civilized”, this could align Bitcoin with one of the major issues which has held the gold market hostage for years, time will tell.
While many gold investors remain entrenched in the view that gold will (eventually) prove to be the better store of value, one thing many would acknowledge is that Bitcoin is likely to evolve into a superior means of payment. However, that could be in the process of changing.
A fintech start up is partnering with some financial heavyweights to create a payments system backed by physical – not paper – gold. According to the Financial Times.
The world’s oldest currency is being brought into the digital age with the launch of a debit card and app that will allow people to pay for goods in gold. Fintech group Glint has teamed up with Lloyds Banking Group in the UK and MasterCard to create an app that enables people to load credit in various currencies, which can then be used to buy a portion of a physical gold bar. Customers use the app at the checkout to select whether to pay in a currency or gold, before transacting with their MasterCard.

This post was published at Zero Hedge on Nov 21, 2017.

Inflation and Gold – Precious Metals Supply and Demand

Reasons to Buy Gold The price of gold went up $19, and the price of silver 42 cents. The price action occurred on Monday, Wednesday and Friday though so far, only the first two price jumps reversed. We promise to take a look at the intraday action on Friday.
But first, we want to clarify something in light of our ongoing commentary about the struggles of the debtors and the lack of drivers for rising consumer prices. Just because farmers and restaurateurs are frantically producing and selling like mad, which results in soft prices, does not mean that people cannot begin to buy gold in earnest again.

This post was published at Acting-Man on November 21, 2017.