The World Financial Report

World Financial Report – July 6th, 2017

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WORLD FINANCIAL REPORT ON RADIO July 6th 2017
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Metals Trading Has a Paper Fraud Problem. For all the high-tech wizardry of modern financial markets, there’s one corner of the commodity world that still depends almost entirely on printed paper making it an easy target for crooks. Buyers and sellers of base metals like copper, aluminum and nickel use documents known as warehouse receipts to prove every pound involved in a transaction actually exists and who owns it.

The receipts, from a long list of issuers who often stamp them with holograms and secret codes, have become the linchpin of bank loans backed by the metal as collateral. But like most pieces of paper, warehouse receipts can be faked, and there are signs that more lenders are being ripped off by crooks exploiting weaknesses in what commodity businesses refer to as trade financing. For the second time since 2014, some banks are facing multimillion-dollar losses after being tricked into making loans secured by goods that didn’t exist. Read more here-https://bloom.bg/2sDldqO

-CHART OF THE WEEK: Burger Costs Hit a 3-Year Low Ahead of Independence Day. With beef this cheap for the Fourth of July, you might as well invite the whole neighborhood over for burgers. Thanks to a boom in supply, retail-beef prices are low enough to compete with pork and poultry. Americans spent $803 million on beef, the most popular U.S. Independence Day meat, in the two weeks near the Fourth of July holiday last summer, a Nielsen report shows.

The celebration is the nation’s top grilling day of the year, with 87 percent of consumers expected to barbecue, according to Weber-Stephens Products LLC. U.S. beef production is rising for a second straight year, helping to boost meat and poultry output to the highest ever. While wholesale prices have fluctuated this year, ground beef at the grocery store remains near the cheapest since 2014. And hedge funds are signaling they expect prices will remain low. They’ve cut their wagers on a rally for cattle futures to the smallest in 11 weeks. Read more here-https://bloom.bg/2tOhUgq

-CHART OF THE WEEK: Bitcoin Has Become So Volatile It Looks Like an ETF on Steroids. There’s volatility. And then there’s bitcoin volatility. With virtual currency flash crashes and a recent string of ransomware attacks all but obliterating bitcoin’s incremental stability, it’s become hard to find a comparable asset. Indeed, the closest match is an exchange-traded fund on leverage steroids that’s supposed to be highly volatile. Bitcoin now swings more than the Direxion Daily Junior Gold Miners Index Bull 3x Share, or JNUG, an ETF that uses borrowed funds to deliver three times the return on an index tracking small-cap mining companies. And the volatility spread between bitcoin and the inverse short version of the fund, JDST, is the smallest in more than three years. Read more here-https://bloom.bg/2teTFXq

-Bitcoin to $50,000 Is Latest Call From Prolific Stock Picker. Read more here-https://bloom.bg/2uqWOlB

-Stephen Poloz has done another interview ahead of next week’s rate decision, and he isn’t attempting to talk down market expectations for a hike. He told Germany’s Handesblatt the Bank of Canada is confident inflation will be “well into an uptrend” by next year. He also shrugged off the impact of higher rates for the housing market, saying there’s a “resilient structure” in this country. Implied probability of the Bank of Canada raising rates on July 12 remains above 80 per cent. One week ago today the probability was just 38.7 per cent. With just over a week to go before the decision we’ll continue evaluating what higher rates will mean for the economy and your money. BNN

-The implied probability of the Bank of Canada raising rates next week by a quarter percentage point remains close to 90 per cent. The Canadian dollar reached as high as 77.44 cents U.S. Tuesday. It hasn’t hit 78 cents since August 19. BNN

-Toronto City Council today will put the ball in motion for a possible tax on vacant homes in the city. Council is set to discuss an executive committee recommendation that would see the city launch consultations and report back to the executive committee on September 26. We’ll track developments and use this as the basis for teeing up the next batch of GTA home sales data, which is due for release on Thursday. BNN

-New data from the Ontario government shows foreign buyers accounted for 4.7 per cent of home sales in the Greater Golden Horseshoe region between April 24 and May 26. That’s pretty consistent with the 4.9 per cent figure previously reported by the Toronto Real Estate Board, thus suggesting the new tax on foreign speculators hasn’t scared off many buyers. Worth pointing out, however, that Realosophy’s John Pasalis reckons foreign buying activity is closer to eight per cent in the Greater Toronto Area and as much as 15 per cent in York Region. BNN

-The Fraser Institute is warning Ontario has a lot to lose if the housing market turns south. According to the think tank, housing activity accounted for 29 per cent of the province’s economic growth last year; it says that’s particularly worrisome when business investment is mired below peak levels thanks to high costs in the province. “The entire provincial economy is so reliant on Toronto’s housing market for growth, that a cooling off or worse, a burst would be felt across Ontario, not just in the GTA,” said researcher Philip Cross in a statement. He added there’s an element of irony here after Central Canada showed “smugness” when Alberta’s economy was walloped by the crash in crude oil prices. BNN

-OPEC’s crude production rose to the highest this year in June as member nations exempt from output curbs pumped more. Members of the Organization of Petroleum Exporting Countries boosted their output by 260,000 barrels a day compared with May, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data. Half of the increase came from Libya and Nigeria, which are exempt from making cuts under the deal agreed between OPEC and its allies. OPEC began production cuts in January to reduce swollen global inventories and bolster the price of oil, which is still stuck at half its 2014 level. In May, OPEC and its partners, including Russia, extended their agreement for a further nine months through March 2018 because the oil market had failed to rebalance. Bloomberg

-Analysts at Raymond James invoked one of U.S. President Donald Trump’s favorite phrases to explain oil’s descent into a bear market and bolster their case for why crude can rise to as much as $65 a barrel. Conventional wisdom holds that resilient U.S. shale drilling, underwhelming progress towards OPEC’s goal in slimming global oil inventories, and output recoveries from nations exempt from the deal to curb production helped push crude down more than 20 percent from recent peaks. But according to analysts led by J. Marshall Adkins noted oil bulls the bad times for oil can be chalked up to “fake news” that amplified the downside. Bloomberg

-BHP Billiton Ltd. Chairman Jacques Nasser said the timing of its $20 billion spree into U.S. shale in 2011 was a misstep and that if the miner could turn the clock back it wouldn’t have invested in the assets. The comments from Nasser, who will pass over the chairman’s baton to its youngest director Ken MacKenzie on Sept. 1, follow similar remarks from Chief Executive Officer Andrew Mackenzie, who said in May the deals were poorly timed. “In terms of shale, if you had to turn the clock back, and if you knew what we knew today, you wouldn’t do it,” Nasser, who took up his role in 2010, said at a Sydney lunch briefing. “The timing was way off.” Bloomberg

-Italy’s chronic unemployment problem has been thrown into sharp relief after 85,000 people applied for 30 jobs at a bank nearly 3,000 candidates for each post. With youth unemployment nudging close to 40 per cent and the overall level at 11 per cent, steady jobs are in great demand. But even the managers at the Bank of Italy were astounded by the huge number of people who contacted them. telegraph.co.uk

-North Korea said Tuesday it successfully test-fired an intercontinental ballistic missile, a claim that brings the isolated state closer to its aim of building a device capable of hitting the continental U.S. with a nuclear warhead. The missile was a newly-developed ICBM that reached an altitude of 2,800 kilometers (1,740 miles) and was fired at its highest angle, an announcer said on North Korean state television. She said the projectile that flew for 39 minutes could hit “anywhere in the world.” Leader Kim Jong Un signed the order for the test of the missile called a Hwasong-14, according to the state-run Korean Central News Agency. South Korea’s Joint Chiefs of Staff said the projectile flew about 930 kilometers. Japan’s Defense Ministry said it reached an altitude that “greatly exceeded” 2,500 kilometers. Bloomberg

-Marc Faber: There will be another ‘massive’ financial crisis in my lifetime. Marc “Dr. Doom” Faber has a warning for investors brace yourselves for another financial crisis. Just last week, Federal Reserve Chair Janet Yellen said another crisis like the one in 2008 was not likely to happen “in our lifetime.” Faber told CNBC’s “Squawk on the Street” on Monday that “I’m 71 and for sure in my lifetime, unless I have an accident tomorrow, I will see another financial crisis and a massive one.” He’s particularly concerned about the high levels of debt around the globe. “We have a colossal credit bubble in the world. Can it expand? Yes, but it cannot expand forever.

One day there will be a limit and one day there will be another huge crisis because the debt level today is higher than it was in 2007,” the editor The Gloom, Boom & Doom Report said. The noted bear also has been calling for a big drop in the U.S. stock market and believes “we have a bubble in everything.” That said, he told CNBC, “I’m less bearish than I used to be. That worries me.” Because no one knows what the world will look like five years from now, staying diversified is key, Faber said. That means some money in real estate, stocks, bonds and precious metals. “Although I’m pessimistic about the world and especially about political and social developments in the western world, I can still sleep well at night because I have the 25 percent exposure to equities.” He would look at international stocks over the U.S. market. Read more here-http://cnb.cx/2sHcVOq

-‘Ease up on the accelerator’ before stoplight: Poloz comments on interest rates ahead of decision date. Bank of Canada to make interest rate decision on July 12. Just over a week ahead of the Bank of Canada’s next decision on interest bank, governor, Stephen Poloz says the bank must look ahead to where the economy is expected to be in 18 to 24 months when it comes to setting monetary policy. “As our senior deputy governor said a week ago, when you are driving towards a red stoplight, you ease up on the accelerator well before you get there instead of waiting for the last second to stop,” Poloz said in an interview with Germany’s Handelsblatt that was published Tuesday.

“If we only watched inflation and reacted to inflation, we would never reach our inflation target, we’d always be two years behind in the reaction,” he said, adding that the bank must look to other inflation-predicting indicators. The Canadian central bank is due to release its next interest rate decision on July 12, with some economists now expecting the bank to raise rates for the first time in seven years. The Bank’s target for the overnight rate currently sits at 0.5 per cent, with markets putting an 87 per cent chance on a bump of 25 basis points next week.

In the interview with Handelsblatt, Poloz expressed confidence in the ability of Canadian households to weather a rate hike, despite their growing debt loads. “The [Canadian] financial system is very well underwritten, completely differently from the U.S. experience in the 2006-2008 period,” he said. “People have a buffer in their finances in case interest rates do rise. There’s quite a resilient structure to the market,” Poloz added. Read more here-http://bit.ly/2tmGaU3 and http://bit.ly/2uGOqO6

-Rosenberg says he’ll turn bearish if loonie goes above 80 cents. The loonie’s rally is closer to its end than its start, according to David Rosenberg. The Gluskin Sheff + Associates chief economist told BNN on Thursday that the Canadian dollar is very close to what he considers ‘fair value.’ “I would say that 78-to-80 cents is where it should be based on growth, based on interest rate differential, and based on commodity prices,” Rosenberg said. “We’re almost there if we break above that I will more gladly turn bearish on the currency, but right now I think 80 per cent of this up-move in the Canadian dollar from the recent lows is behind us.”

The Canadian dollar traded above 77 cents U.S. for the first time since Feb. 2 on Thursday as expectations for a July 12 interest rate hike from the Bank of Canada climbed. Does that mean 80 U.S. cents is in the loonie’s future? “Nothing says that you can’t overshoot to the upside and break above 80 cents [U.S.],” Rosenberg said. “But does it have at least at this stage at least two-to-three cents upside. If we’re sort of chasing pennies in front of the steamroller, yeah, it probably has more upside right now. But we’re getting towards the tail end of this Canada trend rally in the loonie from my lens.” Rosenberg maintained his prediction for an interest rate hike by summer’s end without committing definitively to July 12. “I would not be surprised if they go in July.

It’s not my call. I think they’ll go by the end of the summer. But if they were to go in July, I wouldn’t exactly fall off my chair,” Rosenberg said. “A lot of people were saying after last Friday, that with inflation plunging and across the board with all these price measures the Bank of Canada pays attention to, the view is certainly ‘they can’t raise interest rates with the inflation numbers falling.’ If anything, in the past couple days the Bank has stepped up its rhetoric that they’re gonna move.” “I wouldn’t be surprised if they take back the two emergency rate cuts they engineered back in 2015, strictly because the emergency isn’t there anymore,” he added. Read more here-http://bit.ly/2tKgx1J

-BoC interest rate decision: 3 reasons to hike, 3 reasons to hold. The markets are getting excited about an interest rate hike from an increasingly hawkish Bank of Canada. As Governor Stephen Poloz and his deputies bash us over the head with warnings to that effect, here are three reasons in support of raising the central bank’s key overnight rate at the July 12 meeting, and three reasons not to hike. Read more here-http://bit.ly/2tK6Sbk and http://bit.ly/2sosNkG

-Canadians’ love for debt taking us into uncharted territory, PBO report warns. Households owed $174 for every $100 in disposable income in 1st quarter, Parliamentary Budget Office says. Canadians are expected to keep piling on more debt, even in the face of a long-anticipated increase in interest rates, taking household financial vulnerability to levels never seen before, a new report from the Parliamentary Budget Office says. Household indebtedness hit 174 per cent in the first quarter of 2017, according to the PBO. That means Canadian households owed $174 for every $100 in disposable income.

That indebtedness ratio “increased sharply over 2002 to 2011” before evening out at about 170 per cent in early 2015. Then it started rising again. The budget watchdog expects household indebtedness to hit 180 per cent by the end of 2018. Policymakers are particularly concerned about Canadian households’ debt service ratio, which measures the principal and interest payments that households are obliged to make against household disposable income.

That ratio, which is considered an indicator of households’ ability to service debt, is used to measure how vulnerable households are to economic shocks like unemployment or interest rate hikes. In the first quarter of this year, Canadian households owed $14.20 in principal-and-interest payments on debt for every $100 in disposable income, according to the Parliamentary Budget Office. That number has increased slightly from mid-2015, and is projected to increase further: the PBO expects it to hit $16.30 per $100 by the end of 2021. Read more here-http://bit.ly/2rAmomi

-Canadians owe more than $1.7T, up 7% in past year, Equifax says. Average Canadian now owes more than $22,000 on top of their mortgage, and the amount is rising fast. Canadians’ appetite for debt is as insatiable as ever, a new report from credit monitoring firm Equifax says. Equifax calculates that Canadian consumers owed $1.729 trillion at the end of the first quarter, an increase of 6.9 per cent in a year. Not counting mortgage debt, the average Canadian consumer owed $22,125 at the end of March, but on the whole borrowers are managing to stay on top of it. “Despite increasing debt numbers, more monthly payments are being made on time, and there are fewer bankruptcies,” Equifax Canada’s senior director of data and analytics Regina Malina said. “At the same time consumers are seeking credit again after several quarters of slowing down, driven by activity in Ontario and Eastern provinces.” Read more here-http://bit.ly/2sKtHaI

-RBC Economics: Toronto housing unaffordability has accelerated at ‘disturbing pace’. Toronto’s housing market has hit its most unaffordable level ever, according to a new report from RBC Economics. The quarterly update, published Thursday, said it took 72 per cent of median pre-tax income in Toronto to cover the cost of home ownership during the first quarter of 2017. The average Canadian household spent 45.9 per cent of its income on owning a home. “Housing affordability in Canada’s most populated area has evaporated at a disturbing pace,” according to the RBC report.

However, the report indicated Ontario’s Fair Housing Plan which introduced 16 housing measures in April has opened the window for some relief. In Vancouver, meanwhile, affordability improved in the quarter but still remained the most expensive city in the country, with its affordability measure sitting at 79.7 per cent. The report said housing heat shifted to surrounding markets like Victoria, where price pressure intensified. RBC also said affordability outside of Ontario and British Columbia improved marginally. Saint John was the most affordable major city in the quarter, despite recording the strongest price increase in the Atlantic region. Read more here-http://bit.ly/2tnKi6l

-‘This will feel severe’: Toronto real estate industry bracing for June sales slowdown. The average price of a Toronto home likely tumbled more than $100,000 in June from the frenzied peak prices of earlier this year, according to one Toronto realtor. The greater Toronto housing market took a sharp turn following Ontario’s 16 new measures to rein in the region, as listings skyrocketed and sales plunged. Average prices hit a record peak of $920,791 in April the same month Premier Kathleen Wynne introduced the measures.

Thursday, the Toronto Real Estate Board will release its statistics for June. While prices are expected to be some five per cent higher compared to June 2016, the average price should be “down around 12 to 15 per cent from the peak prices in April,” John Pasalis, president and broker at Realosophy.com, told BNN in an email. A pullback of that size would mean the average price for June could be down some $110,000 to $138,000 from the April peak. Based on Zoocasa’s observations, sales volumes could be 35 per cent lower, year over year, across all property types. “We expect freehold sales to be down over 40 per cent and condo sales to be down more than 20 per cent compared to last June.” Read more here-http://bit.ly/2tJWz7c

-Household income falling at fastest rate since 1976 as UK savings rates crash. Economic growth following the Brexit vote has come to an abrupt halt as consumers raid piggy banks to battle rising inflation and stalled wages. The consumer-driven momentum that has kept the British economy afloat since the Brexit vote is declining rapidly, with new data showing households in the grip of the most protracted squeeze on living standards since the economic crisis of the mid-1970s.

Against a backdrop of rising prices and stagnant wage growth, incomes adjusted for inflation have now fallen for three successive quarters, the first time this has occurred since the International Monetary Fund had to bail Britain out in 1976. At the same time, the amount being set aside as savings has now slipped to just 1.7% of disposable income the lowest level on record, and a fraction of the near-10% average for the last 50 years. Just a year ago, it was more than three times the current rate. Read more here-http://bit.ly/2tIJBXI

-Fed minutes suggest increasing tensions on inflation shortfall. Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed’s last policy meeting on June 13-14 released on Wednesday. The details of the meeting, at which the U.S. central bank voted to raise interest rates, also showed that several officials wanted to announce a start to the process of reducing the Fed’s large portfolio of Treasury bonds and mortgage-backed securities by the end of August but others wanted to wait until later in the year.

“Most participants viewed the recent softness in these price data as largely reflecting idiosyncratic factors however, several participants expressed concern that progress might have slowed and that the recent softness in inflation might persist,” the Fed said in the minutes. The committee questioned why financial conditions had not tightened despite recent rate rises and a few said equity prices were elevated. Read more here-http://reut.rs/2tigABh and https://bloom.bg/2uLB6YB and https://bloom.bg/2sNAqAP

-U.S. Can Fund Government Through Early to Mid-October, CBO Says. The U.S. Treasury can fund the government through early to mid-October under the current borrowing limit, the Congressional Budget Office said, giving lawmakers leeway to wait until after their summer recess to increase the debt cap despite pressure from the Trump administration to act sooner. “However, the timing and magnitude of revenues and outlays over the next few months could vary noticeably from CBO’s projections, so those measures could be exhausted and the Treasury could run out of cash earlier or later than CBO projects,” the

Washington-based organization said Thursday in a report. While Treasury Secretary Steven Mnuchin has urged lawmakers to raise the debt limit as soon as possible, he’s said the government can finance itself through at least the beginning of September and that he’s not concerned about the impact of lower-than-expected tax revenue. The CBO said in March that it expected the government to exhaust its borrowing capacity sometime in the fall. The Treasury Department has been relying on special accounting maneuvers since March to stay under the nearly $20 trillion current debt cap. Read more here-https://bloom.bg/2sKGkT1

-CBO: Income Taxes Up 9.5% Next Year; But Debt Climbs More Than $1 Trillion. Unless current laws are changed, federal individual income tax collections will increase by 9.5 percent in fiscal 2018, which begins on Oct. 1, according to data released today by the Congressional Budget Office. At the same time, however, the federal debt will increase by more than $1 trillion. In fiscal 2017, which ends on Sept. 30, the federal government will collect $3.315 trillion in total taxes, according to the projections the CBO released with its “Update to the Budget and Economic Outlook: 2017 to 2027.” That $3.315 trillion in total taxes will include $1.574 trillion in individual income taxes; $1,164 trillion in payroll taxes; $310 billion in corporate income taxes; and $267 billion in other taxes. Read more here-http://bit.ly/2tRDJfp

-The World Is Now $217,000,000,000,000 In Debt And The Global Elite Like It That Way. The borrower is the servant of the lender, and through the mechanism of government debt virtually the entire planet has become the servants of the global money changers. Politicians love to borrow money, but over time government debt slowly but surely impoverishes a nation. As the elite get governments around the globe in increasing amounts of debt, those governments must raise taxes in order to keep servicing those debts.

In the end, it is all about taking money from us and transferring it into government pockets, and then taking money from government pockets and transferring it into the hands of the elite. It is a game that has been going on for generations, and it is time for humanity to say that enough is enough. According to the Institute of International Finance, global debt has now reached a new all-time record high of 217 trillion dollars. Read more here-http://bit.ly/2sqzGCj and http://bit.ly/2sqtz0z

-Robert Shiller: “The Index I Invented Is At Levels Last Seen In 1929 And 2000”. With the Shiller CAPE index having surpassed the 30x for the first time since September 2001, its creator, Nobel Laureate and Yale School of Management Economics Professor Robert Shiller is warning investors that they should be cautious about investing in such an “unusual” market. “The CAPE index that John Campbell and I devised 30 years ago is at unusual highs.

The only time in history going back to 1881 when it has been higher are, A: 1929 and B: 2000.” “We are at a high level, and its concerning.” However, the index has risen to these levels before without precipitating an immediate collapse, Shiller said. Indeed, during the history of the stock market, it has only traded at a richer valuation during one period June 1997 to September 2001 – as the dotcom farce blew and burst. Historical data for the index is available going back to 1881. Read more here-http://bit.ly/2sqKeB7

-Paul A. Merriman: Why picking stocks is only slightly better than playing the lottery. Investors who think they can be successful stock pickers are about to get some sobering news from new academic research. The good news: Yes, buying one stock gives you better odds than buying a lottery ticket. The bad news: Those “better” odds are still much too awful to stake your future on. I recently learned of a new academic study entitled “Do stocks outperform Treasury Bills?” by Hendrik Bessembinder, a finance professor at Arizona State University.

The study evaluated every one-month return of every U.S. common stock traded on the New York and American stock exchanges and the Nasdaq all since 1926. That’s a lot of data: 25,782 distinct stocks (companies, in other words) and 3,524,849 monthly returns from July 1926 through December 2015. (Note to math nerds: The latter number is much less than you would expect, because nearly half of the total stocks went away in less than seven years.) In the abstract of his study, Bessembinder summarized some of his key findings:

So while the stock market Dow Jones and S&P 500 created about $32 trillion in lifetime wealth over this approximately 90 years, more than half of that came from only 86 top-performing stocks (out of nearly 26,000). Think you can pick the future winners that well? Good luck! I agree with Bessembinder that diversification is essential to avoid the 96% probability that any stock you pick today will fail to do even as well as the lowly T-Bill by the end of one month. Read more here-http://on.mktw.net/2sqm6yB

-Baby Boomers are starting to retire, and that could have a surprising impact on stocks. Last year, the first baby boomers turned 70 and that spells trouble for investors. Speaking at the Mauldin Economics Strategic Investment Conference, Grant Williams, Co-Founder of RealVision TV, warned investors about the wave of forced selling by millions of retirees and the impact it will have on their portfolios. “Boomers are the largest generation in history to retire, and they’re doing so right now.”

In fact, according to Pew Research, 1.5 million Americans turned 70 last year and will do so every year for the next 15 years. “When Boomers are retiring in their millions, they have 70% of their portfolios in equities at a point in time when we are due a recession,” pointed out Grant Williams. “And in recession, bad things happen the average stock market drawdown in recession since 1980 is 37%.” Read more here-http://read.bi/2thukw9

-Pink Floyd’s Drummer Is the Warren Buffett of Classic Ferraris. A love of car racing has grown into a fortune for Pink Floyd drummer Nick Mason. Nick Mason made his first fortune playing drums for Pink Floyd. His second came from racing old cars. Specifically, old Ferraris that today are among the most expensive cars on the planet. This weekend he took the star of his collection—a 1962 Ferrari GTO—flat out up the 1.16-mile track at the Goodwood Festival of Speed, about 60 miles south of London in the rolling South Downs National Park.

The annual event has grown from a small, hillclimb race to a full-on weekend of supercars from around the world. “I never wanted to be a car collector, I wanted to go motor racing,” Mason said. “What happened was that, thanks to the success of the records, I ended up being able to keep everything I ever raced.” He bought the 250 Ferrari some four decades ago. A similar car sold for a record $38.1 million in 2014. “Everyone thought I was completely insane, including myself I think,” Mason said. “But now they think I am the sort of Warren Buffett of motoring.” Read more here-https://bloom.bg/2sE1gQx

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RARECOLOREDDIAMONDS.COM

Rarecoloreddiamonds.com Featured Diamond of the Week. This week’s Diamond is a 0.91 Carat Radiant Cut Fancy Intense Yellowish Green. Harold Seigel-Watch here-http://bit.ly/LIsp98

-Sotheby’s Magnificent Jewels Sale Including the Legendary Stotesbury Emerald. April 25 2017, 10:00am, New York City. Auction results here-http://bit.ly/2tQLTVa

-Lot 87-Important Rose Gold and Fancy Pink Diamond Pendant. Set with a pear-shaped Fancy Pink diamond weighing 11.19 carats, suspended from a rose gold chain. Accompanied by GIA report no. 15260517, dated 29 September 2006, stating that the diamond is Fancy Pink, Natural Color, Internally Flawless. Estimate 1,000,000-2,000,000. Lot Sold 2,412,500 USD. See more here-http://bit.ly/2tIWSQ7

-Lot 88-Important Platinum, Fancy Gray-Blue Diamond and Diamond Ring. Set with an emerald-cut Fancy Gray-Blue diamond weighing 5.07 carats, the mounting accented by baguette, triangle and single-cut diamonds weighing approximately .30 carat, size 3¾, expandable; circa 1930. Accompanied by GIA report no. 2173943317 stating that the diamond is Fancy Gray-Blue, Natural Color, VVS2 clarity. Estimate 750,000-1,000,000. Lot Sold 1,572,500 USD. See more here-http://bit.ly/2tMetWQ

-Lot 101-Rare Platinum, Fancy Vivid Green Diamond and Diamond Ring. Centering a cut-cornered square mixed-cut Fancy Vivid Green diamond weighing 1.64 carats, flanked by two cut-cornered triangle-shaped diamonds weighing approximately .65 carat, size 6¼. Accompanied by GIA report no. 5171976742 stating that the diamond is Fancy Vivid Green, Natural Color, SI2 clarity. Estimate 1,000,000-1,500,000. Lot Sold 1,212,500 USD. See more here-http://bit.ly/2tJ2sSC

-Lot 106-Exquisite Platinum, Fancy Vivid Blue Diamond and Diamond Ring. Of crossover design, set with two pear-shaped Fancy Vivid Blue diamonds weighing .96 and .64 carat, accented by round diamonds weighing .78 carat, size 6½. Accompanied by GIA report nos. 2105997540 and 2105997539 stating that the diamonds are both Fancy Vivid Blue, Natural Color, VS1 clarity. Estimate 700,000-1,000,000. Lot Sold 876,500 USD. See more here-http://bit.ly/2tIT29o

-Lot 230-Platinum, Gold, Fancy Deep Yellow Diamond and Diamond Ring. Centering an emerald-cut Fancy Deep Yellow diamond weighing 6.17 carats, the mounting set with small round diamonds weighing approximately .25 carat, size 6¼. Accompanied by GIA report no. 10950789, dated January 11, 2000, stating that the diamond is Fancy Deep Yellow, Natural Color, VVS1 clarity. Estimate 150,000-200,000. Lot Sold 750,500 USD. See more here-http://bit.ly/2tpJn5l

-Lot 83-Platinum, Fancy Intense Blue Diamond and Diamond Ring. Centering a marquise-shaped Fancy Intense Blue diamond weighing 1.14 carats, accented by baguette and single-cut diamonds weighing approximately .42 carat, size 5¾. Accompanied by GIA report no. 11592693, dated August 1, 2001, stating that the diamond is Fancy Intense Blue, Natural Color, VS2 clarity. Estimate 200,000-300,000. Lot Sold 492,500 USD. See more here-http://bit.ly/2tpWyTy

-Lot 97-Gold, Fancy Light-Yellow Diamond and Colored Diamond Ring. Centering a cut-cornered rectangular modified brilliant-cut Fancy Light Yellow diamond weighing 15.34 carats, flanked by two heart-shaped diamonds of yellow hue weighing approximately 3.40 carats, size 3½, fitted with inner sizing spheres. Accompanied by GIA report no. 2185123302 stating that the diamond is Fancy Light Yellow, Natural Color, VS1 clarity. Please note the two heart-shaped diamonds have not been tested for natural origin of color. Estimate 100,000-150,000. Lot Sold 162,500 USD. See more here-http://bit.ly/2tq8BjO

-Lot 35-Platinum, Gold, Fancy Intense Yellow Diamond and Diamond Ring. Centering a cushion-cut Fancy Intense Yellow diamond weighing 7.22 carats, flanked by trapeze-cut diamonds weighing approximately 1.10 carats, size 6½. Accompanied by GIA report no. 2185123420 stating that the diamond is Fancy Intense Yellow, Natural Color, VS1 clarity. Estimate 80,000-120,000. Lot Sold 112,500 USD. See more here-http://bit.ly/2tgVlj6

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GOLD

-Ron Paul: Not a ‘total shock’ if stocks plummet 25% and gold soars 50% by October. A painful correction is coming and there’s little that can be done to prevent it, according to former Republican congressman and libertarian firebrand Ron Paul. Speaking to CNBC last week, the former GOP presidential contender argued the economy is not as strong as Wall Street consensus believes, and the situation could turn ugly as soon as October. “If our markets are down 25 percent and gold is up 50 percent it wouldn’t be a total shock to me,” said Paul recently on “Futures Now.” That scenario would drag the S&P 500 Index as low as 1,819, and gold as high as $1,867 an ounce from current levels. Read more here-http://cnb.cx/2sqTVzK

-Frank Holmes: SWOT Analysis Gold Has Outperformed the Stock Market Since 2000. Read more here-http://bit.ly/2tio9b9

-CHART OF THE WEEK: UBS Wealth Recommends Buying Gold Near $1,200 for Insurance. Gold will probably trade in a range of $1,200 to $1,300 an ounce in the short-term as the metal tracks U.S. real interest rates, according to UBS Group AG’s wealth management unit. “We’re not saying we have a bullish bias; we’re not saying we have a bearish bias,” Wayne Gordon, executive director for commodities and foreign exchange, said in an interview on Tuesday. “We’re saying that tactically, people should be buying it somewhere near $1,200 and selling it again somewhere near $1,300, and it’s because we have a view that real rates go sideways. So the pickup in nominal rates will be equally matched by the pickup in inflation.”

Bullion climbed almost 9 percent in the first quarter, buoyed by worries over Donald Trump’s presidency and geopolitical risks. Prices have since fallen and posted their first monthly decline this year in June. On Monday, the metal fell the most since November as equities and bond yields rallied, before North Korea’s launch of what the U.S. said was an intercontinental ballistic missile sparked a small rebound. The price was at $1,222.05 on Wednesday. If U.S. unemployment keeps falling, and the Federal Reserve keeps raising interest rates no matter what the inflation data show, that will be negative for gold in the short term, Gordon said.

Still, solid demand this year and weaker output, coupled with a lower dollar, are positive for prices, he said. If equity valuations start to drop, investors could turn to gold too, he added. Gold could also act as insurance if the labor market doesn’t show further improvement in the U.S. and inflation doesn’t pick up, which would make the Fed pause on its tightening path, or if global growth slows, said Gordon. “We like the insurance qualities for gold just from an unknown perspective at these sorts of levels,” Gordon said. Bullion rose as much as 0.7 percent in two days after North Korea’s rocket launch revived geopolitical concerns.

U.S. Secretary of State Rex Tillerson called the act a “new escalation of the threat” and the United Nations Security Council plans a closed session later Wednesday after a U.S. request. Gold will probably range from $1,150 to $1,350 in the second half, depending on how global equity markets perform, whether Trump can implement his agenda and the strength of the dollar, Robin Tsui, an exchange-traded fund gold specialist with State Street Global Advisors, said in Hong Kong Tuesday. Investor holdings in the SPDR Gold Trust, the biggest ETF backed by bullion, have shrunk to 846.29 metric tons, the lowest level in almost three months. Read more here-https://bloom.bg/2uLwFwZ

-‘Vulnerable’ Gold at Seven-Week Low as Dollar Recovers Losses. Gold fell the most since December as gains in the dollar and higher equity prices limited demand for haven assets. The dollar rose against other G-10 currencies and U.S. stocks advanced for a second session, while the yield on the U.S. 10-year note touched the highest since May 16. Higher yields dampen the allure of non-interest bearing gold. “Gold currently looks vulnerable,” UBS Group AG analyst Joni Teves said in a note.

“Higher yields and market participants digesting a hawkish shift in tone among key central banks of late, while equities stay resilient around all-time highs,” are negative for the metal. Gold for August delivery on the Comex fell 1.9 percent to settle at $1,219.20 an ounce at 1:39 p.m. in New York. The decline was the biggest since Dec. 15. Bullion touched $1,218.50 an ounce, the lowest since May 11. The metal closed below $1,238.40 an ounce, its average over the previous 200 days a measure watched by some traders for price clues. “Ongoing risk appetite” is weighing on gold, analysts including Carsten Fritsch, at Commerzbank AG said in a note. Should gold dip below the 200-day moving average “we would likely see technical follow-up selling.”

June and July are normally middling months for gold, with spot metal typically rising by less than 1 percent, compared with rising 3.9 percent on average in Januaries over the past 10 years, and falling about 1.5 percent in March between 2007 and 2016. In other gold-market news, the Perth Mint reported falling sales in June with 19,259 ounces sold, down by more than a third from May. Meanwhile, Russia increased gold’s share in its international reserves in 2016 to 15 percent from 12 percent. Read more here-https://bloom.bg/2uqRKNV

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SILVER

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

-I mentioned last week, that the larger the raptor net long position, the more it usually proved quite bullish for the price and I still feel that way. However, I am bothered a bit by what is still a large Big 4 short position in gold, which usually isn’t indicative of a sustained bull move. Here’s the dilemma: Back at the price lows going into May 16 and up to Friday’s report, the total commercial net short position is now only 7,000 contracts higher. But the Big 4 are roughly 30,000 contracts more short today, while the raptors are more net long by 34,000 contracts. I’m not sure what to make of this.

I would classify gold’s market structure to be bullish, but perhaps not excessively so (as is the case in silver). I’m mindful that gold hasn’t completely penetrated, at least decisively, its 200-day moving average a classic “all clear” selling signal for the technical funds. Back at the early May gold price lows, the 200-day moving average had been decisively penetrated to the downside. Only a fool would completely disregard the still kind-of-high Big 4 short position and the chance for a blast below the 200-day moving average more decisively than [last] Monday’s price rig job lower. Since I’m primarily interested in silver, my concern is if lower gold prices will be used to influence silver lower as well. Silver analyst Ted Butler July 1 2017 via Ed Steer edsteergoldandsilver.com subscribe here-http://bit.ly/1fdAByN

-Russian academic and political leaders listen to Hugo Salinas Price about silver. Accepting an academic honor last week at a ceremony at the Russian embassy in Mexico City, Hugo Salinas Price, president of the Mexican Civic Association for Silver, argued that Mexico’s central bank should purchase a portion of the country’s silver production for monetary reserves just as China is buying the whole of that country’s gold production. Salinas Price discloses that he has urged Russia to issue a silver ruble in anticipation of replacement of the U.S. dollar standard with a metallic money standard in the world financial system. Salinas Price also discusses the suppression of gold and silver prices by a cabal of U.S.-led central banks and financial institutions. His address is headlined “Silver and the Great Future of Mexico,” and, important as the address is, it may be more important still for showing that academic and political leaders in Russia are listening to him. Read more here-http://bit.ly/2tqPnKS

-Keith Weiner: Silver Is Now Offered At a Discount. Have you ever been in a discussion about gold, when someone blurts out “we don’t have enough gold to operate a gold standard!” We have a standard retort. “Oh, that’s interesting. Please tell us how much gold you think would be necessary, and how you calculated it.” We have never heard a coherent answer to this question. Most people just don’t like gold, and will say whatever words they think will dismiss the monetary question entirely, without actually having to address the issues. The common answer from the gold community is not much better, “We could have a gold standard, if gold was at the right price.” Read more here-http://bit.ly/2srAiHS

-Ronan Manly: How many silver bars are in the LBMA vaults in London? Monetary metals researcher Ronan Manly reports today that the London Bullion Market Association is expected to announce soon just how much silver is held in its members’ vaults in London, which presumably will bring some transparency to an exceedingly opaque market, in which claims to the metal greatly surpass the amount of metal supporting them. Manly’s analysis is headlined “How Many Silver Bars Are in the LBMA Vaults in London?” Read more here-http://bit.ly/2sH8fsd

-Few in U.S. want gold and silver coins when stocks seem strong. U.S. Mint American Eagle gold coin sales in the first half of 2017 were the lowest for this period in a decade, while sales of silver in the period were the weakest since 2008, government data showed on Friday. U.S. Mint sales of American Eagle gold coins totaled 6,000 ounces in June, down 92 percent from June 2016 and bringing the tally for the first half of the year to 192,500 ounces. Sales of American Eagle silver coins totaled 986,000 ounces in June, down 65 percent from a year ago.

This brought sales for the first six months of 2017 to 12.2 million ounces, the weakest for the period since 2008. Spot gold prices rose around 8 percent in the first half of the year, in sharp contrast to a 25 percent rally in the same period of 2016 that spurred strong interest in the physical market. Prices of spot silver were also relatively lackluster the first half of this year, rising around 4 percent. This compares with a 35 percent surge in the first six months of 2016. “U.S. investors seem to be interested in equities since every day seems like a bull market,” said Terry Hanlon, president of Dillon Gage Metals. “The news is positive for stocks and mostly negative for metals; therefore, money is not going into the purchase of U.S. Mint American Eagles.” Read more here-http://reut.rs/2urpmeq

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Investing In Fancy Colored Diamonds

Investing in rare colored diamonds is a long-term investment. The economic cycles of the past 15 years have seen colored diamonds reach new heights in value as price records were broken.

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The Investor Learning Center was created to provide investors with the tools to make the right decision when it comes to investing in Rare Colored Diamonds.
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1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1980
  • Total Price: $50,000
  • Price per Carat: $50,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1990
  • Total Price: $150,000
  • Price per Carat: $150,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2000
  • Total Price: $500,000
  • Price per Carat: $500,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2008
  • Total Price: $1,000,000
  • Price per Carat: $1,000,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2009
  • Total Price: $1,090,500
  • Price per Carat: $1,090,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2020
  • Total Price: $2,828,187*
  • Price per Carat: $2,828,187*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2025
  • Total Price: $4,361,506*
  • Price per Carat: $4,361,506*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1980
  • Total Price: $1,000
  • Price per Carat: $1,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1990
  • Total Price: $3,000
  • Price per Carat: $3,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2000
  • Total Price: $9,000
  • Price per Carat: $9,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2008
  • Total Price: $23,500
  • Price per Carat: $23,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2009
  • Total Price: $26,300
  • Price per Carat: $26,300
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2012
  • Total Price: $32,000
  • Price per Carat: $32,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2020
  • Total Price: $53,993*
  • Price per Carat: $53,993*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2025
  • Total Price: $74,873*
  • Price per Carat: $74,873*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1980
  • Total Price: $60,000
  • Price per Carat: $60,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1990
  • Total Price: $200,000
  • Price per Carat: $200,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2000
  • Total Price: $600,000
  • Price per Carat: $600,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2008
  • Total Price: $1,350,000
  • Price per Carat: $1,350,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2009
  • Total Price: $1,494,000
  • Price per Carat: $1,494,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2020
  • Total Price: $4,555,497*
  • Price per Carat: $4,555,497*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2025
  • Total Price: $7,561,708*
  • Price per Carat: $7,561,708*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Red

  • Year: 1950
  • Total Price: $13,800
  • Price per Carat: $13,800
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 1987
  • Total Price: $927,000
  • Price per Carat: $927,000
  • Source: Auction

1 Carat Radiant Cut Fancy Red

  • Year: 2008
  • Total Price: $2,000,000
  • Price per Carat: $2,000,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2009
  • Total Price: $2,074,600
  • Price per Carat: $2,074,600
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2020
  • Total Price: $3,103,720*
  • Price per Carat: $3,103,720*

*Estimated value based on current market trend