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10.26.16 - Obamacare Costs Skyrocket

Gold last traded at $1,266 an ounce. Silver at $17.62 an ounce.

NEWS SUMMARY: Precious metal prices eased slightly Wednesday as short-term speculators took profits. U.S. stocks traded mostly lower amid oil price weakness and disappointing earnings from tech giant Apple.

This Tech Will Kill Cash -Daily Reckoning
"Still waiting on your deadbeat friend to pay you back for that lunch you shared two months ago? PayPal’s popular new payment app has a solution for you. The app is called Venmo - and it’s quickly becoming an everyday name in the mobile payments game. Venmo’s growing success makes PayPal the top dog in mobile payments. In the last quarter alone Venmo processed $4.9 billion in payments, the Wall Street Journal reports. And that’s not all. It’s well on its way to processing $20 billion by the end of the year. That’s a lot of coffee… Cash is dead. Whether you like it or not, currency is going digital. The days of pulling a wad of greasy bills out of your pocket are numbered."

Cash is under attack from virtually every side - government, banks and technology - as we explained in our 2014 book, Don't Bank On It! Use of cash could get you branded as a criminal. Capital controls are already being put in place to prevent bank runs. Get the full story in our 12-page White Paper: The Secret War on Cash.

Map: Here's where Obamacare premiums are rising -Washington Examiner
"The Obama administration announced Monday that Obamacare premiums will rise by an average 25 percent in the 39 states that use the federal insurance exchange instead of their own state marketplace....Check the map below to see the average increase in Obamacare premiums in your state. The increase or decrease shown reflects the average change for a 27-year-old buying the second-lowest-cost silver plan under Obamacare, which is the benchmark plan used to determine subsidy levels. (Most states that use their own exchanges won't show any data in the map below, as the increase applies only to those states using the federal government's website. California, Connecticut, Massachusetts and Minnesota provided data from their marketplaces.)"

Obamacare costs

The Boredom Before The Storm - Zero Hedge
"With all the surprising and/or disturbing things going on – Brexit, China’s soaring debt, US/Russia/China saber rattling, the, um, unique US presidential race, the cyber attack that shut down big parts of the US Internet – you’d think that an unsettled world would be reflected in skittish financial markets. Instead we’re getting the opposite, with stock price movements becoming more and more placid as the year goes on....So it’s a safe bet that 2017 will be in many ways a mirror image of 2016. US politics will be decided if not settled, government spending will stop spiking, and equities will return – possibly suddenly – to more historically normal valuations....And precious metals, because they attract fearful capital, should benefit from the coming anxiety spike. Last time around – after an initial plunge – gold, silver and the shares of the companies that mine them embarked on a multi-year run that made them the best performing assets of the decade."

Now is the perfect time to prepare your portfolio for 'the coming anxiety spike' next year. Discover why now is an excellent window of opportunity to protect your hard-earned money with hard-owned money in our 2016 Gold Report - World Edition

The Epidemic of Worry -Brooks/New York Times
"We’ve had a tutorial on worry this year. The election campaign isn’t really about policy proposals, issue solutions or even hope. It’s led by two candidates who arouse gargantuan anxieties, fear and hatred in their opponents. As a result, some mental health therapists are reporting that three-quarters of their patients are mentioning significant election-related anxiety....Worry alters the atmosphere of the mind. It shrinks your awareness of the present and your ability to enjoy what’s around you right now. It cycles possible bad futures around in your head and forces you to live in dreadful future scenarios, 90 percent of which will never come true. Pretty soon you are seeing the world through a dirty windshield. Worry dims every sunrise and amplifies mistrust....Many affluent people use money to buy privacy, and so cut themselves off from both the deep relationships that could give them purpose and the neighborly support systems that could hold them up if things go south....But the answer to worry is the same as the answer to fear: direct action....If you’re worrying, you’re spiraling into your own narcissistic pool. But concrete plans and actions thrust us into the daily fact of other people’s lives. This campaign will soon be over, and governing, thank God, will soon return."

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10.25.16 - Inflation Killing Money's Value

Gold last traded at $1,273 an ounce. Silver at $17.78 an ounce.

NEWS SUMMARY: Precious metal prices traded sharply higher Tuesday amid strong seasonal demand from India, Fed uncertainty and a flat dollar. U.S. stocks fell on disappointing earnings, weak consumer confidence and lower oil prices.

How One Billionaire Became A Gold Bug -Zero Hedge
'Hugo Salinas-Price, a hard currency advocate, and the founder of Mexico’s Elektra retail chain explains in the following guest post how he became a gold bug. 'I was born in 1932. As a little boy, I loved to play in my father's store after school hours, and one afternoon when I was perhaps eight years' old, one of the salesmen took two gold coins out of his vest pockets (men wore vests in those days)....A couple of years later, when my father was driving home after the store closed, he pulled out a lottery ticket from his coat and said: "This lottery ticket did not win a prize, but it did win a refund of $100 pesos. I'll give you the refund. What would you like to buy with the refund?" I unhesitatingly replied: "Buy me some gold coins!"....I went home with my gold coins, and promptly put them in my father's safe, to which he gave me the combination. They were really the only thing of value in the safe, and from time to time, I used to open the safe to examine the beautiful gold coins. So that's how I became a gold-bug at age 10....What happened to my little stash of ten $2 peso gold coins? I still have them, after all these long years - I am now 84. Slowly but surely, they are growing in value, and they are still obtainable today, in exchange for $1,523 pesos each as of this date. These are really $1,523,000 pesos if we take away the artificial revaluation of our Mexican money in 1993, when every $1000 pesos was converted into $1 "new" peso. So my gold coins went from $10 silver pesos in 1942, to $1,523,000 paper pesos in the course of about 74 years.'"

Will The Fed Go Dovish (Again)? -Hedge Eye
"Déjà vu. Fed officials are talking up a December rate hike yet again. Q: What's changed between today and the last time the Fed raised rates on December 16, 2015? A: Their overly-optimistic economic projections have been cut. (If this seems ridiculous.. it's because it is ridiculous.) Yellen and her team of academic economists have had to cut their forecasts to reflect U.S. economic reality. As you can see in the Chart of the Day (from today's Early Look), U.S. GDP growth (year-over-year) has been in steady decline from 3.3% in March 2015 to 1.2% in June. Meanwhile, the median Fed projection for U.S. economic growth in 2016 is 1.8%. Note: That's down from an estimate of 2.4% following the last Fed rate increase in December....So, GDP falling to 1.2% is reason to raise rates? Yet again, the Fed is disconnected from reality."

output chart

America’s biggest banks have announced their Venmo competitor, Zelle -Recode
"After months of speculation, America’s biggest banks tonight announced Zelle, a money-transfer app they are backing that will compete against PayPal, Venmo and Square Cash. The Zelle app is built atop a bank-owned payments network that connects the country’s five biggest banks - and others - including Chase, Citi and Bank of America. Users of Zelle are expected to be able to send money via their phones to recipients who will gain access to the funds immediately....Many money-transfer services are currently money-losing offerings. But PayPal, which owns Venmo, likes that the service is popular with millennials who 'Venmo' each other for expenses like shared meals and rent."

If you still doubt that governments and bankers worldwide have declared a 'war on cash' and that a cashless world is about to change your life in a bad way, we suggest reading TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.

Six Things to Consider About Inflation -Valuewalk
“As an economic term, ‘inflation’ is shorthand for ‘inflation of the money supply.’ The general public, however, usually takes it to mean ‘rising prices’ which is not surprising since one of the common effects of an increase in the money supply is higher prices. However, supporters of government policy often say, ‘If quantitative easing (QE) and its terrible twin, fractional reserve banking, are so awful, why have we got no inflation?’ To address this conundrum, there are six related factors that are noteworthy: Number One: we need to be clear about the terms we are using. Instead of talking about ‘inflation’ in the loose sense, as above, it is more accurate to speak of currency debasement, which is the real impact of fiat money creation by any means. Number Two: the above question overlooks the fact that the measures used in this process are inherently unreliable....Number Three: newly created fiat money must go somewhere - and so it goes into the grasp of its first receivers, the banks, the financial institutions, government institutions, and urban moneyed classes who least need it - widening the gap between rich and poor. Number Four: The European Central Bank (ECB) is no slouch when it comes to money creation out of thin air, and banks within the euro zone have therefore come to rely on it for survival. Number Five: In the same vein, you have no doubt heard reference to ‘helicopter money.’ This is a variant of QE favored by certain politicians who talk blithely about the need for ‘QE for the people.’ Number Six: the final point concerns the corrosive effect of the deliberate and utterly misguided suppression of interest rates which, if they were allowed to find their own market level, would represent the time-value of money, or what the private sector is prepared to pay for liquidity - either for spending now or saving for future spending.”

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10.24.16 - 2017's Ticking Time Bomb

Gold last traded at $1,263 an ounce. Silver at $17.60 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Monday amid rising uncertainty and a firmer dollar. U.S. stocks traded higher, getting a lift from merger announcements including AT&T’s planned acquisition of Time Warner.

Mobius Says Gold Will Gain in 2017 as Fed Goes Slow on Hikes -Bloomberg
"Gold is set to advance by as much as 15 percent before the end of next year as the Federal Reserve goes slow on increasing interest rates and the dollar remains subdued, buoying bullion demand, according to Templeton Emerging Markets Group. 'The Fed is going to increase the rates by a little bit but not excessively and there is no guarantee that a rise in interest rates will put people off,' Executive Chairman Mark Mobius said in an interview at a Bloomberg event in Mumbai....Bullion has rallied 19 percent in 2016 as concern over the health of the global economy, loose monetary policies and the U.K.’s vote to leave the European Union fanned demand....'The U.S. dollar is not that strong and may even decline,' said Mobius, who also highlighted prospects for increased central bank buying of bullion. 'So if that happens, gold gets more expensive.'"

inflation Inflation: next year's ticking time bomb -Evans-Pritchard/Telegraph
"The last time sterling fell off a cliff we were in the midst of global financial crisis from 2007 to 2008. The currency shock sent inflation shooting up to 5.2%, abruptly squeezing on real living standards....This time the most vulnerable families will take the brunt as the cost of imported food, clothes, and fuel suddenly jump. A parting gift of the last Government was to freeze benefits for 11.5 million households until 2020....This is a political time bomb that will detonate next year when the inflation ‘pass-through’ from imports bites in earnest. It threatens to poison the already fractious national debate unless steps are taken to mitigate the damage....For central bankers, inflation is not the terrible specter it used to be. Most of the developed world is fighting secular deflation, the opposite and more dangerous enemy....Is it possible the UK will face rising inflation and recession at the same time? Unfortunately it is."

According to a growing number of astute economists, stagflation (slowing economy with rising inflation) is about to rear its ugly head in 2017. The truth is governments and central banks have had a very long love affair with inflation - especially the type of hidden inflation which we've seen in the U.S. over the last decade - thanks to the Fed's policy of "financial repression". But a day of reckoning always arrives. Now is the time to prepare your portfolio for an inflation spike next year. Read more in our 2016 Gold Report - World Edition

Major banks mark first-ever international trade using blockchain tech -Reuters/Yahoo
"The first cross-border transaction between banks using multiple blockchain applications has taken place, Commonwealth Bank of Australia and Wells Fargo & Co said on Monday, resulting in a shipment of cotton to China from the United States....Blockchain is a web-based transaction-processing and settlement system whose efficiency banks say could slash costs....Led by a consortium of over 70 of the world's biggest financial institutions - called R3 - the banking industry has been researching ways to harness the speed, accuracy and efficiency afforded by blockchain....Wells Fargo's head of international trade services, Chris Lewis, said in the statement that his bank was committed to new technology. He also said 'significant regulatory, legal and other concerns remain to be addressed.'"

"We are witnessing the beginning of the end of money as we know it," says monetary expert Craig Smith. In his new book Money, Morality & The Machine, Smith explains why 'bad money drives out good money' as well as why bad money drives out good values in society. (Amazing free book offer!)

What The Media Missed About The $85 Billion AT&T-Time Warner Deal -Hedge Eye
"The headline news in mainstream media today is AT&T's offer to buy Time Warner for $85 billion over the weekend. Contextualizing the why behind the deal unlocks actual investing implications for investors. On that point, the media was decidedly silent. In this morning's Early Look, Hedgeye CEO Keith McCullough compares the combining of two 'legacy telcos' to 'tying two rocks together and seeing if they float.' AT&T missed inflated Wall Street earnings expectations last Thursday. The stock is down about 7% since then, as investors were unimpressed by the deal and fled an industry in secular decline. Investors were right to head for the hills. At end of the cycle, there is always a flurry of mergers and acquisitions as companies buy other companies to pad their slowing financial results (see Q2 2007). Then the cycle falls off a cliff and the economy dips into recession. In other words, M&A is a classic late cycle indicator....In short, the AT&T/Time Warner is yet another example of past peak M&A and confirmation that the U.S. economy continues the trend of down, down, down."

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10.21.16 - Can Gold Make America Great Again?

Gold last traded at $1,267 an ounce. Silver at $17.49 an ounce.

NEWS SUMMARY: Precious metal prices held firm Friday, despite a higher dollar on technical buying and bargain hunting. U.S. equities fell again, pressured by a strong dollar and disappointing telecommunications earnings.

Gold Bug Jim Grant Says The Fed Is Bluffing -Kitco
"The Fed is bluffing, and no matter what happens with interest rates, it might be best for investors to stick with gold, this according to widely known Fed critic and Wall Street pundit Jim Grant. Speaking with Kitco News, he argued that the gold price will not be driven by the next move by the Federal Reserve, although most recent gold price fluctuations have been the result of shifting rate hike expectations. Instead, 'it’s the revelation that we’re walking – or running – down the wrong path, and that we must regroup and formulate a monetary policy that’s based upon a lasting standard of value,' the popular newsletter publisher said. 'I think a bet on gold, to me, is actually an investment in monetary disorder. It’s not a hedge against it because we have monetary disorder; I think what us, gold bugs are waiting for is the spreading perception that we have monetary disorder.' To Grant, central bankers’ policies around the world will make investors either 'end in tears' or 'laughter,' depending on how people position themselves."

gold liberty Memo to President Trump or President Clinton: The Gold Standard Made America Both Good and Great - The Pulse 2016
"Marc Levinson writing recently in The Wall Street Journal provides a very pessimistic view for the American Dream, 'Why the Economy Doesn’t Roar Anymore: The long boom after World War II left Americans with unrealistic expectations, but there’s no going back to that unusual Golden Age:...Ever since the Golden Age vanished amid the gasoline lines of 1973, political leaders in every wealthy country have insisted that the right policies will bring back those heady days. Voters who have been trained to expect that their leaders can deliver something more than ordinary are likely to find reality disappointing.' Levinson, whose column uses 'Golden Age' as its leitmotif, strangely fails to make the connection, or even explore, the fact that the era he calls the Golden Age correlated precisely with America (and the world) being on a form of gold standard, particularly the modified gold standard known as the Bretton Woods System. Bretton Woods was finally, formally, ended in 1973, the very year that Levinson points to as the end of the Golden Age....Whether Trump or Clinton wins, America’s economic success over the next four years — and their chance of re-election — will depend in large measure on 'It’s the economy, Smarty,' getting job growth and upward income mobility going for workers. To achieve equitable prosperity, the next president will need to be really smart about, rather than neglecting, monetary policy."

Wynn: Printing Money Degrades Living Standard, Causes Anger; Healthcare Goes Up, Product Doesn't Get Better -Real Clear Politics
"Casino magnate Steve Wynn expresses his disappointment at the lack of discussion of the economy during the course of the presidential election in an interview on Thursday's Hannity....Wynn said the printing of money by the U.S. Treasury under the guidance from the U.S. Federal Reserve and the national debt have not been properly addressed albeit a short segment at the final debate....'Our government is printing money and it's degrading the living standard of every person in America. It's the cause of frustration, anger and confusion.'....Wynn on healthcare: WYNN: 'I can tell you, after speaking to my 12 or 13,000 employees, that there is tremendous confusion and dissatisfaction with the cost of health care, all of my employees increased health care costs in spite of the fact the company picked up most of the increases but yet they have the same policy that they had before. They paid more money but did not get more coverage.'"

“Cheapening our dollar has been very expensive,” says Lowell Ponte, a former Roving Editor at Reader's Digest and co-author of the new book Money, Morality & The Machine: Smith's Law in an Unethical, Over-Governed Age. “This Great Debasement of our currency has replaced the American Dream of our Founders with a society based on political cronyism, European-like socialist welfare dependency on government, class and race warfare and violence, a decline in religious faith and moral values, a fading work ethic, soaring taxes, a $19.5 Trillion national debt, and a dollar worth only about 2 pennies of the purchasing power of a 1912 dollar.” (Amazing free book offer!)

Obamacare Premiums Up 30% In TX, MS, KS; 50% In IL, AZ, PA; 93% In NM: When Does The Death Spiral Blow Up? -Zero Hedge
"Congratulations are in order for those living in a handful of states whose premiums only rose 20%. The Wall Street Journal reports 'Rate Increases for Health Plans Pose Serious Test for Obama’s Signature Law'. Approved Hikes Just Under 20%: Colorado, Florida and Idaho, Approved Hikes 20% to 29%: Connecticut, Georgia, Indiana, Kentucky, Maine, Maryland,Approved Hikes 30% to 49%: Alabama, Delaware, Hawaii, Kansas, Mississippi, Texas, Approved Hikes 50% to 92%: Arizona, Illinois, Montana, Oklahoma, Pennsylvania, Tennessee, Approved hikes 93%: New Mexico....Rep. Michael Burgess M.D., Rep. Tom Price M.D., and Rep. Phil Roe M.D., all doctors, say ObamaCare is About to Collapse."

Global Markets Stumble into a High-Debt, Low-Investment 2017 -Bloomberg
"There’s a scene in the 2004 movie Sideways where a sloppy, depressed Paul Giamatti gulps from the spit bucket at a wine-tasting bar. That’s probably worse than what International Monetary Fund chief economist Maurice Obstfeld had in mind when he said in October, while presenting the fund’s 2017 outlook, that ‘taken as a whole, the world economy is moving sideways.’....Describing where the rich countries stand almost a decade after the worst financial blowup since the Great Depression, Obstfeld said: ‘The crisis has left a cocktail of interacting legacies — high debt overhangs, nonperforming loans on banks’ books, deflationary pressures, low investment, and eroded human capital — that continue to depress potential investment levels.’ The problem? Years of disappointing growth have caused the public to worry that this is the new normal and that governments and central bankers have no clue how to make it better. Pessimistic consumers are holding back on spending, while businesses aren’t putting money into buildings, equipment, or software. Their reticence slows things down even more. Disappointment breeds more disappointment."

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10.20.16 - The Cost of a Democratic Landslide

Gold last traded at $1,267 an ounce. Silver at $17.54 an ounce.

NEWS SUMMARY: Precious metal prices steadied Thursday as the U.S. dollar was lifted by EU bank inaction. Stocks end lower as oil prices shed over 2%, consumer confidence fell and the European Central Bank stood pat on interest rates.

Fed risks repeating Lehman blunder as US recession storm gathers -Evans-Pritchard/Telegraph
"The risk of a US recession next year is rising fast. The Federal Reserve has no margin for error. Liquidity is suddenly drying up. Early warning indicators from US 'flow of funds' data point to an incipent squeeze, the long-feared capitulation after five successive quarters of declining corporate profits. 'We are seeing a serious deterioration on a monthly basis,' said Michael Howell from CrossBorder Capital, specialists in global liquidity. The signals lead the economic cycle by six to nine months. 'We think the US is heading for recession by the Spring of 2017. It is absolutely bonkers for the Fed to even think about raising rates right now,' he said....Stanley Fischer, the Fed's vice-chairman, conceded in a grim speech this week that the Fed has now run out of ammunition and that this 'could therefore lead to longer and deeper recessions when the economy is hit by negative shocks.'....A President Hillary Clinton could and certainly would flood the economy with fiscal stimulus if need be. Yet this takes time. There are few 'shovel-ready' projects, and Washington is a fractious place."

Senate Democratic Landslide? What It Means For Investors -Hedge Eye
"Investors don't fully appreciate what could happen when the next president is sworn in on Inauguration Day, January 20, 2017. With all eyes on Trump versus Clinton, pundits, politicians, and the investing public are sleeping on the ramifications of 2016 Congressional races. Whether it be raising the minimum wage, taxation, infrastructure spending or regulation, Democrats and Republicans differ radically on these issues....Hedgeye Director of Research Daryl Jones what this means in today's Early Look. Did you know, Jones writes, that which way the Senate tips will impact whether firebrand Vermont Senator Bernie Sanders becomes the ranking member on the Senate Budget Committee (in the minority) or the Senate Budget Committee Chairperson? In other words, based on current polling, it's likely that the man who once described himself as a 'socialist' will oversee the drafting of Congress's annual budget. While it's interesting that Democratic candidate Hillary Clinton currently leads the GOP's Donald Trump by +6.4% in Real Clear Politics polling, and gives Clinton an 85% probability of winning the election. The Congressional races are what we should actually be watching."

Hello Inflation, Central Banks Salute You -The Street
"Just like Caesar's gladiators, central banks might be in danger of meeting their end in the service of their master: inflation. And as the master has just joined the arena, the show can begin. Ever since the financial crisis, central banks all over the world have cut interest rates, bought increasingly risky securities and cooed in all the dovish tonalities available in order to push prices up again. This is because the world economy is creaking under the burden of huge debts, and the only way out of it other than straightforward debt forgiveness is massive inflation to erode it....In the Eurozone, inflation expectations are at their highest since early June; in the U.S., consumer prices saw their biggest rise in five months in September; in the U.K., inflation has already exceeded expectations, printing 1% for September vs. 0.9% forecast. This is where it becomes really dangerous for central banks."

Deutsche Bank to pay $38 million in U.S. silver price-fixing case -Reuters
"Deutsche Bank AG has agreed to pay $38 million to settle U.S. litigation over allegations it illegally conspired with other banks to fix silver prices at the expense of investors, according to court papers filed on Monday....The settlement had been expected since April, though terms had yet to be disclosed. In court papers, lawyers for the investors say the deal will likely be an 'ice breaker' that will serve as a catalyst for other banks to settle....The alleged conspiracy started by 1999, suppressed prices on roughly $30 billion of silver and silver financial instruments traded each year, and enabled the banks to pocket returns that could top 100 percent annualized, the investors said."

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