Radio Show Newsletter
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: Just Five Stocks Account for Nearly 75% of the Nasdaq’s Plunge. When it comes to the ongoing technology beat-down in the stock market, it appears not all shares are created equal. Indeed, just five names account for nearly 75 percent of the drop in the Nasdaq Composite Index, which has fallen more than 2.1 percent since June 7. Meanwhile, the Dow Jones Industrial Average and S&P 500 Index are roughly unchanged over the same time frame. Much of this dynamic is due to giants like Apple Inc., Microsoft Corp. and Goggle parent Alphabet Inc. falling as much as 6.5 percent. Those companies account for nearly 30 percent of the index’s weighting, and their outsize impact has driven the gauge lower even though the bulk of the stocks are doing fine. Read more here-https://bloom.bg/2rYDGMr
-CHART OF THE WEEK: A Record Number of Investors Say Stocks Are Overvalued. U.S. stocks are the most overvalued investment in the world. At least that’s what institutional investors say. A record 44 percent of fund managers polled in a monthly survey from Bank of America Merrill Lynch see equities as overvalued, up from 37 percent last month. The technology-heavy Nasdaq Composite Index was named the most crowded trade, with 57 percent of investors saying Internet stocks are expensive and 18 percent calling them “bubble-like.’’ Still, analysts caution that these results don’t spell the end of the bull market. Read more here-https://bloom.bg/2s1H2OU and http://read.bi/2spLKq0
-CHART OF THE WEEK: This Year’s Best Commodity Is One of the Smallest Metals Markets. In the main commodity markets, nothing is doing better than palladium this year. The metal is up 30 percent, beating 33 other raw materials, including lean hogs and aluminum, tracked by Bloomberg. On Friday, prices surged as much as 7.9 percent to a 16-year high of $928.36 an ounce as some traders were said to scramble to get hold of physical supplies. Palladium, which is mainly used to curb harmful emissions from gasoline vehicles, has rallied on expectations that supply will lag demand for a sixth straight year.
It’s now almost as expensive as platinum for the first time since 2001, helped by Volkswagen AG’s emissions scandal two years ago that has prompted consumers to switch from diesel to gasoline cars. “The fundamentals in palladium are among the best in all the commodities,” said Rene Hochreiter, an analyst at Noah Capital Markets Pty Ltd. in Johannesburg. “It could easily overtake platinum in the near-term. It feels as if the rally has got legs.” Read more here-https://bloom.bg/2rYm3w8
-CHART OF THE WEEK: The Global Economy Is Rebounding, But There’s One Big Problem. There’s a dark cloud building behind the world’s best period of synchronous growth among developed and emerging economies this decade one that in time could rain down volatility in global markets. The problem, identified by strategist and hedge fund manager Stephen Jen, is a deepening imbalance in the lack of new safe-haven assets as the world’s output expands. China and other developing nations are accumulating wealth, but failing to create sophisticated local markets that feature their own risk-free instruments. That’s left a dangerous reliance on U.S. Treasuries, according to Jen’s argument, perpetuating a bond bubble and pushing investors into riskier assets. Read more here-https://bloom.bg/2rvF8Ck
-The children’s clothing retailer Gymboree filed for Chapter 11 bankruptcy protection late Sunday. The mall-based chain says it plans to remain in business during its restructuring but will close 375 to 450 of its 1,281 locations. The company employs more than 11,000 workers. Gymboree says the restructuring will reduce its debt by more than $900 million and position the company for “long-term success.” Businessinsider
-The U.S. government has “backup plans” for funding itself if Congress doesn’t raise the debt limit before lawmakers leave for their August recess as hoped, Treasury Secretary Steven Mnuchin said. “I don’t want to leave any doubt, we have plans, backup plans for funding the government,” Mnuchin told reporters Friday at a press conference in Ottawa with Canadian Finance Minister Bill Morneau. “We will be fine if they don’t do it beforehand, but I want to emphasize that the sooner they do it, the less uncertainty there is in the market,” he said. While the government hit its borrowing limit in March, it’s been relying on special accounting maneuvers to keep spending under the current ceiling of nearly $20 trillion. Increasing the debt limit a responsibility of Congress has become increasingly fraught in recent years as lawmakers used the debate as a bargaining chip for spending controls. Bloomberg
-The European Union is pushing ahead with a politically charged plan to assert control over the clearing of euro-denominated derivatives, in a step that could force firms to move from London to the European Union after Brexit. Meanwhile, the European Central Bank is unlikely to include Greek bonds in its asset-purchase program for the foreseeable future, a person familiar with the matter said, as euro-area finance ministers meet in Luxembourg later this week to discuss the debt-relief measures that the ECB has said are needed before it will consider purchasing Greek bonds. Bloomberg
-DoubleLine Capital’s Jeffrey Gundlach said the establishment in Washington is trying to undermine President Donald Trump by running out the clock on his administration. “They’re really just trying to wait Trump out, trying to obstruct his agenda as much as possible,” Gundlach, one of the few money managers to predict Trump’s election, said during a webcast Tuesday. “Small change is what they’re looking for.” Gundlach, manager of the $53.9 billion DoubleLine Total Return Bond Fund, spoke during televised Senate testimony by Attorney General Jeff Sessions, which the money manager called “a sideshow or entertainment.” He called the U.S. political conflict “rope-a-dope,” a strategy used by boxer Muhammad Ali to wear out opponents. Bloomberg
-A new Equifax survey shows 78 per cent of Canadians who don’t already own a home say they want to buy one, while the majority of non-homeowners (51 per cent) don’t think they’ll be able to afford one. BNN
-Fed Raises Rates, Maintains Forecast for One More Hike. Federal Reserve officials forged ahead with an interest-rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation. Policy makers agreed to raise their benchmark lending rate for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5 trillion balance sheet this year. “Near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely,” the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington.
“The committee currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated.” Policy makers also issued forecasts showing another three quarter-point rate increases in 2018, similar to the previous projections in March. The Fed’s actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year. “Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the committee’s 2 percent objective over the medium term,” the statement said. Read more here-https://bloom.bg/2sbkmtZ
Blodget: One of the things I’ve always admired about you as an investor is that you don’t talk about what should be. You figure out what is going to be and then you do that. So what is going to be with respect to the stock market? What’s going to happen?
Rogers: I learned very early in my investing careers: I better not invest in what I want. I better invest in what’s happening in the world. Otherwise I’ll be broke dead broke. Well, what’s going to happen is it’s going to continue. Some stocks in America are turning into a bubble. The bubble’s gonna come. Then it’s going to collapse, and you should be very worried. But, Henry, this is good for you. Because someone has to report it. So you have job security. You’re a lucky soul.
Blodget: Well, yeah, TV ratings do seem to go up during crashes, but then they completely disappear when everyone is obliterated, so no one is hoping for that. So when is this going to happen?
Rogers: Later this year or next.
Blodget: Later this year or next?
Rogers: Yeah, yeah, yeah. Write it down.
Blodget: And what will trigger it?
Rogers: Well, it’s interesting because these things always start where we’re not looking. In 2007, Iceland went broke. People said, ‘Iceland? Is that a country? They have a market?’ And then Ireland went broke. And then Bear Stearns went broke. And Lehman Brothers went broke. They spiral like that. Always happens where we’re not looking.
I don’t know. It could be an American pension plan that goes broke, and many of them are broke, as you know. It could be some country we’re not watching. It could be all sorts of things. It could be war unlikely to be war, but it’s going to be something. When you’re watching Business Insider and you see, “That’s so interesting. I didn’t know that company could go broke.” It goes broke. Send me an email, and then I’ll start watching.
Blodget: And how big a crash could we be looking at?
Rogers: It’s going to be the worst in your lifetime.
Blodget: I’ve had some pretty big ones in my lifetime.
Rogers: It’s going to be the biggest in my lifetime, and I’m older than you. No, it’s going to be serious stuff.
We’ve had financial problems in America let’s use America every four to seven years, since the beginning of the republic. Well, it’s been over eight since the last one.
This is the longest or second-longest in recorded history, so it’s coming. And the next time it comes you know, in 2008, we had a problem because of debt. Henry, the debt now, that debt is nothing compared to what’s happening now.
In 2008, the Chinese had a lot of money saved for a rainy day. It started raining. They started spending the money. Now even the Chinese have debt, and the debt is much higher. The federal reserves, the central bank in America, the balance sheet is up over five times since 2008.
It’s going to be the worst in your lifetime my lifetime too. Be worried.
Blodget: I am worried.
-Bill Gross Warns All Financial Markets ‘Increasingly at Risk.’ Investors should be wary as low interest rates, aging populations and global warming inhibit real economic growth and intensify headwinds facing financial markets, according to Bill Gross. “Don’t be mesmerized by the blue skies,” Gross, manager of the Janus Henderson Global Unconstrained Bond Fund, wrote in an investment outlook released Tuesday. “All markets are increasingly at risk.” Read more here-https://bloom.bg/2spROPC
-The very dark warning from billionaire investor Ray Dalio. Famed hedge-fund billionaire Ray Dalio fears the world today looks an awful lot like it did before World War II. Dalio’s words are closely watched because he founded the world’s largest hedge fund: Bridgewater Associates, with $160 billion in assets. Dalio’s peculiar management style of “radical transparency” has led some to also call Bridgewater the world’s strangest hedge fund. Like many Americans, Dalio seems preoccupied these days with the political situation in the U.S. He published an ominous LinkedIn post on Friday warning investors that for the first time since just before World War II there is “great economic, social and political polarity” that has given rise to populist leaders. Read more here-http://cnnmon.ie/2s23xDb
-Former CEO: Sears Canada may not make it through the year. A former chief executive officer of Sears Canada (SCC.TO) says he would be shocked if the struggling retailer makes it through the end of the year. In an interview on BNN, Mark Cohen, who helmed the company from 2001 to 2004, said it’s hard to imagine a scenario where the company survives as an independent entity after it cast doubt on its ability to continue as a going concern. “This is a company that clearly doesn’t have a way forward; so, absent someone with a boatload of cash propping them up, they might very well not make it through the end of this year,” he said. “You can’t run a business without cash flow, and they don’t have any.”
Cohen said barring a significant sale of a chunk of the company’s remaining assets, he thinks the company will be forced to file for bankruptcy protection. “Absent some kind of an undisclosed asset sale or series of asset sales that we don’t know anything about, the likelihood is pretty good that they’ll have to file,” he said. “When all is said and done, they don’t have any money, they don’t have any cash, they don’t have any volume, they don’t have any forward momentum.” Cohen said the situation could be exacerbated if the company’s vendors halt shipments to Sears Canada over concerns they won’t be paid in the event of a bankruptcy. Read more here-http://bit.ly/2tk8THD and http://bit.ly/2rppFc3 and http://bit.ly/2tkp1ZL
-These Cities Have Too Many Stores, and They’re Still Building. Cleveland, Memphis, and Chicago lead the way among metro areas where retail development has outpaced growth in demand. What were they thinking in Cleveland? Real estate developers built more than 21 million square feet of new store space in the Northeast Ohio metropolitan area from 2000 through the first three months of this year, increasing its retail footprint by 21 percent. But while the new stores were moving in, the shoppers were moving out. The metro area’s population declined by more than 90,000 over a similar period, and it became a stomping ground for students of the dying American mall.
Across the U.S., retail real estate development that outpaced demand marked the early years of the new millennium. Now retailers are going bankrupt at a record rate, and hedge funds are betting against the commercial mortgages used to finance mall properties. Credit Suisse this month predicted that as many as 275 malls, a quarter of the U.S. total, will close in the next five years. The woes of brick-and-mortar retail come partly from the rise of e-commerce, which has grown to about 8 percent of retail sales, from less than 1 percent in 2000. But they are also self-inflicted, according to Suzanne Mulvee, director of research at CoStar Group Inc. The industry built new stores faster than the consumer could spend at them. Read more here-https://bloom.bg/2smzUx6
-Canadian home prices could fall 20-40% over next five years, warns Capital Economics. The hot housing markets in Vancouver and Toronto appear to be on the verge of a severe downturn that could hit Canadian economic growth, says Senior Canadian Economist at Capital Economics David Madani. “I see a correction of between 20 to 40 per cent in the Canadian housing market over five years,” Madani told BNN in an interview Monday. Madani says the current hot housing markets in Vancouver and Toronto are in a speculation-fueled bubble that appears to be on the verge of bursting.
And once home prices take a breather, the housing markets will begin a severe correction, he says. “In a speculative housing bubble, once prices stop going up the whole reason for speculating in the market disappears,” Madani said. Vancouver home sales in May fell 8.5 per cent from a record peak a year earlier, but surged 22.8 per cent from April and were 23.7 per cent above the 10-year sales average for the month, according to data from the Greater Vancouver Real Estate Board. But that uptick was largely driven by low mortgage rates and is unsustainable, said Madani. Read more here-http://bit.ly/2s8JSQj
-Realtor sees ‘troubling’ downturn in Toronto housing as sales drop 44%. New data suggests the rapid decline in Toronto home sales is accelerating, and at least one housing bear sees a Canadian real estate correction of up to 40 per cent coming. The country’s largest housing market took an abrupt turn from record highs on the heels of Ontario’s 16 measures to cool housing, with sales falling 20 per cent and new listings soaring almost 50 per cent across the Greater Toronto Area in May. John Pasalis, president and broker at Realosophy, has crunched the early numbers for June and sees a “troubling” plunge in transactions.
“People are just pulling back, it was a really wild swing,” Pasalis told BNN in an interview Monday. “Who knows where it’s going to go. A lot of this is driven by market psychology.” Realosophy’s research suggests sales of freehold homes across the Greater Toronto Area are down some 39 per cent so far in June. And for the week ended June 9, sales volumes plummeted 44 per cent compared to the same period in 2016. When it comes to new listings of freeholds, they rose 34 per cent last week, according to Realosophy. Pasalis notes the growth rate in new listings has actually been on the decline for the past four weeks, but added in an email that he considers the rapid decline in sales “more troubling than the rise in inventory.” Read more here-http://bit.ly/2sqE3AQ
-Stephen Poloz’s comments help send loonie higher. Loonie up more 1.3 cents against U.S. dollar since Monday. The Canadian dollar continued gaining ground against the U.S. dollar Tuesday on comments by the head of the Bank of Canada that the economy is revving up. The loonie gained 0.50 of a cent to hit 75.55 cents US. In an interview Tuesday Bank of Canada governor Stephen Poloz said the economy is picking up.
“It isn’t time to throw a party, but it does suggest that the interest rate cuts we did two years ago have done their job, and that’s important to us,” Poloz said. The bank cut rates back in 2015 as the economy grappled with the effects of tumbling oil prices. “Everyone knows, I think, that interest rates have been extraordinarily low to offset some of the shocks that have been hitting our economy, beginning with the global financial crisis but then again the oil collapse we saw 2½ years ago,” Poloz said. “What it looks like now is the economy is gathering momentum,” he said.
The loonie has gained about 1.3 cents over the past two days, buoyed by comments by Bank of Canada officials, including Poloz and senior deputy governor Carolyn Wilkins, about the state of the economy. “It’s one of of the biggest moves we’ve seen over the past year,” in the loonie, Mark McCormick, North American head of foreign exchange strategy at TD Securities, told Reuters. Markets are taking the bank’s positive tone to mean that interest rate hikes could come sooner than had been expected, which was early 2018. The Bank of Canada is slated to announce its next decision on interest rates on July 12. Read more here-http://bit.ly/2soDuXu
-More room for loonie to fall, RBC warns. The Royal Bank of Canada expects the loonie to fall to US$0.714 from about US$0.74 by the end of the year as the Bank of Canada’s interest rate continues to lag behind that of the U.S. Federal Reserve. The Fed will most likely raise its interest rate 0.25 per cent this month and again in the fourth quarter to reflect a strengthening U.S. economy after years of monetary stimulus, said RBC senior economist Nathan Janzen.
Meanwhile, RBC expects the Bank of Canada to keep its rate frozen at an abnormally-low 0.5 per cent for the rest of 2017, despite hawkish indications from the Bank’s senior deputy governor Carolyn Wilkins. Though the central bank has acknowledged the Canadian economy “is doing better, (it) is also looking at wages and the inflation rate and seeing them both generally underperforming,” RBC deputy chief economist Dawn Desjardins said. “With NAFTA renegotiations and changes to the American corporate tax rate, that may present challenges to Canadian companies.”
She concluded from this the Bank is “not in the place to move the rate but, as we head into 2018 (should growth continue and trade stabilize), they will remove some of that stimulus that won’t be needed anymore.” RBC expects the rate to freeze until 2018, when it will gradually rise to 1.25 per cent by end of year. Though RBC says it expects oil prices to rise, the increase won’t be fast enough to stop the loonie’s depreciation. Higher rates in the United States increase the demand for U.S. dollars relative to Canadian dollars. Read more here-http://bit.ly/2stjy6E
-When OPEC Met to Extend Cuts, Output Rose Most in Six Months. As OPEC and its partners last month agreed on prolonging production cuts, the group’s output was climbing the most since November as members exempt from the deal restored lost supply. Production jumped by 336,100 barrels a day in May as Libya and Nigeria revived output halted by attacks and political crises, a report from the Organization of Petroleum Exporting Countries showed on Tuesday. The two nations were excluded from curbs that were extended on May 25 because of earlier disruptions to their oil industries. Still, OPEC predicts that surplus oil inventories will continue to decline in the second half of the year as their cuts take effect and demand picks up.
The group reduced forecasts for supplies from partners such as Russia, Kazakhstan and Sudan as they implement their pledges to restrain output. “The re-balancing of the market is underway,” according to the report by OPEC’s Vienna-based secretariat. “The decline seen in the overhang” in developed-nation stockpiles “is expected to continue in the second half, supported by production adjustments by OPEC and participating non-OPEC producers.” Oil prices have slipped almost 14 percent this year as initial hopes that OPEC would succeed in clearing a three-year surplus gave way to concern that the output cuts aren’t deep enough, and that U.S. shale drillers are filling in any shortfall. Read more here-https://bloom.bg/2sths6A
-The Lonely Drifting Oil Tanker That Signals OPEC’s Struggle. If a single ship can capture the current state of the global oil market, it’s the supertanker Saiq, floating idly about 850 kilometers (530 miles) south of the Canary Islands. Until a few days ago, the 330-meter-long tanker, chartered by Royal Dutch Shell Plc, was steaming at 13 knots toward the Chinese port of Tianjin after loading a 2-million-barrel cargo of North Sea oil at the Hound Point terminal near Edinburgh. Then, it suddenly stopped in the middle of the Atlantic Ocean, according to ship-tracking data compiled by Bloomberg.
Its problem: China isn’t buying much crude right now, leaving the tanker searching for a customer. While the vessel was floating near Africa last week, Shell offered to sell the cargo in a ship-to-ship transfer all the way back in Scotland. There weren’t any takers. Across the world, the plight of the Saiq, now idling off the coast of Mauritania, reflects a broader trend in the physical oil market. After six months of oil-production cuts from the Organization of Petroleum Exporting Countries and 11 non-OPEC nations led by Russia, crude supply is surprisingly still plentiful, according to traders. Read more here-https://bloom.bg/2stlLix
-Russia has developed a cyberweapon that can disrupt power grids, according to new research. Hackers allied with the Russian government have devised a cyberweapon that has the potential to be the most disruptive yet against electric systems that Americans depend on for daily life, according to U.S. researchers. The malware, which researchers have dubbed CrashOverride, is known to have disrupted only one energy system in Ukraine in December. In that incident, the hackers briefly shut down one-fifth of the electric power generated in Kiev.
But with modifications, it could be deployed against U.S. electric transmission and distribution systems to devastating effect, said Sergio Caltagirone, director of threat intelligence for Dragos, a cybersecurity firm that studied the malware and issued a report Monday. And Russian government hackers have shown their interest in targeting U.S. energy and other utility systems, researchers said. “It’s the culmination of over a decade of theory and attack scenarios,” Caltagirone warned. “It’s a game changer.” Read more here-http://wapo.st/2rtoT99
-Steven Cohen Buys $165 Million Lichtenstein ‘Masterpiece,’ NYT Reports. Billionaire investor and art collector Steven Cohen paid $165 million for the 1962 Roy Lichtenstein painting “Masterpiece” earlier this year, making it one of the most expensive pieces on record, the New York Times reported. The comic-inspired Pop art work was sold in January by collector and patron Agnes Gund to raise money for the new Art for Justice Fund devoted to criminal justice reform, the Times said on Sunday. It was sold through the Acquavella Galleries in New York and the price included fees, according to the newspaper. Read more here-https://bloom.bg/2s8o1sr
-The Cost of Lunch With Warren Buffett: $2.68 Million. A bidder pledged $2.68 million to a San Francisco charity in exchange for a lunch date with billionaire investor Warren Buffett. The winner of the online auction that concluded Friday on eBay Inc.’s website chose to remain anonymous. The final price fell short of last year’s $3.46 million winning pledge, which tied the previous record. As in years past, the winner gets to bring seven friends to dine with Buffett, 86, at New York’s Smith & Wollensky steakhouse. Proceeds benefit Glide, a San Francisco charity that serves meals to the homeless, hosts support groups through its women’s center for abuse victims and provides treatment for drug addiction. Read more here-https://bloom.bg/2seFwdz
-“Pink diamond prices have tripled over the past 15 years and on average would be at least 25 to 30 times the value of white diamonds.” David Fardon CEO of Linneys
-In 1817, R.J. Hauy an eminent French mineralogist wrote “Gems are the flowers of the mineral kingdom fancy color diamonds are the orchids.” “Fancy color diamonds, like orchids, are truly exotic and rare beauties of nature.” Rarecoloreddiamonds.com
-“I have come to the realization that colored diamonds, or other gemstones, should first be considered as a unique and individual work of art, and second as a commodity to be analyzed, computerized, and categorized.” Stephen Hofer, 1998
-“Exceptionally fine colored diamonds have no fixed price, and as with fine paintings set rules do not hold” S.H. Ball
-“Diamonds are nature’s art, nature’s most beautiful art. Every stone is a story, every stone tells a story.” Diamond DVD-PBS Nature Series
-“A colored diamond is a touch stone of the universe, a little something God created that man can’t always find, they are the last frontier of collectibles.” R. Winston
-“I remember that stone it was an incredible color, it had its own personality I have never seen another one quite like it.” R. Winston
-“After all, it really is an investment. It is only when the thing I buy creates a show for those around me that I get my money’s worth.” Evalyn Walsh McLean “Queen of Diamonds” Early owner of the Hope diamond
-Two Huge Diamonds Unearthed in Lesotho Mine. Gem Diamonds Ltd. discovered two diamonds bigger than 100 carats at its Lesotho mine in southern Africa, bringing the struggling miner a step closer to ending a drought of large stones. Gem unearthed a 104.73 carat D color Type IIa diamond and a 151.52 carat Type I yellow diamond at its Letseng mine, the company said in a statement Monday. Type IIa diamonds contain very little or no nitrogen atoms and are the most expensive stones. Until now Gem had reported just one large discovery this year, after unearthing a 114-carat diamond in April. Letseng is renowned for the size and quality of its stones, with an average sales price of almost $2,000 a carat, the highest in the industry.
Yet the company has suffered recently from a lack of big finds and discovered just five stones bigger than 100 carats last year, fewer than half as many as it found in 2015. Gem, which fell to a record low in April, has also been hurt by weakening prices for lower-quality stones produced at its Ghaghoo mine in Botswana. In February, the company said it was shutting the newly built operation because prices had fallen by one-third since 2015. While the latest finds will offer some reassurance to investors, they’re not even close to the biggest found at Letseng. In 2015, Gem sold a 357-carat stone for $19.3 million and in 2006 found the 603-carat Lesotho Promise. Read more here-https://bloom.bg/2smjFA8
-Greg Hunter: Jim Rickards Interview, Money Riots Coming in Next Financial Collapse. Financial expert and four time, best-selling book author James Rickards says there is no avoiding another economic collapse. Every time the economy suffers a setback, such as recently hitting a $20 trillion debt ceiling in the United States Congress, things get a little worse. Rickards explains, “The point of my books, ‘The Death of Money’ and my more recent book ‘The Road to Ruin,’ is that these are like snowflakes building up to cause an avalanche. The avalanche is the instability of the financial system as a whole. The concentrations of assets among the banks, the interconnectedness of the system, and almost a $1 quadrillion, not $1 trillion, $1 quadrillion, that’s a $1,000 trillion of notional value of derivatives, all these things are unstable.
What does it take to cause that avalanche? What does it take to cause a loss of confidence in the system? These are major body blows. When you say, the government will shut down or you say the government can’t borrow, the Congress is really playing with fire here. We are going through some very dangerous periods. I am not saying the system is going to collapse in the next 30 days. I am saying the system is very vulnerable to collapse, and it will collapse sooner than later. These are the kind of things that can cause it. We are really playing with fire here.” With all the financial and political chaos on the horizon, Rickards strongly suggests “people have at least 10% of your financial wealth in physical gold and silver.” Read and watch more here-http://bit.ly/2oeZlhU and http://bit.ly/2p7dE5s
-Greg Hunter: Mike Maloney Interview, Insane Bond, Stock and Real Estate Markets. Financial expert Mike Maloney says what is going on in the economy is like a mass mental illness, especially when you consider the geopolitical risks and extreme valuations across the board. Maloney explains, “We have a stock market and real estate market and a bond market that are all insane. We’ve got this crazy world where everything is at these valuations that are just impossible things. That will cause a peak, and we are at a point where we are way overdue for a recession.
Recessions occur every four and a half years on average. Just two months ago, this became the third longest expansion in U.S. history. In 11 months, it becomes the second longest in history. So, the chances of going into another recession sometime soon are very, very high. The chances are on the order of 90% or higher right now for another recession. When you couple this insane overvaluation of the stock markets, real estate is back in bubbles in most major cities and this has been the perfect bull market for bonds, and at some time interest rates have to rise. We are at the point now where we are going to hit big ruts and bumps in the economy, and the Fed has just taken the training wheels off of the bicycle.
This is the worst recovery in history.” Maloney, who is an expert on gold and silver investing, says, “With all this geopolitical risk from North Korea, and we just dropped the ‘Mother of All Bombs’ (MOAB) in Afghanistan, which was most likely a threat to North Korea, we are at a very dangerous point in our history. Since Kennedy. I can’t remember a time that was this dangerous.” On gold, Maloney points at what large foreign countries are buying and says, “Between Russia, China and India, their purchases meet or exceed all worldwide production of gold. Whenever they exceed mining supply, the supply has to come from somewhere, and it’s coming from the West. When the dust settles, the East is going to be very wealthy, and the West is going to be poor.”
In closing, Maloney says that all the money printing and manipulation only pushed off the real crash into the future. Maloney explains, “These things bought us some time, but they made the eventual crash much, much worse. What we are going to see is that 2008 is going to be a speed bump on the way to the main event. 2000 was a stock market crash. 2007 was a real estate and stock market crash. This crash is going to be stocks, real estate and bonds. Bonds have been in a 32 year bull market, and no bull market goes forever. It’s just impossible.” Watch and read more here-http://bit.ly/2pMzFtK
-Greg Hunter: David Stockman Interview, Fiscal Bloodbath Coming this Fall. So, what should you do right now? Stockman says, “The main thing is get out of the markets. These markets are unstable. They’re rigged, and there is no reason to own stock at this point of the game. It is so overvalued. Maybe you can get another two or three percent up, but you are facing another 30% or 40% down. The risk/reward is horrible. The bond market is one giant bubble because the central banks have been buying all these bonds worldwide. They’ve been buying trillions of dollars’ worth, and they are still buying a trillion dollars’ worth on an annual basis. All that is coming to a halt. The Fed has finally run out of dry powder.
They are out of the bond buying business. They are even talking about the initiation of the shrinkage of their balance sheet. That clearly needs to happen. The central banks are finally getting to the end of the road. There isn’t going to be any more money printing, and that is going to leave a giant mess on the doorstep of all the fiscal authorities. It’s going to make the bond market a particularly dangerous place. There is a $100 trillion global bond market, and this is the biggest bond bubble the world has ever seen.” In closing, Stockman recommended, “Get out of the stock market. Get out of the bond market and buy some gold.” Watch and read more here-http://bit.ly/2q7ae6a
Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00
Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57
Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33
Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00
Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00
Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67
Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00
Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33
-A couple of weeks back, a subscriber asked me to explain what I meant by JPMorgan “skimming” off silver from the near frantic and highly unprecedented physical turnover in COMEX silver warehouse movement. I answered him privately, but I’m not so sure I did an adequate job in explaining my premise, so please let me have another crack at it here. I’ve always thought that the incredibly large physical “churn” in the COMEX silver warehouses created the opportunity for someone to dip into the turnover and extract metal without it being widely noticed. I mean, if there was hardly any physical turnover in publicly trackable exchange warehouses, as is the case in just about every commodity except for COMEX silver, then there wouldn’t be any real opportunity to dip into a movement that didn’t exist.
Try to think of it this way. We’ve all seen footage of the bears lining up and positioning themselves for a salmon run in Alaska. There are so many fish running, that no matter how many the bears may catch and gorge on, it hardly reduces the run. When the salmon aren’t running, the bears must eat something else. There have been no big salmon runs in other commodities, just in COMEX silver. This consistent six year salmon run in physical silver between the COMEX warehouses has allowed just one big grizzly to gorge on physical silver nearly undetected and unchallenged by other bears. I think JPMorgan may have secured as many as 150 million oz of its 600 million oz hoard in this manner. Silver analyst Ted Butler June 10 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN
-Ted Butler: Expecting the Unexpected. I am convinced that silver will soon explode in price in a manner of unprecedented proportions, both in terms of previous silver rallies and relative to all other commodities. By unprecedented, I mean that the price of silver will move suddenly and shockingly higher in a manner never witnessed previously, including the great price run ups in 1980 and 2011. The highest prior price level of $50 will quickly be exceeded. By “soon”, I mean that the move can commence at any time, but more likely before many weeks or months have gone by.
I know that the price of silver has been declining on a daily basis nonstop for three weeks now, itself an unprecedented move, but I also know the reason for the decline and how the sharply improved COMEX market structure has always guaranteed a rally in a reasonable period of time. The only question is whether on the next silver price rally will JPMorgan add aggressively to its COMEX short positions. I’m suggesting JPMorgan is not likely to add to short positions on the next rally. At the heart of the unprecedented move higher in the price of silver is the manner in which it will occur. It will be a price move like no other. It will be the greatest short covering rally in history. That’s guaranteed because the COMEX silver short position is the largest and most concentrated short position in history. There is no buying force in the financial markets more powerful than panicky buying by those forced to cover short positions.
The largest short position ever holds the potential for the greatest short covering rally ever. For more than 30 years, COMEX silver futures have had the largest short position of any commodity in terms of real world production and inventories. Yet while silver prices have had some notable rallies over the decades, none have included a genuine short covering panic. In fact, the uniquely large and concentrated nature of the COMEX silver short position (meaning it is held by just a few traders) is the mechanism by which silver has been manipulated in price all these years. Read more here-http://bit.ly/2pYApJr
-GFMS: World 2016 silver mine output sees first drop in 14 years. Global silver mine production dropped in 2016, falling for the first time in 14 years while demand for the precious metal in the solar sector surged to a record, said Johann Wiebe, senior metals analyst for Thomson Reuters GFMS on Thursday. Silver mine production fell 0.6 percent to 885.8 million ounces, the lowest since 2002, largely due to lower by-product output the from lead, zinc and gold sectors as well as lower silver scrap supply, said Wiebe.
Wiebe highlighted results of the World Silver Survey 2017, which was released by the Silver Institute and produced by GFMS. Total silver supply in 2016 fell by 32.6 million ounces to 1.007 billion ounces, the survey showed. On the demand side, solar panel and ethylene oxide sectors, growing industrial applications for silver, rose to records at 76.6 million ounces and 10.2 million ounces, respectively. Silver is used as a catalyst to produce ethylene oxide, an essential ingredient in plastic, including polyester. Despite higher silver prices, global silver scrap supply fell to 139.7 million ounces in 2016, down from 141.1 million ounces in 2015 and the lowest level since 1996, Wiebe said.
Physical and exchange-traded product investments fell to 253.8 million ounces in 2016, down 7 percent from 2015. This was, however, 23 percent higher than the average for the decade preceding 2015. Total physical silver demand fell by 11 percent to 1.03 billion ounces, due to weaker jewelry and silverware off take as well as retail investment. The largest component of physical demand industrial applications fell 1 percent to 561.9 million ounces, Wiebe said. Read more here-http://reut.rs/2rwRATZ
-Ed Steer: JP Morgan, Scotiabank, & Silver Presentation. Watch more here-http://bit.ly/2s1zlrP
-John Embry: Silver The Most Underpriced Asset On The Planet. We now have silver open interest on the Comex at an all-time high, while the price of silver is several dollars lower than the last time this level of open interest was reached. Think about it, silver is unquestionably the most underpriced real asset on the planet, and yet there is a cumulative short interest on the Comex representing considerably more than one billion ounces, which is materially more than one year’s mine production. And unlike gold, a significant proportion of silver mine production is consumed annually in growing industrial use. Thus, the only reason any parties would be short his amount of silver at these price levels is for manipulative purposes.
If silver were to suddenly reflect its true value, which I believe is closer to $100 per ounce, the price of gold would also explode upwards and these ludicrously low interest rates, which have been created to keep a seriously over-indebted global financial system afloat, would be revealed as totally bogus. The implications of this would be catastrophic. The bond markets would virtually collapse, a lot of seriously overpriced stocks would be re-priced sharply lower, real estate would be under siege as well as many of the world’s economies. The impact of these developments on pension funds, banks, insurance companies, etc, would be devastating. Thus, the powers that be will go to great lengths to suppress gold and silver prices until the very end of this saga. Unfortunately for society as a whole, I think the end is rapidly approaching. Read more here-http://bit.ly/2o7J3DQ