Gold Standard News Daily - Real Money Blog
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10.13.15 - GOLD SHINES IN BEAR MARKETS
Gold last traded at $1,164 an ounce. Silver at $15.86 an ounce.
NEWS SUMMARY: U.S. stocks slumped Tuesday, following downbeat China data, as investors await corporate earnings and economic reports. Meanwhile, the U.S. dollar drifted lower and precious metal prices inched higher.
Gold May Shine in Next Bear Market -Merk Investments
"While some continue dancing, the music might have already stopped: are we already in a bear market in stocks? In this context, we study past bear markets to see whether gold may serve as a valuable diversifier for what's ahead....A key reason we look at gold as a diversifier is because of its low correlation to the equity markets....When all is said and done, over the past 45 years, the correlation between the price of gold and the S&P 500 is zero....During the five equity bear markets, an investment in gold came out ahead in four of them.... In fact, given the run-up in equity prices in recent years, we wouldn't be surprised if the looming bear market, if it indeed becomes one, will last at least as long as historic bear markets. Got gold?"
We agree with Axel Merk - you can bank on the 80/20 principle regarding gold prices rising during stock bear markets. But regardless of whether gold prices rise or remain steady, we believe gold plays and important role in every portfolio, 100% of the time! To find out why, read Read The Timeless Truth About Gold & Silver.
The Mindless Stupidity of Negative Interest Rates -Wall Street Examiner
"Here we are in the midst of The Great Stagnation Middle Class Elimination and some central bankers and mainstream economists are promoting negative interest rates....The move to negative rates imposes new costs on the banks, unlike low positive rates or ZIRP which reduce bank costs....As opposed to stimulating growth, the European banking system shrinks. As opposed to encouraging borrowing and spending and economic growth, the policy encouraged deleveraging....We know that it is categorically false the negative rates are working in Europe. But facts have a way of eluding mainstream economists and central bankers....How can anything positive come from this?" To learn more about why negative interest rates will not work at reviving Europe's economy, read The Biggest Bank Heist in History.
Where Will Next Fed 'Helicopter Money' Drop Land? -Daily Reckoning
"So what’s left in the toolbag of central banks and states to stimulate recessionary economies if QE has been discredited? The answer: Helicopter Money....This monetizing of state debt by the central bank is the engine of helicopter money. When the central state issues $1 trillion in bonds and drops the money into household bank accounts, the central bank buys the new bonds and promptly buries them in the bank’s balance sheet as an asset....So where will the first drops of helicopter money land? How about the student loan Titanic, which is already bow down after hitting the iceberg of reality? Or how about some big fat tax credits, politicos’ favorite form of helicopter money?" What will the next round of Fed stimulus do to the U.S. dollar? Read What's Next For The Dollar?
6 things to watch at the CNN Democratic debate -CNN
"Five Democratic presidential candidates are about to try their luck at the first Democratic debate of the 2016 election in Las Vegas on Tuesday night (at 8:30pm ET). But the spotlight is largely on two: former Secretary of State Hillary Clinton and Vermont Sen. Bernie Sanders. The former secretary of state needs to remind viewers of the debate sponsored by CNN and Facebook about why she began the year as the overwhelming front-runner and is best able to take the torch from President Barack Obama. Sanders has the opportunity to prove to millions of voters why a 74-year-old self-described democratic socialist can take on both Clinton and Republicans....Here are CNN's six things to watch in Tuesday night's debate: Can Clinton flip-flop gracefully? ... The emails: Will anyone go there? ... Trump: Democrats' favorite punching bag? ... Feel the Bern ... Which Clinton shows up? ... Is this Martin O'Malley's only chance?" This first Democratic debate should be entertaining as progressive socialists go head-to-head to see who can promise the most goodies to half the population already receiving some form of government assistance.
10.12.15 - BANKS BOOST RESERVES, SHOULD YOU?
Gold last traded at $1,164 an ounce. Silver at $15.86 an ounce.
NEWS SUMMARY: U.S. stocks traded near flat Monday in thin, Columbus Day holiday trading. Meanwhile, precious metal prices extended gains as the U.S. dollar weakened on the rising likelihood of Fed rate hike delays.
Gold Rises to Seven-Week High -Bloomberg
"Gold advanced to the highest in seven weeks, boosted as investor confidence in the dollar waivered amid doubts U.S. interest rates will rise this year. Bullion advanced in three of the past four weeks, rebounding from a five-year low in July, on speculation that the Federal Reserve will refrain from tightening monetary policy until next year. The chances of a rate liftoff in December fell to 39% on Monday, from 59% a month earlier, futures data show. While Fed Vice Chairman Stanley Fischer said on Sunday the U.S. economy may be strong enough to merit an increase by year-end, dollar investors shrugged off his comments as a gauge of the U.S. currency touched a three-week low." Now is the time to convert dollars into precious metals - while prices are still near 5-year lows. Read The Timeless Truth About Gold & Silver.
US banks have been 'nationalized' -CNBC
"A transportation bill in Congress has put the U.S. well on the road to socialism, Dick Bove said Monday. The bipartisan Senate bill, announced in July, would cut the dividend paid by the Federal Reserve to banks each year from 6% to 1.5%, and the difference would go toward funding highway projects. 'The government has taken the position that, because they offer FDIC insurance, they have the right to invade banks,' Rafferty Capital Markets' vice president of equity research told CNBC's 'Squawk Box.' 'Unfortunately, I believe the banks have been nationalized; I believe we're well on the road to socialism in terms of the way we're taking money flows out of the banking system and putting it into highways,' he said."
Indeed, our great nation and economic system is on the road to socialism, as covered in DON'T BANK ON IT! ... In America today, almost no enterprise is more regulated than banking. And every regulation is one more pressure point – choke point, if you will – that can be pressed to extort from banks whatever Progressive politicians desire. (page 184)
US banks build defenses against downturn -FT.com
"Wall Street’s biggest banks are beginning to build their defenses against downturns, signalling an end to the steady thinning of reserves that has helped boost profits in the past five years. Tapping into reserves set aside for bad loans has become a reliable source of income for the banks in the post-crisis environment, allowing them to offset the effects of weak demand and ultra-low interest rates. Regulators let lenders dip into reserves in this way if they can argue that an improving outlook makes losses less likely....Sectors such as construction and certain classes of multifamily mortgages, for example, look vulnerable to reserves increases, as the reported credit quality is 'simply too good to be believed - or sustained,' said Chris Whalen, senior managing director at Kroll Bond Rating Agency in New York. 'When valuations for commercial and residential assets are rising faster than income or GDP, and loan-to-value ratios are rising as well, the only certainty is that the prices will not be maintained,' he said." Today's housing boom appears too good to be true. Big banks are adding reserves to cover loans that could default in the next downturn. Now is a good time for citizens to boost reserves also, before Fed-created assets bubbles begin to pop. Read more in The Biggest Bank Heist in History.
Greek Cash Ban Escalates: 'Permanent' Stricter "Capital Controls" -Zero Hedge
"In a stunning move towards the elites' endgame of 'banning cash', Greek authorities unveiled stricter capital controls for civil servants and pensioners this weekend. By drastically limiting cash withdrawals and forcing the more 'controllable' compulsory use of plastic money, Greek authorities hope to stop tax evasion through the use of 'fake cash registers'. A shock-measure: civil servants and pensioners will be subject to stricter capital controls than the rest of the Greeks. They will be able to withdraw only €150 per week – with the cash withdrawal cap being €420 per week – that is a total of €600 per month. The rest of their wage or pension they will have to spend by using debit or credit card."
Indigenous Peoples Day and Columbus Day -Fox5NY
"More cities are recognizing Native Americans on Columbus Day this year as they revive a movement to change the name of the holiday to celebrate the history and contributions of indigenous cultures around the country. As the U.S. observes Columbus Day on Monday, it will also be Indigenous Peoples Day in at least nine cities for the first time this year, including Albuquerque; Portland, Oregon; St. Paul, Minnesota; and Olympia, Washington."
10.9.15 - THE SECRET RECESSION
Gold last traded at $1,155 an ounce. Silver at $15.81 an ounce.
NEWS SUMMARY: U.S. stocks traded mixed Friday as traders digested the Fed's economic outlook gloom and corporate earnings failed to inspire. Meanwhile, the U.S. dollar fell again helping to boost precious metal prices near 7-week highs.
Fed minutes downgrade U.S. economy -Marketwatch
"Minutes of the Fed’s Sept. 16-17 policy meeting disclose the Fed staff further trimmed its assumptions for the rates of productivity and potential growth over the medium term....The Fed staff’s view was already gloomy. A mistaken leak this summer by the U.S. central bank revealed, going into the Fed’s June policy committee meeting, the U.S. central bank’s staff penciled in potential growth averaging just 1.74% over 2015-2020, according to the document now on the Fed’s website....With trend growth so low, the economy is in a pickle. Even moderate gross domestic product in the range of 2.0-2.5% that the Fed expects can produce inflation. 'It’s a bad place to be,' said Robert Brusca, chief economist at FAO Economics." More confirmation the Fed's zero interest policy has failed to boost the U.S. economy, as projected in The Biggest Bank Heist in History.
U.S. Recession Just Got a Little More Likely -Bloomberg
"The probability that the world's biggest economy will enter a recession in the next 12 months jumped to 15 percent, its highest level since October 2013, according to economists surveyed Oct. 2-7 by Bloomberg. The median had held at 10 percent for 13 consecutive months. Concerns over China, and the potential spillover to other economies, have led economists to cut their third-quarter growth forecasts to 2 percent from as high as 3 percent in July. China also is worrying Fed officials, who cited it as a risk to their outlook for economic growth and inflation - so much so that they delayed what would have been the first increase in the benchmark interest rate since 2006."
Central bank policy divergence to widen -Financial Times
"When the US Federal Reserve chose to leave interest rates on hold in September, it left policymakers elsewhere with a conundrum. The dollar has weakened, and diminishing expectations for the pace of global growth and inflation are undoing the impact of European and Japanese stimulus programs. The only thing increasing is the pressure for fresh action. 'Even if the Fed lifts off zero in December, it will probably be the most dovish rate hike ever. By contrast, the other big players — the ECB, the BOJ and the PBOC — look set to ease policy further,' notes Joachim Fels, global economic adviser at Pimco." In What's Next For The Dollar? author and Swiss America Chairman Craig Smith explains why the U.S. dollar is the tallest midget in the world of paper currencies and is set for a fall.
Debt ceiling fail by Congress could get really ugly -CNBC
"Last week a government shutdown was narrowly averted by a last minute deal in Congress that angered its most conservative members and prompted House Speaker John Boehner, R.-Ohio, to step down. His presumptive replacement, House Majority Leader Kevin McCarthy, R.-Calif., abruptly announced Thursday that he would not seek the job. Now, amid the leadership vacuum, Congress remains paralyzed over a long list of contentious issues, from budget battles to a sweeping new trade deal. But unless Congress acts in the next few weeks to raise the government's legal borrowing limit, the Treasury will be forced to stop borrowing and paying its bill - including interest on government bonds that have already been sold to investors. 'Congress needs to act or we could be faced with a crisis,' Treasury Secretary Jack Lew said Thursday at an International Monetary Fund meeting in Lima, Peru. 'We have the capacity, but do we have the will?'" Good question. All things are possible amid our current environment of political confusion.
10.8.15 - INVESTOR ANGST
Gold last traded at $1,144 an ounce. Silver at $15.76 an ounce.
NEWS SUMMARY: U.S. stocks rallied Thursday after the Fed minutes revealed 'downside risk' fears restrained them from lifting interest rates. Meanwhile, the U.S. dollar traded lower and precious metal prices eased back slightly.
Recession buzz is heating up on Wall Street -CNBC
"Wall Street is getting increasingly nervous about the prospects for recession, both on a global and domestic level. Slowing global growth has been one of the predominant investing themes in 2015, causing enough turmoil to send both the S&P 500 and the MSCI World Index down about 4 percent. The $73.5 trillion global economy is expected to grow 3.1 percent in 2015 and 3.6 percent in 2016, according to the latest International Monetary Fund projections. Those numbers, though, are heading lower and could be revised even more before all is said and done." Investor angst is rising as the markets anticipate rising debt and risk levels. The solution is to diversify into assets that are currently undervalued, such as precious metals, for peace of mind says Jim Carrillo in Stock Market Meltdown Confirmed.
Shiller Sees ‘Anxious Worrisome’ Times -Fox Business
"During a conversation on FOX Business Network’s Mornings with Maria, Yale University Professor of Economics Robert Shiller talks about his new book Phishing for Phools, which addresses the dark side of economics. 'People can be manipulative and deceptive, I guess we teach that to our children, but what we don’t emphasize is how an economy actually incentivizes that, unless there is a civil society watching, it incentivizes that, it’s a fundamental problem with completely unregulated or unwatched free markets.....A recent example is Volkswagen, they, a venerable corporation, put in a defeat device in their cars, it was fraud and they got away with it for a long time,' he said, '...we get into an atmosphere where everyone is doing it.'" Governments and central banks can also be 'manipulative and deceptive' as Craig Smith and Lowell Ponte explain in The Biggest Bank Heist in History.
$3 trillion corporate credit crunch looms -Telegraph
"A poisonous triad of global risks is pushing the world to the brink of a new financial crisis, says stark IMF report. Governments and central banks risk tipping the world into a fresh financial crisis, the International Monetary Fund has warned, as it called time on a corporate debt binge in the developing world. Emerging market companies have 'over-borrowed' by $3 trillion in the last decade, reflecting a quadrupling of private sector debt between 2004 and 2014, found the IMF's Global Financial Stability Report. This dangerous over-leveraging now threatens to unleash a wave of defaults that will imperil an already weak global economy, said stark findings from the IMF's twice yearly report."
What people regret the most in retirement -CNBC
"Ready for retirement? Whether Americans have a retirement savings plan plays a big role in their opinion about having an affordable retirement, according to the Employee Benefit Research Institute's 2015 annual retirement confidence survey. But financial advisors say there are many other factors potential retirees should consider before leaving the workforce, including the timing of Social Security payments, planning for leisure time and budgeting based on unrealistic rates of return. Some retirees, they say, get these wrong and live to regret it."
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