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5.27.16 - Delusional Fed Creates Economic Stagflation

Gold last traded at $1,211 an ounce. Silver at $16.21 an ounce.

NEWS SUMMARY: U.S. stocks rose modestly Friday after Fed Chair Yellen's speech gave no further clues of when the next rate hike will arrive. Meanwhile, precious metal prices drifted lower as the dollar strengthened.

Silver Price May Surge Ninefold amid Global Gadgets Boom -Bloomberg
"A major Japanese electronics maker approached First Majestic Silver Corp. for the first time last month seeking to lock in future stock, a sign of supply concerns that could boost the metal’s price ninefold, according to the best-performing producer of the metal. 'For an electronics manufacturer to come directly to us - that tells me something is changing in the market,' said Keith Neumeyer, chief executive officer of First Majestic. 'I think we'll see three-digit silver,' he said, predicting the metal could surge to $140 an ounce by as early as 2019....While long coveted for use in jewelry, coins and utensils, silver is increasingly in demand for its industrial applications. Last year, about half of global silver consumption came from such use, including mobile phones, flat-panel TVs, solar panels and alloys and solders, according to data compiled by GFMS for the Washington-based Silver Institute."

Could silver prices reach into triple-digits in the years ahead? YES! It’s an exciting time for SILVER - which in on track to become the best performing asset of the year! Take Advantage of the silver window of 2016! Read our new 2016 Silver Report - The Global Metal

GDP Using Fed's Inflation Measure GDP Would Be Negative -HedgeEye
"With a '0' in front of GDP and S&P earnings growth -8.5% y/y, should the Federal Reserve raise rates in June? Today's 1Q16 GDP estimate was revised up to 0.8% versus the first quarter's estimate of 0.6%. That's misleading. In calculating economic growth, the government used the sub-1% GDP Deflator, which stands at 0.6%. Meanwhile, if the US Government used the Federal Reserve's prefered measure of inflation, core PCE which now reads 2.1%, US GDP would have been NEGATIVE in Q1."

Today Fed Chair Janet Yellen told a Harvard crowd the Fed’s handling of the economy during the crisis was "nothing short of magnificent." However, U.S. productivity growth is "miserable." Yellen does however see inflation heating up. A stagnant economy plus inflation equals stagflation. Prepare now for more economic surprises in 2016 by reading our three Special Reports on Gold, Silver and Money

You Don’t Have to Be a Criminal for the IRS to Seize Your Bank Account -National Review
"Congress is considering a bill that would prohibit the federal government from punishing people who haven’t committed any crime....Like many other police agencies, the IRS has extensive and easily abused civil-forfeiture powers. The idea behind civil forfeiture is that criminals should not be allowed to profit from their crimes, and that their ill-gotten loot - cash, cars, real estate - should find its way to the public fisc....Under current law, structuring violations are treated differently. If you make a series of just-under-$10,000 withdrawals because you prefer to deal in cash but do not wish to land on the IRS’s radar, then the IRS can treat that as an offense, even though your only 'crime' is taking out $9,999 instead of $10,000. The bill under consideration, the Clyde-Hirsch-Sowers Respect Act (named for three small-business owners who had their property seized in structuring cases although they’d committed no underlying criminal offense) would change that, bringing structuring-case practices into line with conventional money-laundering cases."

In our free White Paper, THE SECRET WAR ON CASH, discover why - under threat of regulatory punishment -banks must now spy on you for the government. Your bank must report to the government any financial behavior it deems "suspicious" or "unusual."

The U.S. Is A Good Country For Bad Banks -The New Yorker
"In 2013, Bank of America, which had by then taken over Countrywide, was found liable for fraud and later ordered to pay a $1.27 billion judgment to the government. But this week, the Second U.S. Circuit Court of Appeals looked at that judgment and asked this question: If an entity (in this case, a bank) enters into a contract pure of heart and only deceives its partners afterward, is that fraud? The three-judge panel’s answer was no. Bank of America is no longer required to pay the judgment....After this ruling, the government may be even less willing to fight it out in court. Worse, it may have less leverage with companies when trying to extract penalties and fines in settlement negotiations over misconduct allegations. The court has provided companies with a new piece of ammunition: the ability to argue that their deliberate misconduct was not actually fraud."

*Swiss America will be closed Monday, May 30 in observance of Memorial Day*

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5.26.16 - IRS Bullies Citizens

Gold last traded at $1,219 an ounce. Silver at $16.33 an ounce.

NEWS SUMMARY: U.S. stocks traded mostly lower Thursday, with investors looking ahead to U.S. GDP data next week and Fed Chair Janet Yellen's comments. Meanwhile, precious metal prices drifted lower along with the U.S. dollar.

Gross Warning: "Day Of Reckoning Is Coming" -Zero Hedge
"Bill Gross, who manages the $1.3 billion Janus Global Unconstrained Bond Fund, said he is moving to sell credit risk and insurance on market volatility rather than buying long-term debt, because he believes a day of reckoning will come when central banks will no longer be able to prop up asset prices and investors will withdraw from markets. What should central banks do? Central banks, he said, need to start raising rates to restore the right incentives for investors. Gross said the Federal Reserve needs a leader similar to Paul Volcker, who raised interest rates in the 1980s despite popular opposition. 'We need another Volcker,' Gross said. Unfortunately that won't happen."

Yes, the day of reckoning and a great withdrawal from the markets and banking system is coming. Prudent Americans need to be prepared. In the book The Great Withdrawal authors Craig R. Smith and Lowell Ponte reveal a simple way to protect your hard earned money from out-of-control government and central bankers. Pat

IRS took $43M from Americans under 'structuring' law without evidence -Fox News
"The IRS has seized $43 million from more than 600 individuals by accusing them of violating 'structuring' laws even when there has been no evidence of criminal wrongdoing, according to testimony heard at the House Ways and Means Committee today. In 2012, two armed IRS agents went to the farm of Randy Sowers, a dairy farmer for over three decades, to notify him that the IRS had seized the business’ bank account, which held more than $60,000. The agents told Sowers the IRS had done so because of structuring laws....It is unlawful for an individual to break up or 'structure' cash deposits into amounts below $10,000 to avoid federal currency reporting. 'At that point, I had never before heard the term 'structuring,' and I had no idea that depositing cash in the bank could even potentially be a federal crime,' Sowers said. 'Nobody from the bank or the government warned me that under-$10,000 bank deposits could lead to the seizure of our bank account. Indeed, nobody from the government contacted me about our bank deposits until after they seized our bank account.' ... While the IRS issued a policy change in February 2015 prohibiting the seizure of funds if no illegal activity took place, it has not returned money that was seized in the past to innocent individuals."

Loving Banks Enough to Let Them Fail -Tamny/Liberty Law Site
"Since Ben Bernanke plainly didn’t see the financial crisis of 2007-2009 coming (if he possessed that kind of foresight he’d be a billionaire investor, not a former central banker hustling for speaking fees), why would anyone care about his present assessment of the banking system’s health? What could he possibly know?....Everything Bernanke writes is rooted in the notion that banks can’t fail, but they can and should fail. Regularly. How else can banks evolve to meet the needs of the marketplace? Without failure, banks will soon enough be rendered extinct by outside sources of finance not hamstrung by limits on their ability to grow. They will become a protected class increasingly detached from serving customers and shareholders."

The story is told of the compassionate little boy who sees the struggling butterfly attempting to shed his cocoon and decides to help the process along by prematurely cutting open the cocoon, only to discover his shortcut may cost the butterfly his very life. Unfortunately, our government and economic leaders have been wielding the scissors far too long.

Amid desperation, 1600% inflation Venezuela sells gold reserves -CNBC
"Venezuela’s gold reserves have plunged to their lowest level on record after it sold $1.7 billion of the precious metal in the first quarter of the year to repay debts. The country is grappling with an economic crisis that has left it struggling to feed its population....The IMF forecasts the economy will shrink 8% this year, and 4.5% in 2017, after a 5.7% contraction in 2015. Inflation is forecast to exceed 1,642% next year, fueled by printing money to fund a fiscal deficit estimated at about 20 percent of gross domestic product....The gold swap is another indication the country is desperate for cash. Venezuela and its national oil company PDVSA have some $6 billion to repay in principal and interest payments this year, according to Russ Dallen of investment bank Caracas Capital Markets."

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5.25.16 - The Billionaire Buying Spree

Gold last traded at $1,223 an ounce. Silver at $16.33 an ounce.

NEWS SUMMARY: U.S. stocks rallied sharply Wednesday fueled by $50 oil prices and Fed interest rate hike speculation. Meanwhile, precious metal prices held steady on a weaker U.S. dollar.

Hackers could cripple major world banks using Swift network -ITPRO
"Three banks have lost millions of dollars to hackers using the Swift network. Swift's CEO has warned that hackers could use its financial transfer system to bring international banks to their knees. The warning comes after a bank in Ecuador became the third financial institution to be attacked by hackers using the Swift network, which facilitates currency trading between more than 11,000 banks in 200 countries, losing $12 million....'The financial industry, as a community, has to be clear that cyber risk is big,' said Swift CEO Gottfried Leibbrandt. 'There will be more cyber attacks. And inevitably some will be successful.'....'The second cyber attack revealed by Swift in as many months is a wake-up call for banks across the globe,' said Splunk security expert Matthias Maier."

Craig R. Smith Comment: "Most people don't realize, or choose to ignore, just how vulnerable the world financial system is to a cyber-attack on the banking system. A single hacker pushing a single computer key could bring the entire monetary system to a halt for hours - or even days." This is just one of twenty major risks covered in DON'T BANK ON IT!

gold If All Is Well, Why Are Billionaires Buying Gold? -Dean Heskin, SATC
Despite the healthy recovery data, the US economy is still contending with stagnant wage growth, a Labor Force Participation Rate that is at historic lows, weak GDP, a slowing global economy and loose monetary policy run amok. An astonishing 23 countries, comprising a quarter of the world’s GDP, now have interest rates of zero or less. US stocks are about as expensive as they have ever been. Some analysts are warning that valuation bubbles are undoubtedly about to burst, particularly in tech and internet start-ups. And now there is talk of another housing bubble as ZIRP policies have fanned real estate demand....With everything once again pumped so artificially high, the downside risk becomes greater and greater. Find out which billionaires are buying gold here... Full story

Jim Rogers Predicts $68 Trillion-Dollar Crash -Dollar Vigilante
"Jim Rogers, has just released a new warning...using biblical references to warn of a financial tsunami that could take place either this year or next. He has just said, 'A $68 trillion ‘Biblical’ collapse is poised to wipe out millions of Americans.' Rogers co-founded the Quantum Fund with George Soros in the early 1970s. The fund generated returns of 4,200 percent over 10 years and made fortunes for both men. Soros and Rogers, having worked together for so long, probably both have access to information the regular person doesn’t. Soros recently was in the news for shorting the stock market and making gold his largest held asset and predicting an impending crisis."

Get into gold now! Prices could hit $1,900 -Yahoo Finance
"'This is just the beginning of a new bull market in the metals,' the Lindsey Group's chief market analyst Peter Boockvar told CNBC 's 'Futures Now' on Tuesday. Ultimately, Boockvar believes that the 2011 highs of around $1,900 for gold are not only reachable, but surpassable, as reasoned that bull markets historically exceed the previous bull market peak at some point....'The growing likelihood of another rate hike should be a glaring technical sign to any tape-watcher,' reasoned Boockvar in his coverage. 'I don't believe the dollar breaks out higher on another rate hike, and I therefore remain bullish on gold and silver and other commodities.'"

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5.24.16 - Gold Price dip! The Fed Delivers the Perfect Buying Window

Gold last traded at $1,229 an ounce. Silver at $16.25 an ounce.

NEWS SUMMARY: U.S. stocks climbed more than 1% Tuesday following sharp gains in new home sales and European stocks. Meanwhile, precious metal prices back-peddled as June Fed rate hike expectations boosted the buck.

Fed hikes may not stop to gold's run -CNBC
"'If you look at gold on a very long-term basis, there is literally very little correlation between interest rates and gold,' Boris Schlossberg said Monday on CNBC's Power Lunch. 'Basically, gold rose when interest rates rose in the '70s, gold rose when interest rates declined in the '90s,' so the likely effect of Fed rate rises isn't straightforward....'The Fed rate hike may actually trigger a sell-off in equities, that will probably be very positive for gold,' Schlossberg said Monday. 'And as long as gold holds the $1,200 level, I still think it's a pretty good long.'"

Precious metal prices are in a confirmed uptrend this year, but no bull market travels in an upward straight line. Smart money views price dips as a welcome entry point to add more metals to a portfolio at sale prices. The fundamental and technical indicators are all calling for metals to extend their rally in 2016. Don't wait to buy gold ... buy gold and wait!

dollar Dollar climbs as markets play Fed waiting game -Reuters
"The U.S. dollar pushed the euro down to $1.1165 as it touched its highest against the world's other top currencies since late March....'Everyone is worried about a June hike from the Fed,' said Allianz Global Investors' emerging markets portfolio manager Shahzad Hasan....Philadelphia Fed President Patrick Harker said on Monday a rate hike in June would be appropriate unless data weakens, while St. Louis Fed President James Bullard said holding rates too low for too long could cause financial instability. Fed Chair Janet Yellen will appear at a panel at Harvard University on Friday, a day on which investors will also see the second estimate of U.S. first-quarter growth."

The Fed's rate hike guessing game is helping to boost the dollar, despite weak U.S. economic and employment data. Today the U.S. dollar is the best horse in the glue factory, but it's still headed for extinction long-term if things don't change. Find out how the ongoing currency wars are about to affect the buck in our new 2016 World Money Report.

Fed rate hike 'reckless and unnecessary' -Rosenberg/CNBC
"A slow economy, weak stock market and growing signs of deflation hardly add up to ideal conditions to raise interest rates in economist David Rosenberg's book. 'Unlike other periods of tightening, there is no boom, no evident inflationary pressures or perceived bubbles to respond to,' he wrote in his daily note to clients. 'Maybe the FOMC is bored. Who knows?' ....'The Fed has been so wrong on its forecasts for so long. They have proven their bark is far worse than their bite,' he said. 'None of this jawboning can be taken very seriously.'"

Union Workers May Lose Over Half Their Pensions -Pontification Blog
"407,000 workers – mostly unionized Teamster truck drivers and retirees – learned days ago from the Central States Pension Fund director Thomas Nyhan, that the pensions they were depending on may be cut to 'virtually nothing.' Bleeding $2 Billion a year that it cannot replace, this fund proposed to the government that it could remain solvent by slashing pension payments by a retirement-crushing 60 percent. "This gives ‘retirement’ a whole new meaning,” says veteran think tank futurist Lowell Ponte. “For many of these short-changed drivers, it means they must re-tire their vehicles and put that rubber back on the road. As with millions of others, this retirement plan shortfall will crash their dreams of retirement and force them to re-tire and keep on trucking.” Full story

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5.23.16 - Public Pensions At Risk! Is Your Pension Safe?

Gold last traded at $1,251 an ounce. Silver at $16.42 an ounce.

NEWS SUMMARY: U.S. stocks tried for gains Monday with materials leading amid Fed jawboning the increased likelihood of a June interest rate hike. Meanwhile precious metal prices steadied on a flat U.S. dollar.

Gold is Insurance Against Bad Guys Hitting Reset Button -Yahoo Finance
"In case you missed it, when the World Gold Council released its Q1 data, total demand for gold was up 21% year-over-year, largely due to demand for investment purposes....Demand for investment purposes was up 122% year-over-year. That says something.... If the central banks (huge buyers in recent years) get started again, watch out. So, what is it about this barbarous relic that it refuses to just go away quietly? Is it money? Is it a commodity? Quite frankly, I think it is both. There certainly are characteristics that even the most impure of monetarists can not deny: store of wealth, divisibility, and even at times of crisis, a medium of exchange. There is a likelihood that gold will play a role in the next monetary system. I look at this as insurance-a way to preserve a slice of your portfolio should the bad guys ever hit that reset button."

Because gold is real money accepted worldwide, it serves as a trustworthy wealth insurance policy against both the risks of a continued gradual economic decline, as well as a sudden overnight economic collapse anywhere in the world. Read more in our 2016 Gold Report - World Edition.

shoes Pension Fund Proposes 60% Cuts, Treasury Says "Not Enough" -Zero Hedge
"407,000 private sector workers are about to lose most of their pensions. The Central States Pension Fund, which handles the retirement benefits for current and former Teamster union truck drivers across various states applied for reductions under that law. Currently the plan pays out $3.46 in pension benefits for every $1 it receives from employers. That's a drain of $2 billion annually. The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said....The plan filed for 60% cuts in pensions. The Treasury Department has the final say. The verdict came in today: 'cuts not deep enough'.When private pension plans go broke, they go broke. Public pension expect a bailout."

Do you have faith in our government to protect your savings and retirement? With world financial events spinning out of control, a great withdrawal is under way, which could wipe out your hard-earned savings and prohibit access to your own money! In the book The Great Withdrawal authors Craig R. Smith and Lowell Ponte reveal a simple way to protect your hard earned money from out-of-control government. Call 800-289-2646 or register here to request a FREE copy!

As Global Risks Multiply, Gold Seen at $1,400 -Bloomberg
"Gold has soared in the opening months of 2016 as investors second-guess a wary Federal Reserve. A thicket of risks from the U.K.'s Brexit vote next month to the U.S. presidential election may lift prices even further by year-end, according to Denmark's Saxo Bank A/S. 'It's not just one risk right now,' said Head of Commodity Strategy Ole Hansen, who predicts bullion may jump to as much as $1,400 an ounce this year. 'We have got several risks, so when you start adding them up, it could be that additional risks will sway some investors to add exposure to gold or maybe revisit gold,' Hansen said in a phone interview on Tuesday. 'We have another political uncertainty later in the year with the presidential election,' said Hansen 'So these are all just adding to the reasons why precious metals have become the must-haves.'....German bank Joh. Berenberg Gossler & Co. has said it plans to increase gold holdings, betting demand will be lifted by uncertainty surrounding the outcome of the U.K. vote and the U.S. election."

Britain Advances Cashless, Contactless Revolution -The Guardian
"Britain has passed another milestone on the path to a cashless society, with 2015 the first year that cash was used for less than half of all payments by consumers. Cash usage will be eclipsed by debit cards and contactless payments by 2021, according to Payments UK, which represents the major banks, building societies and payment providers. In 2015 cash made up 45.1% of payments, compared with 64% in 2005, and is expected to fall to just a quarter by 2025. It will largely be replaced with payments by contactless cards, which have soared in popularity....But not everyone wants to join the contactless revolution. A survey last week by the security company Defender Note found that 30% of consumers want banks to ask them before issuing them with contactless cards."

A relentless 21st century march toward a cashless society is accelerating worldwide. Is this a good thing or bad thing? What are the risks to your savings and your privacy? It's all covered our Special Report The Secret War on Cash.

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5.20.16 - The War on Cash just became a Global Conflict

Gold last traded at $1,252 an ounce. Silver at $16.53 an ounce.

NEWS SUMMARY: The Dow struggled to snap a 3-week losing streak Friday amid Fed rate hike fears. Precious metals ended week with modest gains despite a firmer dollar.

Techno Cash: The War on Cash is Only Half the Story -Mises
"You can imagine the future public relations campaign. Traceable currency units will allow Official Authorities to prevent any number of terrorist attacks, drug sales, and sex traffickers, so the propaganda will read. Imagine a digital, global heat-map at the NSA with colored pins for the location of various units of currency of interest. In this light, it should be clear that state agents are not interested in a War on Cash per se, but rather: a War on Anonymity. The question becomes how best to win this war against privacy and freedom: purposely provoke active opposition to the elimination of a central fixture of American history, and for many, of Americans' daily lives; or, acquiesce to public outcry and simply swap out the old, politically incorrect currency units, for new, socially just, generally popular, globally traceable ones?"

Find out how to win the war against cash, anonymity and freedom today, read our FREE Special Report The Secret War on Cash.

gold vs fed What Happens to Gold If the Fed Raises Interest Rates -DailyWealth
"Here we go again... The Federal Reserve is threatening to raise interest rates again. This time, they tell us, the rate hike could come as soon as June. This has gold investors worried...'Gold slides on Fed rate hike expectations,' read a headline on yesterday. Should you worry? In short, no... The last time the Federal Reserve raised rates was from 2004 to 2006. Rates went from 1% all the way to 5.25%....The last time the Fed started raising interest rates, gold was in a bull market. And higher rates didn't hurt gold."

Gold is set to rise above Fed rate hikes for about a dozen solid reason which are all covered in our 2016 Gold Report - World Edition.

Fed Inflation Targeting Scam is a Scam -Stockman/Daily Reckoning
"The estimable Martin Feldstein put the wood to the Fed in a recent op ed and in so doing hit the nail directly on the head. He essentially called foul ball on the whole inflation targeting regime and its magic 2.00% goalposts in part due to the measuring stick challenge, saying, 'A fundamental problem with an explicit inflation target is the difficulty of knowing if it has been hit.'....On a five year basis, services inflation is up at 2.2% annually, and during the past year it has heated up to 3.2%. That's because the regular CPI gives a 25% weighting to the OER (owners equivalent rent), which is more than a little squirrely....So 90 months of essentially zero rates in the context of financial markets that have been transformed into gambling casinos can only have one result. To wit, what is coming down the pike is the Mother Of All Financial Meltdowns. And this time it will be evident to the world as to who is responsible for the resulting carnage."

Growth Rate Weighed Down by Government Inaction -NY Times
"In the seven years since the United States emerged from the Great Recession under President Obama, annual growth has averaged just about 2 percent....Unless business and government do something to improve the economy's underlying capability, the United States will be lucky to achieve even that paltry growth rate over any sustained period of time....While Donald J. Trump exploits that anger, his grab bag of proposals - deporting a large share of the work force; offering multitrillion-dollar tax cuts, mostly for the rich, that would only further widen inequality; blocking trade with much of the world; maybe raising the minimum wage, maybe not - would do nothing to bolster growth. But don't worry, it will be great....Hillary Clinton, who has put together a coherent platform focused on raising the incomes and enhancing the economic security of middle-class families, has steered clear from addressing the very real danger of low growth over the coming decades. Instead, she has promised to put her husband, who presided over the burst of growth in the late 1990s, in charge of economic policy....At the very least, the dismal forecast calls for the government to prepare for another bout of fiscal stimulus."

Eduardo Porter of NY Times really thinks bigger government and more reckless Fed fiscal stimulus is the solution to our shrinking U.S. growth? Read more about what 100 years of Progressive debasement has done to slow U.S. growth to a crawl in The Great Withdrawal.

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