Max and Stacy discuss Democrats not looking forward to Hillary’s ‘blame everyone but herself’ book tour. In the second half Max interviews Wolf Richter of WolfStreet.com about the never ending Trump surge in the markets.
Max and Stacy discuss Democrats not looking forward to Hillary’s ‘blame everyone but herself’ book tour. In the second half Max interviews Wolf Richter of WolfStreet.com about the never ending Trump surge in the markets.
We discuss the narcissism of central banks holding $15 trillion in their own assets. We also discuss Morgan Stanley saying that some of their investors see Bitcoin as a better hedge to inflation than gold. Max continues his interview with Dan Collins of TheChinaMoneyReport.com to discuss the looming trade war between the US and China, and the mountain of US treasuries owned by China.
We discuss the Trump administration starting some trade wars – from renegotiating Nafta to looking at China’s treatment of ‘intellectual property’. We also discuss the trillions in unexploited mineral resources in North Korea. In the second half Max interviews Dan Collins of TheChinaMoneyReport.com to discuss the ‘Doklam Transgression’ and the ‘Line of Actual Control’. The media has largely ignored the confrontation between India and China but will they notice if a hot war breaks out?
– Gold surges as N. Korea fires ballistic missile over Japan
– Safe haven buying sees gold break out to 10-month high after Jackson Hole and rising North Korea risk of attack on Guam
– South Korea’s air force dropped eight MK 84 bombs near Seoul; simulating the destruction of North Korea’s leadership
– Gold rises from $1,291 to $1,325; Silver surges 3.2% from $17.05 to $17.60
– Volatility as seen in VIX surges as stocks fall; FTSE -1.1%
– Yen rises in short term but no safe haven in long term with gold haven risen 9.8% per annum in JPY (see chart)
– Gold was moving higher after Jackson Hole and had broken through crucial $1,300/oz level
– Asian geopolitical risk allied to U.S. political instability increasing safe haven bid
– $20 trillion U.S. debt ceiling storm looms
Editor: Mark O’Byrne
This morning the price of gold has rallied to its highest point since the Trump’s election. North Korea’s firing of a missile over Northern Japan which landed in waters off Hokkaido in the Pacific, has sharply escalated tensions in the Korean peninsula and in Asia.
This latest move by Kim Jong Un was intended to show that an attack on Guam is possible at any time, according to North Korea’s Mun-hwan.
Source: Yonhap via ZeroHedge
There had previously been concern that the war of words between Trump and Kim Jon-Un would result in others getting caught in the crossfire. This was confirmed this morning when Japan was made a clear target.
“North Korea’s reckless action is an unprecedented, serious and a grave threat to our nation”
– Japanese Prime Minister Shinzo Abe
Immediately after the missile launch was detected the Japanese government’s J-Alert system interrupted radio and TV to warn citizens of the possible missile and urged them to take refuge in solid buildings or underground shelters. Bullet train services were temporarily halted and warnings went out over loudspeakers in towns in Hokkaido.
Important Guides
For your perusal, below are our most popular guides in 2017:
Essential Guide To Storing Gold In Switzerland
Essential Guide To Storing Gold In Singapore
Essential Guide to Tax Free Gold Sovereigns (UK)
Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
As we transition from August to September within the course of this trading week, we very well could have just experienced the Black Swan event over the weekend, and its name is Harvey. Gold & silver are breaking out right now, and the dollar, well, look out below…
After spending last week in “consolidation”, the metals are already making their moves.
We have been saying a move is imminent for weeks now, and while we have not seen the rises we have seen set up on the charts, we have not seen the big drops either, and this consolidation looks exhausted considering the lack of any on the year.
The smashing of late have had little effect on the gold price and silver price in the short term. Yes, they have been able to knock down prices, as evidenced by last Friday, but the prices have not stayed down for long.
On the daily, gold looks to be holding up and ready to punch through the stout resistance:
$1300 has acted as resistance, or the line in the sand, three times so far in 2017. The battle is not finished there, however. Going back a year, we can see that gold could have some more trouble in the $1310 – $1315 range. What we should really be hoping for is a break-out through that level, then coming back to bounce off it if we must. For this week, however, I guess we could settle for a close above $1300, but at this point, we should really be expecting more, unless the smashing will continue. There was calm overnight and no sneak attacks.
Silver is fighting resistance of its own:
– Gold set to shine as Washington stumbles
– “Bet on gold’s diversifying properties rather than political stability”
– World’s largest asset manager believes Trump and political drama in the U.S. means gold likely to rise
– Real rates flattening out and rising political instability – Blackrock’s Koesterich
– “For now my bias would be to stick with gold” – Blackrock
– U.S. debt ceiling issue to be fractious as bankrupt U.S. hits $20 trillion debt
– Investors will again turn to gold in coming political strife
“For now I would prefer to bet on gold’s diversifying properties rather than political stability” – Russ Koesterich, Blackrock.
Not for the first time this year, Blackrock’s Koesterich has spoken about his faith in gold during times of both financial and political instability.
Those times are now, the world’s largest money manager believes. Since the beginning of the year Koestrich has been adding to the gold position of the $39bn Global Allocation Fund. Gold is now the fund’s second-largest position.
Gold’s performance, up 12% year-to-date, is particularly interesting. A hard-to-define asset, gold is often thought to perform best when either inflation and/or volatility is rising. This year has been notable for both falling inflation and record low volatility, raising the question: What is powering gold’s ascent and can it continue? Two trends stand out:
Real rates have flattened out
Political uncertainty has risen
Gold is most correlated with real interest rates (in other words, the interest rate after inflation), not nominal rates or inflation. While real rates rose sharply during the back half of 2016, the trend came to an abrupt halt in early 2017. U.S.10-year real rates ended July exactly where they began the year, at 0.47%. The plateauing in real yields has taken pressure off of gold, which struggled in the post-election euphoria.
Important Guides
For your perusal, below are our most popular guides in 2017:
Essential Guide To Storing Gold In Switzerland
Essential Guide To Storing Gold In Singapore
Essential Guide to Tax Free Gold Sovereigns (UK)
Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Trump Presidency Is Over – Bannon Is Right
“‘The Donald’ has been White House-broken,” writes Bill Bonner in his must read daily missive on Bonner and Partners
“‘The Donald’ has been White House-broken,” was what we were trying to say, translating the phrase into something that may make sense to a French listener.
But it was too clever and complicated.
“Well, let’s just say the president has been brought into line,” we simplified.
Social Season
This is the social season in the French countryside.
Weddings, cocktails, receptions – people use the month of August to reconnect with friends before returning to work, school, and retirement in the fall.
Yesterday, we drove about a half hour over country lanes to a gracious 18th-century farmhouse. There, about 100 people had gathered on the lawn.
“You are American?” we were asked several times. “What do you think of Trump?”
We dodged as best we could. Inevitably, we were forced to explain that, yes, he is a disgrace… but, no, we would not prefer Ms. Clinton… and, no, we do not like [French president] Mr. Macron, either:
“None of them has the strength or independence you would need to buck the trend.”
“What trend is that…?”
“Oh, it’s a long story… and it is such a beautiful evening…”
The guests were a wide assortment of local farmers and Paris-based hedge fund managers. The former complain about the weather. The latter complain about the markets. Both complain about the government.
But here at the Diary… we don’t complain. We just want to know when to pack an umbrella.
Payoffs and Pimping
Yesterday, we looked at how Washington insiders have brought President Trump to heel.
He said so himself: “Decisions are much different when you sit behind the desk in the Oval Office.”
Many people believe the White House elevates its occupants so they become better people and make better decisions.
Candidate Trump may be a scoundrel or a scalawag, lusting for fame and fortune, when he announces his candidacy, they say. But when he enters the White House, the slime, incompetence, and corruption are washed down the drain. The man is born again… as POTUS.
If this were true, the Pennsylvania Avenue sewer would clog up after each election. Instead, it runs clear… because the wheeling and dealing… the payoffs and pimping… are still going on!
Alas, the White House elevator goes in both directions.
This week, President Trump hit the “down” button. Against his own “instincts”… reneging on his promises to the people who voted for him… he agreed to go along with the generals in their plan to kill more people… and spend more money… so as to make their crony friends richer and advance their own careers.
That is how things work in the “swamp.”
Today and tomorrow, we connect the dots back to the financial world.
End of an Era
Win-win deals increase prosperity. Win-lose deals reduce it.
The swamp is where the win-lose deals breed. Since the 1970s, it has grown to cover half the U.S. economy.
There, wasteful spending, stifling regulations, phony money, misleading financial signals, zombies – corporate and individual – and all the many excesses and absurdities we watch daily here at the Diary are warping honest price signals, destroying real output, and transferring real Main Street wealth to the swamp’s insiders.
Donald J. Trump promised to pull the plug. But he couldn’t even if he wanted to. And now his decisions are Oval Office decisions… that is to say, those that suit the Deep State.
He cannot drain the swamp; he is now a part of it.
There will be no cutback in domestic spending (no genuine or important reform of O’care, for example)… and no cutback in the empire’s wars abroad.
That still leaves the possibility of tax reform. But even that is extremely unlikely. The last major tax reform program was 35 years ago. The president has neither the political skills nor the ideological commitment needed to pull off another one.
No “skinny budget”… no spending cuts… no tax reform… no relief from the swamp.
And that, friends (and we don’t have to spell it out), is why Breitbart’s Steve Bannon is right: The Trump presidency is over.
Where to next?
Tune in tomorrow…
Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America’s most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.
Gold Prices This Week (LBMA AM)
25 Aug: USD 1,287.05, GBP 1,003.90 & EUR 1,090.90 per ounce
24 Aug: USD 1,285.90, GBP 1,003.26 & EUR 1,090.44 per ounce
23 Aug: USD 1,286.45, GBP 1,004.33 & EUR 1,091.68 per ounce
22 Aug: USD 1,285.10, GBP 1,000.71 & EUR 1,091.95 per ounce
21 Aug: USD 1,287.60, GBP 999.82 & EUR 1,096.52 per ounce
Silver Prices This Week (LBMA AM)
25 Aug: USD 17.02, GBP 13.26 & EUR 14.40 per ounce
24 Aug: USD 16.93, GBP 13.20 & EUR 14.36 per ounce
23 Aug: USD 17.06, GBP 13.32 & EUR 14.48 per ounce
22 Aug: USD 17.02, GBP 13.27 & EUR 14.48 per ounce
21 Aug: USD 17.02, GBP 13.20 & EUR 14.48 per ounce
Market Updates This Week
– The Truth About Bundesbank Repatriation of Gold From U.S.
– Mnuchin: I Assume Fort Knox Gold Is Still There
– Buffett Sees Market Crash Coming? His Cash Speaks Louder Than Words
– Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High
– Must See Charts – Gold Hedges USD Devaluation, Rise in Oil, Food and Cost of Living Since Nixon Ended Gold Standard
– World’s Largest Hedge Fund Bridgewater Buys $68 Million of Gold ETF In Q2
Important Guides
For your perusal, below are our most popular guides in 2017:
Essential Guide To Storing Gold In Switzerland
Essential Guide To Storing Gold In Singapore
Essential Guide to Tax Free Gold Sovereigns (UK)
Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Cap the metals they may. Smash the metals they may. Save some ammo for another day, cause Gold & Silver didn’t come here to play. We are the Sultans of Price Swing…
Gold & silver have been on tight lockdown all week. After gold punched through $1300 on Friday, August 18th, both metals have been range-bound and capped ever since:
Furthermore, we have been monitoring the daily chart all year, and noticing, especially with silver, that there has been very little to no consolidation. However, all that has changed this week:
The MSM will be quick to point out a healthy “consolidation”, “basing”, or however they would like to spin it, but one look at that chart and we know exactly what it is: Fierce capping of price ahead of the Fed’s Jackson Hole Keynesfest.
The “consolidation” is pronounced in gold as well:
Of course, we can rest assured that the battle for $1300 will not be pretty. This is the third defensive stance by the market manipulators this year. After the April and June gold offensives, maybe we took for granted “third time’s a charm”, and now we are finding out that since June, they have been hardening their defenses.
And then, of course, today happened. Gold and silver caught a bid, and gold popped above $1300 at 9:17 a.m:
(No, that’s not the elusive yet uber-bullish “Loch Ness Chart Formation”, that doesn’t happen in the metals. That is the “Cue the Fat Finger Chart Formation”)
Then, 23 minutes later, the smash began, and one minute later, for one minute, between 10:41 a.m. and 10:42 a.m., 21,135 gold futures contracts were dumped on the COMEX.
– Bundesbank has completed a transfer of gold worth €24B from France and U.S.
– Germany has completed domestic gold storage plan 3 years ahead of schedule
– In the €7.7 million plan, 54,000 gold bars were shipped and audited
– In 2012 German court called for inspection of Germany’s foreign gold holdings
– Decision to repatriate from Paris and New York was ‘to build trust and confidence domestically’
– 1,236t or 37% of German holdings remain in New York Fed facility
– Bundesbank wants to hold gold bullion
– U.S. government declines to audit gold reserves … doesn’t want world to realise gold’s importance in the global monetary system
Editor: Mark O’Byrne
Last Monday, U.S. Treasury Secretary Mnuchin feigned to inspect the U.S. gold reserves in Fort Knox and joked flippantly that he assumed it was there.
A day later the Bundesbank, announced that they had repatriated much of their gold reserves from the U.S. and France. Coincidence or coordination?
In 2013 the Deutsche Bundesbank announced plans to store half of its gold reserves in Germany. At the time, only 31% was stored in the country. The Gold Storage Plan involved bringing gold home from both Paris and New York.
The plan was expected to take seven years. At the time many asked why it would take so long to return just 674t of gold. The Bundesbank has completed the plan three years ahead of schedule.
The German gold repatriation was in response to the critics and or in order to safeguard the German gold reserves and ensure they are owned in a safe, allocated and segregated manner by the Bundesbank.
In the last five years the German central bank has 374t and 300t from Paris and New York, respectively. The Bundesbank opted to keep 432t in the Bank of England vaults.
Whilst the tables above (from the Bundesbank) show the repatriation of gold was ultimately successful, it has promoted much discussion about the security of gold in central banks.
The decision to move the gold back to home soil has also vindicated many who have long argued about the murky gold reserve dealings of the United States.
Important Guides
For your perusal, below are our most popular guides in 2017:
Essential Guide To Storing Gold In Switzerland
Essential Guide To Storing Gold In Singapore
Essential Guide to Tax Free Gold Sovereigns (UK)
Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Spanish conquistador, Herman Cortes, once opined that the Spanish had “a sickness of the heart that only gold can cure.” Do today’s gold investors also have a sickness of the heart that only a rising fiat exchange price can cure? And is bitcoin’s charm standing in the way of that cure? Craig Hemke of TFMetalsReport.com says that gold and bitcoin complement each other and those gold bugs hating on the cryptocurrency sector have got it wrong. But will gold rise again? Hemke says watch out for $1320 and then maybe the sickness at the heart of the gold investor community will be cured.
Click this image to listen!
Click on image above, or here, to listen to the podcast.
– U.S. Navy collisions: More than a coincidence?
– Latest U.S. Navy collision is fourth involving a Seventh Fleet warship this year
– Have US Navy vessels become victims of hacking asks Rickards
– Chief of Naval Operations, Adm. John Richardson, has not ruled out cyber intrusion
– “Once is happenstance. Twice is coincidence. The third time it’s enemy action…” – Ian Fleming
– Cyber security cause for concern in autonomous vehicles, aeroplanes and now ships
– Serves as reminder that a connected world can expose and create vulnerabilities
– Cyber security a major threat to banking and financial industry
– Investors should hold physical gold as insurance against hacking, cyber attacks
Source: Navylive
The tragic U.S.Navy incident of the USS John McCain earlier in the week has raised several questions about the cause. Many are wondering if it was more than human error given this is not an isolated incident.
In the last year there have been four collisions in the area, including the latest one. So far in 2017, 17 US sailors have died in the Pacific southeast in events which have been attributed to accidental collisions with civilian vessels.
Pentagon and intelligence insider Jim Rickards points out “when the same basic incident happens twice, you have to raise your eyebrows. When you have a low-probability event that happens twice, in other words, the likelihood of coincidence becomes infinitesimal.”
"Once is happenstance. Twice is coincidence. The third time it's enemy action." – Ian Fleming
Four 7th Fleet collisions in one year. pic.twitter.com/vKbFWPAAsr— Jim Rickards (@JamesGRickards) August 22, 2017
Rickards and others are wondering if the Navy’s decades-old reliance on old electronic guidance systems has become the victim of multiple cyberattacks.
There are two main ways a hacker can interfere with a warship: by attacking its GPS or a malware attack on its computer network.
Important Guides
For your perusal, below are our most popular guides in 2017:
Essential Guide To Storing Gold In Switzerland
Essential Guide To Storing Gold In Singapore
Essential Guide to Tax Free Gold Sovereigns (UK)
Please share our research with family, friends and colleagues who you think would benefit from being informed by it.
Successful adaptation requires a willingness to accept the risks of experimentation, innovation, flexibility and failure.
The idea that the pace of change in technology, the economy and society is accelerating is increasingly self-evident. That this acceleration exceeds our built-in ability to adapt to change is the thesis of the influential 1970 book Future Shock: as the pace of change accelerates, we can no longer process the transformative circumstances and enter a sort of brain-freeze/shut-down mode.
I discussed this most recently in Future Shock and the Greening of America (June 19, 2015) and Present Shock and the Loss of History and Context (May 22, 2013).
My insightful Facebook friend/correspondent A.A. recently proposed another reason why we’re failing to adapt to rapid, systemic change: we have grown too accustomed to affluence and comfort and have consequently lost the tools and values required to adapt to rapidly changing circumstances.
The stage is set and the music is blaring the tune “Immediate price surge”
Haven’t seen the charts this bullish in the short term for a while, and haven’t felt this bullish in a while either. The bears do look like they could be in for a shocker as things are shaping up nicely. It is hard to argue against a price surge, but I suppose anything is possible.
The Gold Price is ready for another shot at $1300 based on the chart painting. The yellow metal has been holding in there:
For the better part of the year, the price of gold has been stuck in that sideways channel of, call it, $1220 and $1300. Well, there is just not much room left to float sideways on the daily chart. We are right up against the resistance line. What looks nice in the short term, is that when gold punched through $1300 last Friday, it drifted sideways to the support line of the upward sloping channel. That chart formation is going to have to break down as gold breaks out, and that break out is above the massive resistance at $1300.
