Here is the best explanation I’ve seen to date of how the U.S. stock market works. It is from John Jay, who posts regularly in the Rick’s Picks Forum: “The stock market is the primary bag-man the Federal Reserve uses to transfer the U.S. Dollars they create from thin air to the .01%.” Just so. When you consider how many hundreds of billions of dollars find their way into the pockets of the very rich when just a half-dozen mega-cap stocks rally sharply, you begin to understand how the U.S. economy actually works. Full Story
By: Stewart Thomson, Graceland Updates - 12 June, 2019
- Even if the Fed doesn’t cut rates at the July 31 meeting, the market has about six weeks to keep rallying before getting disappointed by the Fed’s decision.
- Also, I would not rule out a rate cut, because the Fed has tended to support the stock market whenever it gets into trouble. The Fed has also tended to support the US government with lower rates when the government wants to borrow a lot of money.
- What about gold? Well, I suggested that investors should brace themselves for a pullback from $1350. That’s clearly in play this week as the stock market rallies. Also, Indian dealers have reduced their buying after the big gold price surge. Full Story
The weekly S&P chart corroborates the bullish EWT perspective. Notice that a divergence between price tops and stochastic tops accurately foretold the devastating selloff that occurred in Q4 of 2018. Currently there are no such divergences in the weekly chart, and I take this as a sign that the long-term uptrend will continue. That could change if the current rally achieves new record highs without generating a higher stochastic peak. But until such time as this occurs, there are no worrisome signs that I can discern in this chart. For a more detailed explanation of stochastic divergences and their relevance to the current technical picture, click here to view my latest Facebook video. Full Story
Gold needs to trade over $1310 for the rest of the month to be in bullish zone. Remain on the sidelines in silver. Demand side doubts is preventing crude oil from a rise. Copper is trying to rise but is in a neutral zone. Nickel could zoom anytime. The next three days very crucial for lead, zinc and nickel. If they are able to rise, then be prepared for a quick ten percent more rise. Full Story
Americans’ trust in institutions, from the federal government to banks to the news media, has been deteriorating for decades. Sixty years ago, three quarters of Americans expressed faith in the government to do the right thing “most of the time” or “just about always.” Today, only one in five people, a near-record low, believes our leaders make decisions in the country’s best interest.
The news media fares just as poorly. A new survey finds that Americans believe “fake news” is a bigger problem right now than violent crime, illegal immigration and terrorism.
Just take a look at the chart below, based on Gallup polling data going back to 1973. Whether it’s newspapers, television news or, more recently, online news, Americans’ faith is steadily eroding... Full Story
Although the first two days of the move had brought the ‘fear indicator’ down somewhat, its failure to budge since then is unusual. Contrarians might argue that this is bullish since it suggests that buyers are holding firepower in reserve. But it’s also possible the VIX has simply got it right and that it has good reason to act worried. Whatever the case, skepticism alone cannot continue to power stocks higher indefinitely. When the last bear has been squeezed bloodless, look out below! Full Story
Trade war is here to stay. There will be profit booking and short selling in gold as long as gold price does not break $1370-$1380 zone. Silver will find sellers on rise as long as it does not break $1520. Silver needs to trade over $1520 for a short squeeze.
By: Chris Waltzek Ph.D., GoldSeek Radio - 10 June, 2019
- Nick Barisheff returns to the show, head of Bullion Management Group (BMG) and author of $10,000 Gold. - BMG announced a new hedge fund for pension funds and accredited investors to prepare investors for financial calamity. - Nick Barisheff cautions investors to prepare for a market deluge rivaling the 2009 crash in depth and severity. - BMG notes that 19 years passed before investors returned to breakeven after the NASDAQ year 2000 dot.com crash. - Investors may never recoup their investments as the meltdown may mark the end of modern financial markets. - Our guest notes a triple-bubble in real estate, US equities and (P/E ratio, Tobin's Q-ratio, margin debt) and bonds. Full Story
China still leads the world in physical gold demand and it is no small number: Year to date 688 tonnes have moved from the vaults of the Shanghai Gold Exchange into the hands of Chinese investors. At that pace, China will have imported over 2000 tonnes of physical gold by the end of the year, an amount equal to 61% of annual global mine production. “Therefore,” says Manly, “2019 is shaping up to be another very strong year for Chinese gold demand as physical gold continues to move from West to East.”
James Grant, the editor of Grant’s Interest Rate Observer, recently delivered a speech in acceptance of the 2019 Bradley Prize in Washington, D.C. He was honored along with two other recipients – The New Criterion‘s Roger Kimball and Judge Janice Rogers Brown. The Bradley Prizes honor scholars and practitioners whose accomplishments reflect The Lynde and Harry Bradley Foundation’s mission to restore, strengthen and protect the principles and institutions of American exceptionalism. The following is an excerpt from that speech.. Full Story
Ecuador just made a big show of support for the nation’s mining industry. The Vice President and Minister of Energy and Non-renewable Natural Resources visited Lundin Gold’s flagship project, where 50 percent of the construction is completed. The officials also presented a new Public Mining Policy that focuses on supporting large-scale operations and investments, and eradicating illegal mining.
The focus on “weak dollar policy” continues from lawmakers. Senator Elizabeth Warren called for “actively managing” the U.S. dollar’s valuation as a part of a plan to create more American jobs. A weaker dollar has historically been positive for the price of gold. President Trump has also been critical of a strong dollar. Full Story
Now it's not just the Fed fighting this battle, it's now all the central banks of the world..."all for one, and one for all." But in the precious metals market, it's mostly three U.S. banks.
The powers-that-be in the U.S. simply cannot allow any significant amounts of the tens of trillions of dollars sloshing around out there to find a home in hard assets, at least not at the moment. And that's why they've been preventing the Big 6 commodities from rising in price in response to an ever-increasing money supply -- and desperate money looking for yield. This is one of their last attempts to prevent that from happening.
They will fail.
And when they do, they will fail spectacularly. Once the run to hard assets begins, there will be no stopping it. And as I've said before on many occasions, that failure will come through either circumstance, or by design. But it is coming. Full Story
It’s hard to believe that the massive H&S consolidation pattern we’ve been following for several years began to develop all the way back in 2013 during the initial crash off the 2011 high. This weekly line chart shows the price action closing this week right on the neckline at 1350. Note how many touches the neckline has experienced from below with each one backing off. Now the question remains, how may bears are left to defend the 2013 neckline? There is a good chance that if they are exhausted that the price action could just spike right through the neckline this time around completing the massive H&S base which would be long term bullish. Big patterns lead to big moves. Full Story
The loss of purchasing power for the U.S. dollar is best illustrated with the chart below that shows the purchasing power of the U.S. dollar vs. gold. For many years the price of the U.S. dollar was relatively stable and $1,000 would buy you more than 50 ounces of gold. Not any more. Today US$1,000 would only purchase roughly 0.75 ounces of gold. Canadian $1,000 would buy you even less, given a rate of Cdn $1 = US$0.745. Cdn$1,000 would buy only about 0.59 ounces of gold.
Despite years of quantitative easing (QE) and record low interest rates coupled with easy monetary policy, economic growth is roughly 20% below the where it was before the financial collapse of 2008. More and more dollars are thrown at the economy, yet all it has generated is lower growth and massive debt. And, like the Roman emperors of the third century, governments are looking for money through their agencies—the IRS, CRA, FACTA, and FINTRAC. Does history repeat itself?
Are investors perhaps counting on U.S. stocks to attract increasing sums of safe-haven capital as the global economic picture darkens? If so, this promises to be a great bet until the day it isn't. Our advice is to lock in 2.57% returns on the 30-Year Bond while you can, since that rate could look pretty juicy when flight-to-safety money from around the world eventually panics into T-bonds, as it inevitably will. Were you aware that T-bond holders can rack up annualized gains of 20% or more when long-term yields fall hard? That's not bad just for playing it safe. Full Story
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