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8.24.16 - Fed Credibility on the Line Friday

Gold last traded at $1,329 an ounce. Silver at $18.68 an ounce.

NEWS SUMMARY: Precious metal prices fell Wednesday after short-term speculators sold $1.5B in gold future contracts. U.S. stocks drifted lower again awaiting fresh direction from Fed speak on Friday.

Major banks, ICAP join up to create digital currency -Seeking Alpha
"UBS, Deutsche Bank, Santander, BNY Mellon and broker ICAP have teamed up to create a digital currency called the 'utility settlement coin'. The firms hope that the currency will become an industry standard used to clear and settle financial trades over blockchain, the technology that bitcoin is based on. The banks and ICAP are pitching the idea to central banks and hope to launch the utility settlement coin in early 2018. The project is competing with similar initiatives from the likes of Citibank, Goldman Sachs and JPMorgan, which are developing separate digital currencies."

inflation chart Rates down, inflation up: it's 'never been worse' for cash savers -Telegraph
"The plight of cash savers will worsen rapidly in coming months, economists warn, as the twin trends of rising living costs and falling returns intensify. A combination of falling interest rates and an uptick in inflation means most cash deposits are already losing value....If inflation now rises to 3%, it's possible that inflation will reach a record multiple of the rates payable on cash - maybe even of as much as ten times."

'Angry White Male' New Book Release -Wayne Allyn Root/Amazon
"The mainstream media and ultra-liberal Democrats can’t understand why white voters, especially white men, are so angry. Wayne Allyn Root is an angry white male, and he knows why. This is his story, his testimony, and a look at what’s happening to an entire group of good people: law-abiding, tax-paying, hard-working, middle-class people. Root has declared 2016 the year of the 'Angry White Male' - a demographic he calls 'the soccer moms of the 2016 election.' In this explosive new book, 'the Trump phenomenon' is seen through the eyes of the ultimate angry white male who is determined to save the middle class. According to Root, 'What has been done to the predominantly white middle class in the past eight years is unimaginable and mind- numbing. You need to face the truth before you can act on it....That action starts with putting a plan in place to protect yourself and save our nation.'"

Jackson Hole: the three tough questions central banks must ask themselves -Telegraph
"The men and women who control the global monetary system get together for three days to debate the challenges facing the world economy – and how they might use monetary policy to fix it. This year’s title is ‘Designing Resilient Monetary Policy Frameworks for the Future’, which could mean almost anything. The markets are waiting for some clues from the Fed chairman Janet Yellen on whether there will be another rate rise this year. In truth, however, a quarter point on rates won’t make much difference. Instead, in a world awash with printed money, with deflation becoming permanent, with bonds from major economies paying negative yields, and with weirder and weirder experiments, from below-zero rates to abolishing cash, gaining increasing traction, they would be better off taking a look at themselves, and asking some hard questions. Here are three good ones to start with: is quantitative easing actually working? Have we broken the banking system? And isn’t it time to update economic models that no longer tell us much about the real world?”

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8.23.16 - The Secret War on Cash Defined

Gold last traded at $1,346 an ounce. Silver at $18.92 an ounce.

NEWS SUMMARY: Precious metal prices rose Tuesday on Fed rate speculation and a weaker U.S. dollar. U.S. stocks inched higher as investors analyzed upbeat housing data, rising oil prices and looked ahead to Fed Chair Janet Yellen's speech.

Should Precious Metals Be a Core Holding in Investors’ Portfolios? -Think Advisor
“Steven Dunn, executive director and head of U.S. for ETF Securities, makes a compelling case for precious metals like gold, silver, platinum and palladium to be a core holding in investors’ portfolios. ‘There’s a good case for [precious metals] being a core holding of your portfolio,’ Dunn told ThinkAdvisor. ‘It may not be 20% of your portfolio, but maybe a core 5% of your portfolio.’....‘In 2016 we’ve been spending a lot more time talking to advisors about the role [of precious metals] within a portfolio, the percentage they should play within a portfolio,’ Dunn said. ‘We’re trying to make the case that commodities should never be zero, because they do some really great things in your portfolios. Typically they lower your overall risk portfolio, they bring you diversification through low correlation, and they provide you with a little bit of a performance boost.’”

Whether 5% or 20% of a portfolio, gold should be a part of your core holdings as Mr. Dunn explains. Learn more about the common sense of owning physical gold in today's uncertain world of virtual money by reading our 2016 Gold Report - World Edition.

secret war Author Explains The Secret War on Cash -Wall Street Raw (LISTEN)
Author and Swiss America Chairman Craig R. Smith discusses his book Don't Bank On It! The Unsafe World of 21st Century Banking with Wall Street Raw host Mark Leibovit. According to Mr. Smith, most bank depositors are unaware of the new risks to them, which could include being presumed guilty of a crime simply by holding or withdrawing cash from your own bank account, which is detailed in his White Paper: The Secret War on Cash. Mr. Smith also answers Mark's questions about the prospects for the future of gold and the U.S. dollar in 2016 and over the longer term. "We have a currency war going on worldwide and it's a race to the bottom," says Craig. (listen to interview)

Dollar Weakness and Fed Expectations -Real Clear Markets
"The US dollar has fallen against all the major currencies this month. Even the pound has gained about 0.3% against the heavy greenback. What is most striking about the dollar's decline is that is has taken place despite a modest upgrade of the odds of a Fed hike....The odds implied by the pricing of the Fed funds futures have also increased....There is precedent for the Fed to adjust policy in September of a national election year, but there is no precedent for a November move. Everyone seems to recognize this. We think it is a misreading of the odds to suggest that there is a greater chance of a hike in November than September."

"It's Scary Quiet": The Past Month Has Seen The Least Volatility Since 1995 -Zero Hedge
"Right on cue, this morning the Wall Street Journal pointed out that 'the past 30 days have been the least volatile of any 30-day period in more than two decades.' In fact, they point out that only 5 days during the most recent stretch has the S&P 500 moved by more than 0.5%, which is the lowest since 1995....'Everything feels distorted and unnatural; you know the source of that is the central banks but equally there’s nothing to stop them carrying on,' said Matt King, head of credit strategy at Citigroup....As the WSJ points out, the danger is not so much complacency about markets, but complacency about central banks....Yes, central banks, to this point, have stepped up to protect markets at every sign of 'stress.' The problem is that with each new step taken by the Fed they're running out of ammunition."

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8.22.16 - Is the central bank crying wolf?

Gold last traded at $1,343 an ounce. Silver at $18.85 an ounce.

NEWS SUMMARY: Precious metal prices traded steady Monday on a flat dollar and Fed speculation. U.S. stocks drifted lower as oil prices shed 3% and all eyes turn to conjecture regarding the content of Yellen's Friday speech.

It could be a tough week for Janet Yellen -Forbes
"Fed Chair Janet Yellen has the tough task in the week ahead of speaking to markets that are looking for more guidance than she may be able to provide. Yellen's speech in Jackson Hole, Wyoming, on Friday has been anticipated for weeks, and especially in the last several days after Fed speakers suggested the Fed could raise rates as early as September....'I wish we had a Fed speak [volatility index]. I'm telling you it just spiked through the roof. It's all over the map. I'm confused about what they're trying to do,' said James Paulsen, chief investment strategist with Wells Capital Management. 'We've got people talking out of every side of their mouth. The Fed VIX is at its highest ever.'"

When will The Biggest Bank Heist in History ever end? Stay tuned...

Yellen wolf The central bank that cried wolf? Talk of higher U.S. interest rates is often just that -Marketwatch
"Two years ago, a prominent central banker suggested interest rates could rise 'sooner than you think' after an unprecedented five-year stretch of easy money. Earlier this week New York Federal Reserve President William Dudley issued a similar warning to financial markets.... The U.S. central bank is more likely than not to raise interest rates before the end of 2016, but the timing is still an open question. Dudley strongly implied a rate hike could come as soon as September....Yet the Fed has been on the cusp of rate hikes several times since 2013 — recall the famous taper tantrum — and it seemed on the verge of acting just last spring before backing off....A problem for the Fed, though, is that raising rates could strengthen the dollar at a time when most central banks are doing like the Bank of England and cutting them."

James Grant: "This Will Turn Out To Be Very Bad For Many People" -Zero Hedge
"From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy. This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter Grant’s Interest Rate Observer is one of the most ardent critics when it comes to super easy monetary policy. Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market....According to Grant, 'Gold is money and money is sterile, as Aristotle would remind us. It does not pay dividends or earn income. So keep in mind that gold is not a conventional investment. That’s why I don’t want to suggest that it is the one and only thing that people should have their money in. But to me, gold is a very timely way to invest in monetary disorder.'"

As usual, James Grant is spot on in his articulation of both the present "reckless" economic environment and the simplest solution; come to grips with the reality that gold is money. It's liquid worldwide, a proven store of value and the antidote to accelerating monetary disorder. Read our 2016 Gold Report - World Edition.

How This Hedge Fund Robot Outsmarted Its Human Master -Bloomberg
"Yoshinori Nomura felt like weeping. It was the morning of June 24, Brexit day, and markets were moving against him....Then, in an instant, everything changed. When new vote counts signaled Britain was going to leave the European Union, a burst of selling sent Japanese shares to their biggest drop in five years. By luck or design, Nomura’s Simplex Equity Futures Strategy Fund ended the day with a 3.4 percent gain, one of its best results in three months of trading. 'The machine was right after all,' said Nomura, who spent more than three years refining his trading program and now oversees about 3.5 billion yen ($35 million) in the fund, one of the first in Japan to utilize artificial intelligence technology.... 'As every day goes by, the machine becomes more intelligent. It’s going to be a brave new world.'"

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