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9.23.16 - VIDEO: Why Gold Is Up 26% Year-To-Date

Gold last traded at $1,337 an ounce. Silver at $19.69 an ounce.

NEWS SUMMARY: Precious metal prices were steady Friday despite a firmer dollar. U.S. stocks traded lower as oil prices fell sharply while investors digested key manufacturing

Why Fiat Money Manipulation Can Never Produce Prosperity -Forbes
"The study of economics is: the study of how people make a living. We make a living today with a fantastically complex network of specialization and trade – a network so complicated that nobody actually understands what is going on....As described in eloquent detail by George Gilder in The Scandal of Money (2016), this system of money and prices is the information network that allows millions and even billions of people to cooperate together productively, and even, over time, with increasing productivity....By distorting the money – changing its value – the information contained in prices, interest rates, or profit and loss become distorted....The only kind of 'rules-based' system with a centuries-long proven track record is a gold standard system."

HEgold Why Gold Is Up 26% Year-To-Date -HedgeEye (2-min. video)
"According to Gallop {sic} polls, there has been a 14-year slide in confidence that the 'Fed leader will do the right thing for the economy?' Shocker, we know... Fed head Janet Yellen did little to inspire confidence at yesterday's FOMC press conference with statements like this: 'Asset values aren't out of line with historical norms.' 'The Fed wants the expansion to last as long as possible.' 'There is little risk to falling behind the curve in the near future so the FOMC can be gradual in its rate hikes.' What Does the Fed's Confidence Crisis have to do with Gold? As Hedgeye CEO Keith McCullough points out in the video below, 'Gold loves the blowup of the central planning belief system.'"

Yahoo hack is one of the largest security breaches of the Internet age -Boston Globe
"Yahoo Inc. said Thursday that hackers backed by an unnamed foreign government had stolen personal information from more than 500 million of its users’ accounts, one of the largest security breaches of the Internet age. Meanwhile, a website with suspected ties to the government of Russia leaked stolen information about the travel itinerary of Vice President Joe Biden and First Lady Michelle Obama, including a scanned image of her passport. The Yahoo breach puts at risk passwords, e-mail address, and phone numbers for millions of users. Yahoo urged consumers to be wary of suspicious e-mails. The two episodes are the latest sign that the world’s best computer security engineers seem incapable of securing the nation’s critical computer networks against spies and criminals."

9.22.16 - Fed Inaction Revives Gold Bulls

Gold last traded at $1,344 an ounce. Silver at $20.09 an ounce.

NEWS SUMMARY: Precious metal prices extended gains Thursday following a weaker dollar and inaction by the Fed. U.S. stocks staged a small relief rally on the Fed's postponed rate hike, despite downbeat housing data.

Fed’s Inaction Revives Gold Bulls, Propels Metals and Miners -Bloomberg
"The Federal Reserve’s inaction has again revived gold bulls, and industrial metals and miners are getting a ride as well. Gold rose to the highest in two weeks after policy makers kept U.S. interest rates unchanged for a sixth straight meeting and cut their outlook for rate increases next year. The dollar slipped for a third time this week, making metals cheaper for holders of other currencies. Low rates and efforts by central banks to bolster economic stimulus are driving demand for gold as a store of value. Bullion is headed for a third quarterly gain, the longest rally since 2011, when prices surged to a record."

By kicking the 'interest rate hike' can down the road, Yellen's Fed hopes to give the economy and markets a "little more room to run." Short-term market speculators cheered the decision, but with inflation pressures building, time will tell if this was a wise decision. The fact that investors are so worried over a measly .25% rate hike illustrates how fragile the economy and markets are presently. Now is the time to reinforce your portfolio with real money; gold. Our 2016 Gold Report - World Edition explains why gold's trajectory is upward, regardless of what the Fed does.

cliff Stocks are stuck in a holding pattern despite the Fed, Fidelity analyst says -CNBC
"Stocks may have rebounded after the Federal Reserve left interest rates unchanged, but investors shouldn't expect a significant rally until earnings growth returns, Fidelity Investment's director of global macro said Thursday....'If there's no earnings growth,' he told CNBC's 'Squawk Box'. 'There's only so much you can do in terms of a market rally no matter what the Fed does, and that's why we're kind of stuck in this holding pattern here.'....Whether the stock market can weather a rate hike comes down to earnings growth, Timmer said. Despite four straight quarters of earnings declines, equities have risen as investors pile into the market for equities and other risk assets to find returns that government debt is no longer producing."

UN fears third leg of the global financial crisis - with prospect of epic debt defaults - Telegraph
"The third leg of the world's intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history. It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity. 'Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,' said the annual report of the UN Conference on Trade and Development (UNCTAD)....The UN's advice to the emerging nations is to retake control of their destiny and turn the tables on the financial elites. They should impose capital controls, preferential tax treatment for retained earnings, and force fund managers to hold assets for longer. They should allocate credit without apology, and learn a trick or two from the Korea's methods of 'financial repression'."

Dennis Gartman: "We Are Entering The “Zimbabwe-isation” Of The Global Capital Markets" -Zero Hedge
"Share prices are sharply higher once again, as all ten of the markets comprising our International Index have risen over the course of the past twenty four hours with the markets in 'The Americas' leading the way higher with the S&P rising a bit more than 1%; with stocks in Canada rising 1.3% and with the market in Brazil willingly overcoming the political confusion there to rise 1.1%. That strength, rather obviously, follows the non-decision by the Federal Reserve Bank to avoid any thoughts of tighter monetary policies until December… if even then. That non-decision decision gives 'aid and comfort' to other central banks around the world to be as aggressive as they wish to be in order to sponsor economic growth, employment growth and inflation when and where they are able. We are, it seems to us, entering the period we shall call the 'Zimbabwe-isation' of the global capital markets and we say that with all sincerity… and requisite trepidation... recalling that the Zimbabwe stock market led the world to the upside several years ago as the central bank there lost all control of its money supply and created a massive, rampant inflation that sent the Zimbabwe dollar into oblivion but sent the Zimbabwe stock market soaring at the same time."

Mr. Gartman is not alone in his fear of rampant inflation causing paper currencies to evaporate virtually overnight; as has happened in Weimar, Germany, Argentina and Zimbabwe. It is better to be a year early than one day late to own gold as wealth insurance. Act now to discover The Timeless Truth About Gold & Silver.

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9.21.16 - The Fed's Unsolvable Credibility Problem

Gold last traded at $1,331 an ounce. Silver at $19.76 an ounce.

NEWS SUMMARY: Precious metal prices rose over 1% Wednesday after both the Fed and BOJ decided to stand pat on their near-zero interest rate policies. U.S. stocks cheered the Fed's do-nothing policy decision to remain "accommodative".

Gold Seen Entering a Long-Term Bull Cycle -Bloomberg
"Gold will likely soar to a record within five years as asset bubbles burst in everything from bonds to credit and equities, forcing investors to find a haven, according to Old Mutual Global Investors’ Diego Parrilla. The metal is at the start of a multi-year bull run with a 'few thousand dollars of upside' in a world of 'monetary policy without limits' where central banks print lots of money and low or negative interest rates prevail, said Parrilla....'If we’re able to normalize global monetary policy, and we can do that in a way that doesn’t result in the implosion of some of the bubbles we’ve been building, the appeal of gold as a safe haven might diminish,' Parrilla said. 'But I think it’s highly unlikely we will have a very smooth unwind of all these years of monetary excess.'"

Yellen cartoon Fed faces a credibility problem -CNNMoney
"Federal Reserve leaders are facing renewed criticism about their credibility. Often, a few top officials speak publicly in favor of increasing interest rates. Then days later, another one of them talks down a rate hike. These conflicting messages from the Fed's top leadership continue to hurt public confidence in the Fed, experts say. 'This is a disaster in terms of credibility,' says Dan North, chief U.S. economist at Euler Hermes....Stock markets can get rattled when leaders of the decision-making Federal Open Market Committee hint at raising rates, says Ed Yardeni, chief investment strategist at Yardeni Research. He called it the 'Federal Open Mouth Committee.'....The Fed 'needs to save face by hiking at least once this year,' says Christopher Veccio, a currency analyst at DailyFX, a research firm."

Putting faith in the Fed is like putting faith in bad money; both are destined for failure over time. The upcoming book, Money, Morality & The Machine, explores this nexus between bad money and bad values. According to the book preview, "The Federal Reserve, created in 1913, was supposed to protect the value of the U.S. Dollar, but this new central bank’s charter said the Fed was to 'furnish an elastic currency' that gave politicians vastly more money to spend. Thanks to the Federal Reserve and runaway government spending, the U.S. Dollar now has only about two pennies of the gold-backed 1913 dollar’s purchasing power. Authors Smith and Ponte calculate that more than a century of political manipulation of our money has cost Americans at least $220 Trillion, much of it expropriated through the invisible tax of inflation that debased our money, debased our social morals, and gave America the best government money can buy." (Request a Free Book Preview here)

Bank of Japan announces major policy overhaul in latest bid to goose economy -CNBC
"Japan's central bank kept rates steady at its meeting Wednesday, but issued a plethora of fresh changes to its policy approach, marking its latest attempt to boost prices and goose economic growth....It said it would buy 10-year Japan government bonds (JGBs) so that the yield would hover around zero percent while keeping a lid on short-term rates....Markets may read the statement as a 'whatever it takes' moment for expanding the monetary base until Japan begins to see some of the inflation it has long sought.... 'The conclusion to the comprehensive review is underwhelming,' Patrick Bennett, a foreign-exchange strategist at CIBC, said in a note on Wednesday. 'Today's actions can't manufacture inflation, and never could.'"

Central Banking's 5 Stages of Death -Market Slant
"Denial: Kuroda: BOJ isn’t reaching its limits for bond buys at all - did he really say 'at all'?....Bargaining: Kuroda announces CPI-ex food target of 2% within 2 yrs. Currently <2%. Replaced today target of >2% in the undefined future....Anger: Abe says he will keep on fighting to boost Japan's economy....Sadness: Probably on full display in the Abe and Kuroda households tonight....Acceptance?: Central Bank’s Policy Cupboard is Bare. BOJ announcement today was a tacit admission of their inability to do what they claim they can....Inflation is coming. The unsterilized, in your face kind. Because CBers cannot afford to have stagflation. If they are going to get the global economy moving and inflation is a consequence, then so be it. They have too much vested from their ivory towers to admit they are wrong."

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9.20.16 - Will the Fed Risk Shocking the Markets?

Gold last traded at $1,318 an ounce. Silver at $19.27 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday despite a firmer dollar ahead of Wednesday's Fedspeak. U.S. stocks inched higher following disappointing housing data; while investors awaited monetary policy decisions from the Fed and the Bank of Japan.

Fed again poised to cut longer-run interest rate forecast -Reuters
"U.S. Federal Reserve policymakers are set this week to again cut their forecasts for how high interest rates will need to go in an economy where output, productivity and inflation are growing at a slower pace than in past decades. It would be the fourth time in 15 months that the U.S. central bank has been forced to admit its estimate of this so-called neutral rate was too optimistic, raising questions about the health of the economy in the coming years....The Fed is expected to leave its benchmark overnight interest rate unchanged following its two-day meeting on Wednesday, according to a Reuters poll of economists....The Fed has not raised rates this year despite signaling in December that four rate hikes were coming in 2016."

To better understand how and why the Federal Reserve has consistently made bad policy decisions about interest rates and quantitative easing, we suggest reading Money, Morality & The Machine, which is due for release in early October. (Get a Free Book Preview here)

Yellen What a Fed surprise would mean to markets -CNBC
"With the Federal Reserve meeting getting underway on Tuesday, one strategist warns that a surprise rate hike will cause a huge amount of turmoil, both in the U.S. and around the world. While Larry McDonald of ACG Analytics believes that it is unlikely that a September rate hike will occur, he predicts that a surprise hike would spur the U.S. dollar, which, in turn, would cause debt troubles worldwide. 'The reason why the Fed has been trapped all year is if they try to hike, you get a surge in the dollar,' he said Monday on CNBC's 'Trading Nation.' 'Because they kept interest rates so low for eight years, there's $8 or $9 trillion of commodity debt, of emerging markets debt and of oil debt that have been issued out that are dollar sensitive.'"

Gold steadies as investors bet against Fed hike -Reuters
Gold steadied on Tuesday ahead of a two-day U.S. Federal Reserve meeting that investors are betting will leave interest rates unchanged....'We are back in this pattern where the expectations about the next rate hike determine the short-term swings - when they are pushed backwards, gold rises and when they are pulled forward gold declines,' Julius Baer analyst Carsten Menke said. Japan's central bank also meets on Tuesday and Wednesday, and could make negative interest rates the primary focus of its monetary policy, moving away from quantitative easing."

Our 2016 Gold Report - World Edition explains the upward trajectory of gold prices in the months and years ahead, regardless of what the Fed does.

7 Reasons Market Risk 'Significantly Exceeds' Reward -HedgeEye
"Hedgeye Financials analyst Josh Steiner listed the many reasons why we think the 'risk-reward' of the U.S. stock market is tilted decidedly to the downside. Here's a brief recap from a recent edition of The Macro Show, 1. You’ve got small business loans and credit quality deteriorating, an enormous part of the economy. 2. You’ve got the rest of the lending complex beginning to tighten. 3. You’ve got the Fed in a position in which it's not able to do much about it. 4. You’ve got a broad swath of economic indicators getting worse. 5. You’ve got market valuation up on a rope. 6. You’ve got the duration of the labor cycle very extended. 7. And then there's this curious case of significant decline in maternity rates taking hold across America. As Steiner summarized: 'To me, it all paints a very fascinating picture of risk versus reward in the marketplace right now, where I think it's pretty plain that risk significantly exceeds what’s being priced into stocks and it's not that uncommon an occurrence.'"

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9.19.16 - Central Banks Are Buying Gold. Are You?

Gold last traded at $1,317 an ounce. Silver at $19.29 an ounce.

News Summary: Precious metals prices ended higher Monday on bullish outside markets and a lower U.S. dollar. Stocks wavered between gains and losses as investors brace for this week's central-bank meetings.

Central Banks Have Been Buying Gold With A Vengeance - Market Watch
"Annual net gold purchases of 350 tons a year by world central banks over the past eight years have returned to the 100-year average up to 1970 — reflecting gold’s renewed attractiveness as a safe-haven asset in an environment of uncertainty and low or negative interest rates. An OMFIF research document - the "Seven Ages Of Gold" - contains detailed statistics plotting long-run changes in central banks’ policies on buying and selling gold over seven distinct periods during the past two centuries, each lasting an average of around 30 years.

The latest 'Rebuilding' Period VII has been under way since the financial crisis in 2008. In these eight years, central banks in both developed and developing countries have shown a new fondness for gold, rebuilding its importance as a bedrock of most countries’ foreign reserves. Central banks have been net bullion buyers every year since 2008, adding more than 2,800 tons or 9.4% to reserves."

If The Fed Raises Rates, Gold Will Go Up Says 30 Years Of Data - The Street
"Friday's stronger-than-expected inflation data saw gold drop near three-month lows, and consensus says this week's U.S. Fed decision on interest rates has become D-Day for 2016's previous gains. But history says otherwise. Gold has since 1986 been more likely to rise if rates go up than if they stay the same, and by a greater percentage as well. Longer-term, a rate rise has also been followed by much stronger gold gains than a cut, and more frequently too."

We agree, the bull market in gold will not be deterred by an interest rate increase by the Fed in September or in December. If you need a fresh perspective on the bigger picture please read our 2016 Gold Report - World Edition.

Goldman: One Measure Suggests Stocks Could Crash 25% - Business Insider
"The S&P 500 is looking a little pricey, according to Goldman Sachs' David Kostin. Kostin, Goldman's chief equity strategist, said in a note to clients that even though companies in the S&P 500 are becoming less and less profitable, they are not being penalized by investors.

Based on the current ROE of the aggregate S&P 500, according to Kostin, there is significant reason to believe there is some downside.....Kostin has been warning about a possible pullback in equities for some time, as the market appears to be expensive compared to its historical average based on a number of metrics. This is another metric in that pullback narrative."

Heath Care Costs Rise By Most In 32 Years - CNN Money
"Prices for medicine, doctor appointments and health insurance rose the most last month since 1984. The price increases come amid a broader debate about climbing health care costs and high premiums for Obamacare coverage. A recent report by Kaiser/HRET Employer Health Benefits forecasts that the average family health care plan will cost $18,142, up 3.4% from 2015. That's faster than wage growth in America. Medical care costs altogether rose 1% just in August from July, according to the Consumer Price Index, a report on price inflation from the U.S. Labor Department. Premiums on the Obamacare exchanges are expected to rise by double-digits this year. "

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9.16.16 - Is Economic Freedom in Decline?

Gold last traded at $1,310 an ounce. Silver at $18.84 an ounce.

NEWS SUMMARY: Precious metal prices ended the week lower amid a firmer dollar and ongoing Fed rate hike speculation. U.S. stocks traded lower as investors digested key inflation data and looked ahead to next week's Fed meeting.

Gold steadies as U.S. data curbs rate rise speculation -Reuters
"Gold steadied above two-week lows on Friday after downbeat U.S. data curbed already muted expectations for a U.S. rate rise next week, though a firmer dollar and uncertainty over monetary policy kept it on track for its first weekly loss in three. The CME Group's FedWatch tool showed futures traders are now pricing in a 12 percent chance of a rate rise this month, down from 15 percent on Wednesday, after soft U.S. retail sales and manufacturing output data....While expectations for a September rate rise have faded, a new Reuters poll of 100 economists showed a median 70 percent chance of an increase in December."

lalaland The Fed Used Jackson Hole to Plan Negative Rates -Mauldin/Tumblr
"Jackson Hole revealed things that did not make it into reports by the mainstream media. Turns out, the academic and philosophical underpinnings were being laid down for a radical expansion of the Federal Reserve’s toolbox. The unthinkable policy that I’ve been warning about since last May - yes, we’re talking negative rates - was not only discussed at Jackson Hole, it was discussed in a positive, even slavishly approving, manner....Yellen went from being unsure that the Fed had legal authority to use negative rates to having no doubt that it could. That’s not a small shift. It tells us that somewhere deep in the bowels of the Fed, someone is cooking up some NIRP contingency plans. Having established that it has legal authority to use NIRP, the Fed can now develop specific plans for doing so."

Back on August 30th, we reported the Jackson Hole meeting of the financial elite included a discussion on The Case for Unencumbering Interest Rate Policy at the Zero Bound- Marvin Goodfriend, as reported by, which concluded, "Our takeaway was that this document was not just a discussion on NIRP risk and how to assess if/when to use it. This was also an answer key on how to make it happen. And among those recommendations was to 'Abolish Paper Currency'." Yes, behind the scenes central bankers are planning to steer interest rates downward as well as abolish cash as fast as possible, as we cover in TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.

How Love Translates Into Gold -Holmes/Business Insider
“Loyal readers know that the Fear Trade is associated with negative real interest rates and excessive money supply, which triggers an imbalance of monetary and fiscal policies and macroeconomic uncertainty. Historically, investors in the U.S., Japan, Germany and the U.K. have been the main drivers of the global Fear Trade. The Love Trade, on the other hand, is all about gold’s powerful allure and its timeless role as a gift without peer. It has two significant benefits: one, as beautiful gold jewelry to be worn, and two, as financial security. Although gold jewelry is often given as a special gift in Western countries, it pales in comparison to what takes place in China and India, or ‘Chindia’- home to about 40 percent of the world’s population, and the two largest gold importers.....Significant to boosting the metal’s price are important cultural events, from India’s upcoming Diwali festival and fourth-quarter wedding season to the Chinese New Year in January. Going back decades, the yellow metal has tended to perform best in September, when jewelry, coin and bullion dealers restock their inventories in preparation for these celebrations."

Economic Freedom of the World -CATO
"The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through markets, modern living standards would be impossible....The United States, once considered a bastion of economic freedom, ranks 16th for a second consecutive year with a score of 7.75. Due to a weakening rule of law, increasing regulation, and the ramifications of wars on terrorism and drugs, the United States has seen its economic freedom score plummet in recent years, compared to 2000 when it ranked second globally."

Fifty years ago Alan Greenspan wrote, "Gold and freedom are inseparable." As freedom in America ebbs it is important to own more gold to offset the consequences. "Bad money drives good morals out of society," writes Swiss America Chairman Craig R. Smith in his upcoming book, Money, Morality & The Machine, due for release in early October. (Get a Free Book Preview here)

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