Gold Standard News Daily - Real Money Blog
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2.5.16 - 2016: YEAR OF THE GOLDEN MONKEY
Gold last traded at $1,157 an ounce. Silver at $14.77 an ounce.
NEWS SUMMARY: U.S. stocks fell on Friday as mixed U.S. employment data raised concerns the Fed may be unable to raise rates this year. Meanwhile, precious metal prices shot up nearly 5% this week, despite a firmer dollar.
Is the REAL unemployment rate 4.9% or 9.9%? -CNBC
"The Labor Department said Friday that the U.S. unemployment rate fell to 4.9 percent in January, the lowest since February 2008. But does that tell the whole story? Most economists look past the main unemployment number (also known as the "U-3") to other metrics that provide more perspectives on the economy. While the U-3 rate measures all unemployed workers as a percent of the civilian labor force, the U-6 includes more. It's defined as all unemployed as well as 'persons marginally attached to the labor force, plus total employed part time for economic reasons' plus all marginally attached workers, as a percentage of the labor force. That means the rate for the unemployed, the underemployed and the discouraged remains stubbornly above pre-recession levels. The U-6 rate remained unchanged at 9.9 percent in January."
Year of the Monkey: Another Stellar New Year for Gold? -Forbes
"Since the start of the year, gold prices have managed to jump back to multi-month highs as investors looked for a safe haven from tumbling equity and oil prices, and as concerns over the Chinese economy mounted....The unexpected rally seen in gold has propelled retail demand higher, with market participants expecting the trend to continue. Celebrated annually, the Chinese New Year is traditionally a time for exchanging tokens and gifts of money in red envelopes, which is also why gold demand tends to rise during this time of year. However, China’s affinity for gold doesn’t seem like it is going to fade anytime soon, especially as investors continue to seek safe havens and as the country’s central bank looks to increase its gold reserves."
Futurist and author Lowell Ponte will be a guest on Coast to Coast with George Noory Monday, Feb. 8th (midnight-2am PST) discussing the economic implications of the Chinese new year. Lowell writes, "The Year of the Monkey in Chinese astrology is a metal sign connected to gold. 2016 might be a prudently lucky year to diversify and balance your investment portfolio with gold to hedge against what politicians here and abroad are doing to devalue our paper currency."
Citi: World economy trapped in ‘death spiral’ -CNBC
"The global economy seems trapped in a 'death spiral' that could lead to further weakness in oil prices, recession and a serious equity bear market, Citi strategists have warned. Some analysts - including those at Citi - have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S. 'The world appears to be trapped in a circular reference death spiral,' Citi strategists led by Jonathan Stubbs said in a report on Thursday....Stubbs said that macro strategists at Citi forecast that the dollar would weaken in 2016 and that oil prices were likely bottoming, potentially providing some light at the end of the tunnel."
Right now is the perfect time to take some stock market profits off the table and convert them into physical gold - before a 'death spiral' drags down your portfolio further. Get the BIG picture for the year ahead in our 2016 newsletter, RIGHT ON THE MONEY.
Chicago Stock Exchange Being Sold to Chinese -Bloomberg
"The Chicago Stock Exchange said a Chinese investor group agreed to acquire it, giving the buyer entry into the intensely competitive U.S. equity market. Chongqing Casin Enterprise Group has signed a definitive agreement to acquire the company, according to a statement Friday, which didn’t give financial terms. The exchange said the deal is expected to close in the second half of the year, though that will require regulatory approval....The acquisition would be the first of a U.S. exchange by a Chinese company. The 134-year-old bourse, which handles about 0.5 percent of U.S. stock trading, would give the buyer a beachhead in the $22 trillion American equity market, where regulations require trades to be routed to whichever exchange has the best price for a stock at a given moment."
The Chinese have big plans to dethrone the U.S. as the world's economic leader - which includes replacing the U.S. dollar as the world's reserve currency! Read this shocking new report, The 2016 World Money Report for the full story.
2.4.16 - METALS SHINE AS DOLLAR DETHRONED
Gold last traded at $1,157 an ounce. Silver at $14.85 an ounce.
NEWS SUMMARY: U.S. stocks struggled Thursday amid gyrating oil prices and downbeat economic and jobs data. Meanwhile, precious metal prices rushed to fresh 3-month highs as the U.S. dollar fell sharply for a second day amid fading Fed credibility.
Gold hits three-month peak -Reuters
"Gold built on the previous day's gains on Thursday, edging to a three-month high as global economic and financial headwinds continue to present obstacles to a U.S. interest rate rise in the near term. Commodities rallied across the board on Wednesday as the dollar tumbled after William Dudley, president of the Federal Reserve Bank of New York, said that financial conditions have tightened considerably and the weakening global outlook could have 'significant consequences' for the U.S. economy. Gold has now gained nearly 8 percent since the start of the year as global economic uncertainty has led to volatility in financial markets and pushed investors towards safer assets."
2016 Economic Outlook From Craig R. Smith -Worldview Weekend TV
"Worldview Weekend-TV Presents: Financial News Report For February 2016: Craig Smith joins us to discuss what the drastic drop in oil prices means for the trillions of dollars in derivatives being held by world banks. In 1988 the Economist Magazine ran article about the death of world currencies and the rise of a global currency by 2018. Is the next financial crisis going to see that come to pass? Why are central banks doing that should have us all concerned? These topics and much more is covered in this must see financial report." WATCH NOW
US dollar dives, helping boost oil -Sky News
"The US dollar has tumbled after comments from a Federal Reserve official and a soft services sector report suggested a slowing pace of rate rises, sparking a rally in oil prices that also boosted US equities. 'We're getting the rally in crude oil from the pounding that the dollar is taking,' said Robert Yawger, senior vice president of energy futures at Mizuho Securities USA....The US dollar fell 1.7 per cent against a basket of currencies - its biggest single session loss in two months - while also touching a three-month low."
Since World War II, the U.S. dollar has been viewed as a stable and resilient currency and the preferred exchange of foreign traders and investors alike. But today we are no longer living in an international community solely dominated by a single currency. A world without a 'privileged' dollar is going to be a very different place indeed. Some claim the greenback’s value could plunge as much as 70%. The dethroning of the dollar has the potential to trigger massive inflation, skyrocketing prices of staple goods, higher interest rates, and impossible financing terms for houses, cars, loans, etc. The fallout, fear and contagion could very well dwarf the financial crisis of 2008. To read the full story request our newest Special Report The 2016 World Money Report
Market now predicts ZERO Fed hikes in 2016 -CNN
"Janet Yellen and the Federal Reserve are on another planet. That's the message from global investors who are sending the Fed a big distress call to come back to earth. The Fed is still predicting four interest rate hikes this year, but the market now forecasts zero hikes in 2016. The closely watched Fed Futures market now has a nearly 60% probability of no rate hikes at all this year. It's a dramatic U-turn from only a month ago when the market was pricing in a 75% probability the Fed would increase rates at least once in 2016."
2.3.16 - 2016'S MOST BELOVED ASSET
Gold last traded at $1,141 an ounce. Silver at $14.73 an ounce.
NEWS SUMMARY: U.S. stocks rebounded Wednesday after oil prices shot up over 8% on rising inventories, despite renewed fears of slowing economic growth. Meanwhile, precious metal prices rushed to fresh 3-month highs on safe haven buying and a sharply weaker dollar.
Germany considers cash transaction limits -Associated Press
"The German government is considering introducing a limit of 5,000 euros ($5,450) on cash transactions in an effort to combat money laundering and financing of terrorism. Deputy finance minister Michael Meister said Wednesday that Germany would like to see a European solution, but could introduce a national limit if none is achieved, news agency dpa reported. He said 'we can imagine a level of 5,000 euros.'....Opposition Green Party lawmaker Konstantin von Notz tweeted that trying to limit cash payments 'is a new fundamental attack on data protection and privacy.'"
According to a German news website, Handelsblatt.com, "The Death of Cash" is fast approaching. "John Cryan, the co-chief executive of Deutsche Bank, last week predicted that cash would disappear as a method of payment within 10 years." According to THE SECRET WAR, capital controls on cash deposits and withdrawals are already under way in the U.S. Did you know that under threat of regulatory punishment, banks must now spy on you for the government and report any suspicious cash activity? It's true, financial privacy is fast becoming a thing of the past.
Gold: 2016's most beloved asset -CNN
"Gold bugs are among the only smiling investors these days. Prices have jumped 6% this year to $1,127 an ounce. That makes gold the best performing commodity and one of the only major assets to post a sizable gain in 2016. The precious metal is viewed as a reliable store of value for investors to turn to when they're worried about economic doom. And right now, there's no shortage of exactly that kind of anxiety. Whether it's falling oil prices, trouble in China or geopolitical uncertainty, Wall Street has a long list of worries steering money towards safe havens like gold. 'As we have seen stock markets around the world tumble dramatically, the need to protect capital has increased -- and gold has benefited from that,' said Juan Carlos, director of investment research at the World Gold Council."
2016 marked a major turning point in the U.S. and global financial markets. Amid today's growing financial darkness, gold stands out as the financial light of the world. Gold offers both wealth protection and growth potential. Every day more central bankers are resorting to negative interest rates, which makes gold shine all the brighter. Read The Timeless Truth About Gold & Silver for a BIG-picture overview of the seven timeless truths about gold.
The surprising new case for gold -CNBC
"It is typically argued that rising inflation is necessary for gold prices to rise. However, there's another tantalizing possibility for gold bugs: Perhaps ultra-low inflation could actually send gold prices higher, through the mechanism of negative central bank policy rates. In a continuing battle to combat long-stagnant inflation and economic growth, the Bank of Japan has cut interest rates to negative 0.1 percent. This follows similar moves by Denmark, Sweden and Switzerland....According to currency strategist Boris Schlossberg of BK Asset Management, 'Negative interest rates have provided a fundamental reason to own gold.'"
Fed Testing How Banks Would Handle Negative Rates -Bloomberg
"As interest rates turn negative around the world, the Federal Reserve is asking banks to consider the possibility of the same happening in the U.S. In its annual stress test for 2016, the Fed said it will assess the resilience of big banks to a number of possible situations, including one where the rate on the three-month U.S. Treasury bill stays below zero for a prolonged period. Three-month bill rates have slipped slightly below zero several times in recent years, including in September after the Fed delayed rate liftoff amid global financial market turmoil, touching a low of minus 0.05 percent on Oct. 2."
European banks near 'terrifying' crisis -CNBC
"With European banks sitting at multiyear lows, one widely followed market watcher said some of the biggest ones could go bankrupt. Former hedge fund manager and Goldman Sachs alumnus Raoul Pal said his scenario is one most investors aren't looking at right now. Pal said the banking issues have the potential to overtake risks associated with China's growth slowdown and cheap oil....For Pal, negative interest rates are the chief reason why the bank stocks are in trouble."
2.2.16 - BIG BANKERS MEET SECRETLY
Gold last traded at $1,127 an ounce. Silver at $14.89 an ounce.
NEWS SUMMARY: U.S. stocks tumbled Tuesday as big losses in oil and global equity markets weighed on sentiment. Precious metal prices steadied near 3-month highs on a flat U.S. dollar
HEADLINES WARN: "The financial and banking headlines are screaming a fresh warning," according to author and Swiss America chairman Craig R. Smith, who is growing more concerned daily about the banking and economic risks he detailed in his blockbuster 2014 book, DON'T BANK ON IT! "Secret summits" ... "Rich investors withdraw money" ... "Robo-advisers try to calm investors" - all in the financial headlines today. It is worth noting the last time the world's top bankers met together was back in 2008 - just before the financial crisis erupted. Our readers are able to draw their own conclusions and then take action accordingly.
Top financial groups hold secret summits -CNBC
"The world’s largest asset managers have held secret summit meetings to hammer out proposals for improving public company governance to encourage longer-term investment and reduce friction with shareholders. Jamie Dimon, chief executive of JPMorgan Chase, and Warren Buffett convened the sessions with the heads of BlackRock, Fidelity, Vanguard and Capital Group to work on a new statement of best practice that would cover the relationship between U.S. companies and their investors. The unusual collaboration comes at a time of rising shareholder activism and a raging debate about whether public markets demand short-term profits at the expense of long-term investment."
UBS bank shares plunge as rich investors withdraw money -AP
"Swiss bank UBS saw its shares slide on Tuesday on news that investors had pulled billions out of its division serving wealthy clients - a token of the market turbulence that has shaken the world in the past few months. The Zurich-based bank, which nevertheless booked higher fourth quarter profits, cited 'very low levels of client activity and pronounced risk aversion' as it reported $3.3 billion had flowed out of its wealth management arm, which handles money from rich people outside the U.S....Markets for everything from stocks to oil have been marked by turmoil over fears that China will not be able to support global growth as before, that emerging markets face troubles with debt and capital outflows and that low oil prices mean weakening demand in the economy."
'Robo-advisers' try to calm investors -Financial Times
"The biggest 'robo-advisers' are relying on old-school call centers and blog posts to calm anxious investors, trying to persuade them that there is no need to abandon the algorithms in times of heightened volatility....Robo-advisers require customers to complete an online questionnaire on their goals and risk appetite. The software then selects a portfolio, often focusing on cheap exchange traded funds, and periodically rebalances to optimize profits and taxes. Most of the worried callers to Schwab’s Intelligent Portfolios service did not do anything with their accounts after hanging up, said Mr McDaniel, noting that less than 1 per cent of about 63,000 accounts changed their risk profile or portfolio composition in the first three weeks of 2016."
Bank of Japan, negative interest rates and the risks of monetary alchemy -AFR
"It is what one analyst has called the 'turning point … in the greatest monetary experiment ever.' The Bank of Japan's negative interest rates have been applauded by global investors....Yet that just shows how addicted financial markets have become to the stimulus of cheap money. So cheap that you have to pay someone to hold it for you. Like most mind-altering addictions, that may provide the temporary appearance of brilliance. But over time, the inevitable distortions it causes will likely be dissolute. The BoJ's sub-zero rates policy follows two-and-a-half decades of attempts to kick-start its economy, mostly through the biggest printing press operation of any of the quantitative easing central banks. Twenty-five 'lost years' later, the arsenal is so exhausted that it has followed the European Central Bank in resorting to a pay-to-save strategy."
Rewardless Risk -Salient Partners
"Negative rates are an intentional effort to weaken your own country's banks. Negative rates are a punitive command: go out there and make more bad loans where risk is entirely uncompensated, or we will, in effect, fine you. The more bad loans you don't make, the bigger the fine....There's a reason that the Fed kept paying interest on bank reserves even in the darkest, most deflationary days of the Great Recession. Yes, it's the Fed's job to support full employment. Yes it's the Fed's job to maintain price stability. But the Fed's job #1 - the reason the Federal Reserve was created in the first place - is to maintain the stability of the banking system....You know what negative rates are? They are the final stripping away of the illusion that central bankers somehow exist above and separately from domestic politics, that they are wise and able stewards of financial stability."
2.1.16 - FED TRAPPED, DOLLAR TREED
Gold last traded at $1,128 an ounce. Silver at $14.34 an ounce.
NEWS SUMMARY: U.S. stocks ended a volatile trading day mixed Monday following a 6% drop in oil prices. Meanwhile, precious metal prices rose over 1% on safe haven buying as the U.S. dollar fell on declining Fed credibility.
Dollar weakens on views of dovish Fed -CNBC
"The U.S. dollar fell against a basket of major currencies on Monday on the view that the Federal Reserve would not be able to hike interest rates as quickly as forecast this year given weak U.S. economic data and continued easing from the Bank of Japan....'The market has come to the realization that the Fed will not be as aggressive in 2016 as it indicated at the end of last year, and that in itself is making people question their long dollar positions,' said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York....Analysts said that the BOJ's move on Friday was another event that could forestall the Fed from hiking rates as quickly as they initially forecast."
Swiss America chairman and author Craig R. Smith warned readers in 2015 of rising dollar risks in 2016. Request his latest Special Report, What's Next For The Dollar?
Hello, Ben? ... Now What? -New York Sun
"We love that cartoon on the front page of the latest Grant’s Interest Rate Observer...It manages to say in four words what the Financial Times takes an entire editorial in this mornings edition to say, which is that the Fed and the central banks don’t seem to know how to get out of the morass into which Ben Bernanke beckoned them with all his forward guidance....'Credibility problems' is what the FT lays to the Federal Reserve. It cites the Fed’s failure to back off the idea that America’s labor market is 'tightening' and that 'inflationary pressures' are building up. It reckons investors 'clearly do not believe' Fed officials when they forecast for this year another four quarter-point rises in interest rates....Grant’s itself suggests it’s time to repeal the Fed’s employment mandate and establish a rule, 'First do no harm.' Almost an entire presidency has passed since the Great Recession began, and growth is now running at 0.7%. Unemployment has been brought down by people ceasing to look for work. The Fed balance sheet is still bloated by trillions."
In RIGHT ON THE MONEY Swiss America chairman Craig R. Smith explains why the Federal Reserve is to blame for today's stagnant US economy, trillions in new debt, a stock market bubble and our unsafe banking system.
Gold Strong Like Bull -Seeking Alpha
"I love gold. I love to hold coins or bars in my hands and feel the weight and the density of the precious metal. I love the history of gold. I love that every ounce ever produced in the history of the world still exists. I love the fact that this store of value has remained deeply ingrained in the psyche of humankind for thousands of years, if not more. I love its shine, its unique luster....So far, in the first weeks of 2016, gold is doing better than it did last year. Gold traded to highs of $1128.70 per ounce last Wednesday, January 27 -- $65 per ounce higher than the December 31, 2015 price....In 2016, we face a battle - gold versus the dollar. Both are likely to be volatile. Since 2014, the greenback, a paper currency, has been winning the most recent battle. However, if gold breaks above the $1200 per ounce level, it will turn the page on a new chapter in an ongoing war."
For our take on why gold's future is so bright in 2016, read The Timeless Truth About Gold & Silver.
Is Congress Declaring War On ISIS... Or On You (& Your Cash)? -Zero Hedge
"Passage of Senator Mitch McConnell’s authorization for war against ISIS will not only lead to perpetual US wars across the globe, it will also endanger our civil and economic liberties....If Senator McConnell’s declaration of perpetual war passes, presidents could use the war on ISIS as a justification to impose new restrictions on our use of cash and our financial privacy via executive action. After all, they will say, the government needs to make sure cash is not being used to support ISIS. The only way to protect both liberty and security is to stop trying to impose our will on other countries by military force. The resentment created by America's militaristic foreign policy is ISIS’ most effective recruiting tool."
To better understand why governments worldwide have declared a "war on cash" read THE SECRET WAR ON CASH.
1.29.16 - GOLD TRIUMPHS!
Gold last traded at $1,116 an ounce. Silver at $14.24 an ounce.
NEWS SUMMARY: U.S. stocks rebounded Friday following news the Bank of Japan lowered rates into negative territory - despite falling U.S. GDP data in Q4. Precious metal prices inched higher, despite the U.S. dollar's 1% surge. For the month, gold prices rose over 5 percent while U.S. stock prices fell between 6-10 percent.
Gold Triumphs: Best Monthly Rally in a Year -Bloomberg
"Gold futures rallied 5 percent in January, the best gain in a year....Turmoil in Chinese financial markets, plunging oil prices and signs of softening U.S. growth left investors reeling in January, boosting demand for traditional safe-haven assets like gold. Rising bets that the Federal Reserve will hold off on further interest-rate increase added to the appeal of bullion....'Interest-rate jitters going forward are what brought gold up,' James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. 'With stock markets crashing all over the world and the U.S. economy growing slowly, nothing is pointing to more rate hikes, and that’s why gold is rallying.'"
Based on witnessing the worst start of a new year in a century for stocks, some experts are calling for a major bear market in equity markets in 2016. It's a great time to take some equity profits off the table and buy some physical gold. Request a free copy of our 2016 newsletter, RIGHT ON THE MONEY.
US economic growth slows to a 0.7% rate in Q4 -CNBC
"U.S. economic growth braked sharply in the fourth quarter as businesses stepped up efforts to reduce an inventory glut and a strong dollar and tepid global demand weighed on exports. Gross domestic product increased at a 0.7 percent annual rate, the Commerce Department said on Friday, also as lower oil prices continued to undermine investment by energy firms and unseasonably mild weather cut into consumer spending on utilities and apparel. The economy grew 2.4 percent in 2015 after a similar expansion in 2014."
A humiliating day awaits the Federal Reserve -NY Post
"So why will the Fed be embarrassed? Because just last month, it raised interest rates despite the fact that it was quite clear that the economy was slowing. In fact, the Atlanta Fed’s GDPNow model back in December wasn’t much higher than it is now....The Fed on Wednesday, following its January meeting, said it would keep interest rates right where they are. That is, no hike or cut....The calls for the Fed to 'do something' will get louder if the stock market continues its abysmal performance - down 8.5 percent this year....A lousy employment report next week will put the Fed in a whole new kind of trouble."
Bank Of Japan's Stunning Desperate Negative Rates -Zero Hedge
"As we noted earlier, in a paradoxical U-turn, one which caught everyone by surprise as a result of Kuroda's own promise just one week ago not to engage in NIRP... and two months after the ECB's December 3 disappointing announcement led to a historic surge in the EUR, today countless macro hedge funds have been left reeling with huge losses once again, as many had recently turned bullish on the Yen... only to be eviscerated by the BOJ's negative rates announcement. So what happened? Reuters has an amusing take, one which we doubt many macro HFs will find quite entertaining: 'Bank of Japan Governor Haruhiko Kuroda used classic shock tactics on Friday to push through his latest unconventional monetary policy of negative rates: deny, then strike.'"
Japan has now joined four other nations in experimenting with negative interest rate policies (NIRP); The European Central Bank, Swiss National Bank, Denmark National Bank and Sweden's Riksbank. It now costs depositors money to keep their own money on deposit in these banks! This appears to be a last-ditch effort by central bankers to prop up their otherwise down-trending stock markets.
WE HAVE SEEN THE FUTURE AND IT LOOKS LIKE BALTIMORE: AMERICAN DREAM VS. PROGRESSIVE DREAM Chapter Nine explains..."When rates fall beyond a certain point," warned the London-based Financial Times in February 2015, "hoarding physical cash becomes rational, as does sinking it into assets like gold or property...."
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