Wednesday, June 10, 2020
Inflation ‘A mirror image of the early 1980s’ / Economics / Inflation
By: Michael_J_Kosares
“To propose a return of inflation is to be inflammatory,” writes Lightman Investment Management’s Rob Burnett in an opinion piece for the Financial Times. “Investors are committed to a deflationary thesis — and such is their fervor that many believe inflation cannot return in any circumstance. Yet if we look beyond today’s demand shock from the Covid-19 crisis, the forces driving the disinflation of the past 40 years appear to be in retreat. … [T]oday appears like a mirror image of the early 1980s. We have moved from inflation peak to deflation trough.”
Evidence is beginning to mount that the new paradigm Burnett describes – moving from disinflation to inflation – might not be too far off the mark. During the financial crisis that began in 2008, the Fed sterilized its money creation by routing money back to its coffers in the form of commercial bank excess reserves – a strategy that kept the inflation rate from running out of control. As you can see in the first chart, the current level of sterilization, at least in the short term, is greater than what occurred in the 2008-2014 period. At the same time, as you can see in the second chart, the rapid growth in the money supply this time around goes beyond anything that occurred during the prior crisis. Whether or not Burnett is correct and the growth in the money supply translates to price inflation down the road remains to be seen. (Please take note that the growth in the money supply began roughly a year ago – well before the onslaught of the coronavirus pandemic.)
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Wednesday, June 10, 2020
Trump's Final Gamble: From Chinagate to Hybrid Wars / Politics / China US Conflict
By: Dan_Steinbock
The disastrous failure of the Trump administration to contain COVID-19 will result in catastrophic 2nd quarter data. As a result, Trump is risking his re-election on domestic unrest, fatal geopolitics and a global depression.
The cold reality is that the Trump administration learned about the virus already on January 3, when CDC Director Dr. Robert R. Redfield informed Secretary of Health Alex Azar that China had discovered a new coronavirus. Yet no mobilization was initiated until toward late March (see my report here):
Indeed, the Trump White House missed three opportunities to contain the virus outbreak; in January (between CDC alert and WHO’s international emergency), the 1st quarter (between the WHO emergency and the pandemic alert) and the 2nd quarter (since social distancing began 6-8 weeks late and inadequately).
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Tuesday, June 09, 2020
Silver vs Gold Trend / Commodities / Gold & Silver 2020
By: Nadeem_Walayat
The silver price has managed to recover from the Corona crash of 2020 with the price back within it's trading range of $17 to $20. Though contrary to the Silver bugs perma expectations for the Silver price to track the Gold price higher, that's not what usually tends to happen as the below graph illustrates,, which if you have followed my previous Silver analysis articles than you would know this is the expected behaviour of Silver, Gold's volatile and unresponsive to events cheaper cousin.
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Tuesday, June 09, 2020
Argentina, the World’s Biggest Deadbeat Economy / Economics / Argentina
By: Steve_H_Hanke
Borrow, spend, default; lather, rinse, repeat.
On May 22, Argentina failed to meet interest payments on its sovereign debt. With that, the country tipped into default on its $65 billion mountain of foreign debt. If that’s not enough, Argentina’s provinces are addicted to debt and are buried in it, too. The province of Buenos Aires is already in default, and Cordoba, La Rioja, Salta, Rio Negro, and Chubut have also indicated that they plan to restructure their debt as well.
This is not the first time that Argentina has stiffed its creditors. No, it’s the ninth time. And it’s not Argentina’s largest default, either. Indeed, Argentina set the world’s default record when it defaulted on $95 billion in external debt in 2001. The bottom line is clear: Argentina is hands down the world’s biggest deadbeat.
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Tuesday, June 09, 2020
Central Banks Have Jumped the Shark, May Even Buy Stocks / Stock-Markets / Stock Markets 2020
By: MoneyMetals
Mike Gleason: It is my privilege now to welcome back Michael Pento president and founder of Pento Portfolio Services. Michael is a well-known money manager, market commentator, and author of the book, The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. He's been a regular guest with us over the years, and it's always a pleasure to have him on with us.
Michael, thanks for the time again today and welcome back.
Michael Pento: Thank you so much for having me back on Mike.
Mike Gleason: Well, Michael, it's been a few months since we've had you on last and just a little bit has been going on in the world. COVID-19 has hit the states to say the least and caused major disruptions in the economy. Governors have instituted stay-home orders. Tens of millions of people have filed for unemployment. Now we're seeing major rioting and social unrest in many cities throughout the country over the police killing of a black man in Minnesota last week.
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Tuesday, June 09, 2020
Investors Confused as Governors Spur Protests While Keeping Others Locked Down / Stock-Markets / Financial Markets 2020
By: MoneyMetals
A violent and chaotic week in America’s cities was met with little apparent concern on Wall Street. For the most part, the stock market continued on its merry way higher.
Precious metals markets, meanwhile, are giving back some of their recent gains.
It’s no surprise that silver encountered some resistance at $19. In fact, on May 26th we had pointed to that very level being the next important target for silver in weekly Money Metals News Alert we send out via email every Monday morning.
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Tuesday, June 09, 2020
US Red Shirts and the Boogaloo / Politics / US Politics
By: Richard_Mills
The race riots seen around the United States over the past few days are troubling for sure, but they are nothing new.
If there is one thing uniting the 50 American states of the union, historically, it is divisions over race, primarily Caucasian versus African American. It is disturbing to note that 157 years after the Emancipation Proclamation of 1863, and many decades after the race riots of the 1960s ushered in an era of equal opportunity and affirmative action, the United States is still struggling with questions of justice and inequality pertaining to its large black population.
Yet there is a marked difference between what is happening now compared to 100 years ago. During the period leading up to the 1920s, it was usually white people who instigated and participated in race riots. The purpose of these violent demonstrations was to assert white dominion rather than to express black anger and frustration.
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Monday, June 08, 2020
Gold Stocks Healthy Upleg / Commodities / Gold and Silver Stocks 2020
By: Zeal_LLC
The gold miners’ stocks just rolled over into a correction, raising concerns about the staying power of their massive post-panic upleg. These higher prevailing gold prices have driven very-strong fundamentals at the gold miners. But they are entering the seasonally-weak summer doldrums. And current sentiment and technicals play major roles in governing when uplegs remain healthy or ready to give up their ghosts.
The GDX VanEck Vectors Gold Miners ETF remains the leading and dominant benchmark for this small contrarian sector. Its $14.3b in net assets this week were a colossal 33.2x bigger than those of its next-largest 1x-long major-gold-miners-ETF competitor! GDX’s only real rival is its little-brother GDXJ mid-tier gold-miners ETF, which is only about one-third of GDX’s size. The GDX gold stocks have sure had a wild ride.
Normally the major gold miners of GDX leverage material gold moves by 2x to 3x. Gold stocks’ excess gains during gold uplegs are necessary to compensate traders for miners’ big additional risks on top of gold-price fluctuations. These include operational risks at individual mines, geopolitical risks in countries hosting gold mines, financial risks from hedging and currency fluctuations, along with many other risks.
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Monday, June 08, 2020
This Is the End of College as We Know It / Companies / Education
By: John_Mauldin
May was supposed to be a time of celebration. Normally, it’s when students across the country graduate from college and prepare to enter the “real world.”
This year was different. Coronavirus has shut down most colleges and universities. Last month, it was reported that 9 out of every 10 students in the world stopped going to school. That’s about 1.5 billion kids!
It’s anyone’s guess when colleges will reopen. But one thing’s for sure: the US university system will never return to its old glory.
Unlike airlines, hotels, and cruise ships, many colleges will NOT bounce back after coronavirus fades away. While they might not admit it, many colleges have already shut their doors for good because their business model never made sense in the first place.
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Monday, June 08, 2020
Will Great Unlock Push Gold Prices Down? / Commodities / Gold & Silver 2020
By: Arkadiusz_Sieron
As Great Lockdown was positive for the gold prices, the Great Unlock will be bad, right? We invite you to read our today’s article about the Great Unlock and find out whether it really must be negative for the gold prices.
It’s all government’s fault, right? After all, the Great Lockdown was introduced by the federal and state governments introduced, wasn’t? Well, not quite.
Before I will explain why, let me clear one thing up: I’m a liberty lover and I’m skeptical about the government regulations. And the economic shutdown was obviously untenable – the only reason to shut down the economy was to buy some time to prepare the healthcare system for better handling of the epidemic. So, it’s good that the Great Lockdown is ending.
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Monday, June 08, 2020
Silver/Gold Ratio Hits Target; About Those Inflation Indicators / Commodities / Gold & Silver 2020
By: Gary_Tanashian
The NFTRH plan is and has been that the gold mining sector, due to the fundamentals implied by the handy graphic below, could eventually lead a world full of inflatables higher. The miners, leveraging gold’s out performance to most everything else during liquidity crises and even deflation, move first and draw in the inflationist bugs later. If the macro goes inflationary the miners will likely continue to perform well (ref. the 2003-2008 period) but would no longer be the go-to sector.
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Monday, June 08, 2020
LOCKDOWN 2020: Everybody Was Kung Flu Fighting / Politics / Pandemic
By: Jeff_Berwick
Suddenly, we’re not "in this together" anymore.
Suddenly, it’s "every man for himself".
Especially when it comes to deliberately destroying old ladies’ shops in the name of Anarchy!
Larken Rose, that "angry white guy with a gun", says it best:
"One common misconception about anarchy is that it means "every man for himself" or "survival of the fittest," where everyone has to be selfish and self-sufficient, where there is no real cooperation or organization, and where people all behave like violent, selfish animals."
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Monday, June 08, 2020
Think Coronavirus Caused the Stock Market Crash? These Two Charts Beg to Differ / Stock-Markets / Stock Markets 2020
By: EWI
Just about everyone thinks the coronavirus pandemic slammed global stock prices in February and March. Entire countries shut down; businesses closed up shop; unemployment soared. People stopped spending money beyond the essentials, so conventional wisdom would indeed expect stocks to slide as a result. Yet consider the below chart of the Shanghai Composite, China's primary stock index.
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Monday, June 08, 2020
Russia: How Financial "Complacency" Morphed into "Crisis" / Stock-Markets / Russia
By: EWI
It's been a tough year for Russia financially.
Of course, there's been the big collapse in oil prices, plus -- just like many other global stock indexes -- Russian stocks are well off their highs.
That's quite in contrast to 2019, when the RTSI index, a U.S. dollar-based index of 50 Russian companies, climbed 29%.
Shortly after registering that performance, Elliott Wave International's January Global Market Perspective, a monthly publication which covers 40-plus worldwide markets, showed this chart and said:
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Monday, June 08, 2020
The Effects of the Economic Shutdown on the UK Gambling Industry / Companies / Gambling
By: Submissions
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Sunday, June 07, 2020
Gold, Stocks & The Pandemic: A Powerful Contracyclical Play In Action / Commodities / Gold & Silver 2020
By: Dan_Amerman
While the use of gold to protect against inflation is well known, it has other investment attributes that are potentially even more valuable, and this is particularly true in times of crisis.
In this analysis, we will examine the relative performance of gold and stocks (as represented by the S&P 500) between early February and late May, as the coronavirus pandemic and the resulting economic shutdowns transformed global economies and markets.
The short term relationship that we will find is an almost perfect match with what fifty years of financial history shows us is perhaps gold's most valuable investment attribute over the long term, which is its contracyclical relationship with stock prices.
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Sunday, June 07, 2020
A Huge Silver Rally Is The Next Step In The US Dollar Long-Term Cycle / Commodities / Gold & Silver 2020
By: Hubert_Moolman
The US Dollar Index is getting close to the breakdown that will signal a massive Silver rally. A type of Silver rally that was last seen in the 70s, when Silver went from around $5 to $50.
The market has virtually completed a full cycle to set up the next Silver rally. See this long-term US Dollar Index chart:
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Sunday, June 07, 2020
Gold & Silver “Washout” – Get Ready For A Big Move Higher / Commodities / Gold & Silver 2020
By: Chris_Vermeulen
Gold and Silver moved lower early on June 2nd and 3rd. Our research team believes this is a “Washout Low” price rotation following a technical pattern that will prompt a much higher rally in precious metals. This type of washout price rotation is fairly common before very big moves after Pennant/Flag formations or just after reaching major price trigger levels.
With Gold, a sideways Pennant/Flag formation has been setting up near our GREEN Fibonacci Price Amplitude Resistance Arc. We believe the downward price rotation recently is a perfect setup for skilled technical traders to take advantage of lower entry price levels. The GREEN Fibonacci Price Amplitude Arc will very likely be breached over the next 5 to 10 trading days and the price of Gold should rally well above $1850 in the process. We believe this Washout Rotation is a process of running through the Long Stops just below recent price activity that will end with a defined upside price rally over the next 2 to 5+ weeks.
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Sunday, June 07, 2020
When People Riot, Should We Call Military or Gold? / Commodities / Gold & Silver 2020
By: Arkadiusz_Sieron
Could 2020 end, please? The pandemic is not over and the US suffers now from mass riots across the country. They could aggravate the coronavirus crisis and increase the demand for gold.On May 26, a black man, George Floyd, was killed by the police in Minneapolis, Minnesota. During his arrest – he allegedly used earlier a $20 counterfeit bill in a nearby store – the police officer put a knee on Floyd’s neck on the ground, although the arrestee was not aggressive and repeated several times that he could not breathe.
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Sunday, June 07, 2020
Precious Metals Complex Big Picture / Commodities / Gold & Silver 2020
By: Rambus_Chartology
From the March 23rd low in the PM complex we’ve enjoyed the first easy part of this rally that should have many years to run yet. Every bull market will consist of an impulse move followed by a consolidation period, rinse and repeat until the bull market ends with some type of reversal pattern. Normally in a secular bull market the turning points will generally be very large to buildup the energy to advance to new highs.
The current 2nd leg up in the secular PM complex bull market actually began in January of 2016 after the first leg up ran from 2000 to 2011. There was a cyclical bear market within the secular bull market that ran from the 2011 high to the January 2016 low. It’s important to understand which part of a bull market one is in as to not get confused on what may lay ahead.
Tonight I would like to show you some long term quarterly line charts that I use when looking for big chart patterns that usually show up at important long term reversal points that can take years to complete. I usually only post these charts just a couple of times a year as change comes very slowly but when change does come it’s important to pay close attention because the change usually represents a major trend change.
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