Radio Show Newsletter
WORLD FINANCIAL REPORT ON RADIO JANUARY 31st 2019
CHARTS OF THE WEEK-QUOTES-QUICK HITS
-CHART OF THE WEEK: U.S. Treasury Set to Borrow $1 Trillion for a Second Year to Finance the Deficit. The U.S. Treasury Department is set to maintain elevated sales of long-term debt to finance the government’s widening budget deficit, with new issuance projected to top $1 trillion for a second-straight year. Many strategists at primary-dealer firms predict that this Wednesday’s quarterly refunding announcement will see the Treasury maintain note and bond sales at the record high levels they have boosted them to in recent months. The total amount of 3-, 10- and 30-year securities to be offered at next week’s refunding auctions is seen by most at $84 billion. While that’s $1 billion more than the total for these maturities three months ago, that’s only because the size of the three-year sale was already nudged higher in December. Bloomberg
-U.S. budget deficits are set to widen further in coming years and economic gains will be “muted,” according to the Congressional Budget Office’s latest forecast, an outlook that’s weaker than the Trump administration’s target of at least 3 percent growth. However, the budget deficit will hit $1 trillion two years later than previously projected, mainly due to lower disaster-relief spending, according to non-partisan arm of Congress. The economy is forecast to slow over the next three years with the growth rate easing to 2.3 percent in 2019, 1.7 percent next year, and 1.6 percent in 2021, CBO said in its annual long-term budget outlook on Monday. Growth was an estimated 3.1 percent last year. A burst of economic growth that was fueled by Republican tax cuts in 2018 will fade in the coming years, while tariffs imposed by the Trump administration on everything from solar panels to Chinese goods may dent the economy as well as hit business confidence, CBO said. Bloomberg
-CHART OF THE WEEK: Home Prices in 20 U.S. Cities Rise by Least in Almost Four Years. Home prices in 20 U.S. cities rose in November at the slowest pace since early 2015, decelerating for an eighth straight month as buyers balk at the ever-receding affordability of properties. The S&P CoreLogic Case-Shiller index of property values increased 4.7 percent from a year earlier, down from 5 percent in the prior month, and below the median estimate of economists, data showed Tuesday. Nationally, home-price gains slowed to a 5.2 percent pace. Bloomberg
-CHART OF THE WEEK: U.S. Companies Added 213,000 Workers in January, ADP Data Show. Companies added more workers than forecast to U.S. payrolls in January, signaling a healthy start to the year for the job market despite the partial government shutdown. Private payrolls increased by 213,000 after a downwardly revised 263,000 gain in December, according to data released Wednesday from the ADP Research Institute in Roseland, New Jersey. The median forecast in a Bloomberg survey of economists called for 181,000. Bloomberg
-CHART OF THE WEEK: The sugar high from Alberta’s crude curtailment program may be wearing off. While the program has sent heavy Canadian crude prices surging from record lows to decade highs, it hasn’t done nearly as much to boost companies’ shares and not all producers have been thrilled with the program, including even some of the drillers that lobbied for the policy. Canadian Natural Resources Ltd., a major proponent of the curtailment idea, has said that changes to the cuts’ allocation have made its share of the reduction so large that it will have to shut a pipeline running from some of its operations to Alberta’s main storage hub, according to people familiar with the matter.
And it’s not the only company facing a lower-than-expected production limit. The production cut also has come at an inopportune time for the industry as U.S. sanctions on Venezuela’s state oil company have sent American refiners looking to Canada to fill the output gap. However, with no new export pipelines coming into service until the fourth quarter, Canada’s oil industry will have to rely on a ramp-up in more expensive rail-shipment capacity to help it meet the increasing demand. Bloomberg
–Fed holds rates stable, pledges ‘patient’ approach, expects ‘ample’ balance sheet. The Fed dropped from its statement language that more rate hikes likely would be warranted “further gradual increases.” The central bank instead said it “will be patient as it determines what future adjustments to the target range.” Officials also said they expect to operate with “an ample supply” of bank reserves. The central bank voted unanimously to hold its policy rate in a range between 2.25 percent and 2.5 percent. CNBC
-One out of every three iPhone owners in the US is not upgrading to a new device because new Apple phones are either too expensive or don’t pack compelling enough features according to a new poll conducted by Business Insider. Businessinsider
–Apple’s fiscal Q1 were its worst performance during the holiday quarter in roughly a decade. The results were largely inline with a preannouncement Apple provided earlier in January. But Apple’s forecast for Q2 sales were at the low end of expectations. Apple said its installed base of iPhone users is 900 million the first time it’s disclosed the figure. Businessinsider
-Apple now has $245 billion cash on hand, up 3% from previous quarter. Apple discloses its cash pile in its first-quarter 2019 earnings report on Tuesday. The company reports $245 billion in cash on hand compared with $237.1 billion the previous quarter. Apple has committed to contributing $350 billion to the U.S. over five years beginning in 2018. CNBC
-An Arizona teenager and his mother tried for more than a week to persuade Apple to fix its FaceTime bug which allows users in a group chat to secretly hear what someone is saying before the person answers the call to no avail, according to a Wall Street Journal report published Tuesday. The 14-year-old apparently discovered the vulnerability on January 20 while setting up a “Fortnite” gaming session with his friends. After posting on social media and calling and faxing the company, the woman finally spoke to an Apple support representative last Tuesday, The Journal reported. She emailed a description of the issue and a YouTube video replicating the bug to Apple’s security team last Friday, but the FaceTime group-chat feature was not disabled until Monday after word spread widely on social media. Businessinsider
-Bond King Jeffrey Gundlach says we just got ‘the most recessionary signal’ yet. Consumer confidence at present remains strong, but future expectations are plummeting, according to the Conference Board’s latest readings. Such wide gaps often portend significant economic slowdowns ahead. “The most recessionary signal at present is consumer future expectations relative to current conditions. It’s one of the worst readings ever,” bond guru Jeffrey Gundlach said in a tweet. CNBC
-Howard Schultz: The $21 trillion national debt is the ‘greatest threat domestically to the country.’ “I think the greatest threat domestically to the country is this $21 trillion debt hanging over the cloud of America and future generations,” Schultz tells CNBC. He also says “the economy is strong” and gives Trump “some” credit for the gains. He also cautions that “I don’t believe that the stock market is going to continue to grow at the level it has between now and 2020.” CNBC
-Pelosi invites Trump to hold State of the Union on Feb 5. House Speaker Nancy Pelosi invites President Donald Trump to give the State of the Union on Feb. 5. The government shutdown fight previously delayed the president’s speech. CNBC
-Most Americans and some GOP senators don’t want Trump to declare a national emergency to get his border wall. Most Americans oppose President Donald Trump’s potential emergency declaration to build his proposed border wall, according to a new poll. Trump appears increasingly fixated on making that move as Democratic congressional leaders deny his request for $5.7 billion to build the barrier. Trump and Congress agreed to reopen the government for three weeks on Friday, without money for the wall, after a 35-day partial shutdown. CNBC
-The five-week partial shutdown of the U.S. government will ultimately cost the world’s biggest economy just $3 billion, though the closure had indirect effects that are tough to measure, the Congressional Budget Office said. The impasse delayed about $18 billion in federal discretionary spending, the non-partisan arm of Congress said Monday in a report on the shutdown. As a result, the annualized rate of fourth-quarter gross domestic product growth is expected to be 0.2 percentage point lower than anticipated, while expansion in the first three months of the year will be 0.4 percentage point weaker, it said. However, the CBO said most of the lost output “will eventually be recovered,” with second-quarter growth expected to bounce back.
The net drop in GDP for the calendar year will amount to $3 billion, or 0.02 percent of annual output, the agency said. The agency cautioned, however, that its estimates “do not incorporate other, more indirect negative effects of the shutdown, which are more difficult to quantify but were probably becoming more significant as it continued.” That includes businesses that couldn’t get permits or loans, factors that “were probably beginning to lead firms to postpone investment and hiring decisions,” the CBO said. President Donald Trump on Friday agreed to legislation reopening the government, ending the partial shutdown that began Dec. 22, when he and congressional Democrats clashed over the president’s demand to build a wall along the Mexican border. Bloomberg
-The CBO thinks the Fed is going to raise interest rates this year, disagreeing with Wall Street. The Congressional Budget Office in a report Monday said it expects the Federal Reserve to raise interest rates this year. While the report did not indicate how many increases it sees, forecasters noted the need to control inflation as the economy runs faster than its potential. CNBC
-Nvidia tanked 14% after the chipmaker cut guidance, citing ‘deteriorating’ economic conditions in China. The warning adds Nvidia to a growing list of U.S. companies facing revenue challenges in China. The company reports earnings on Feb. 14, and now expects quarterly revenue of $2.20 billion, down from previously stated guidance of $2.70 billion. The company also pointed to headwinds in gaming and datacenters. CNBC
–PG&E Corp. and its Pacific Gas & Electric Co. utility filed for Chapter 11 bankruptcy in a defensive maneuver that sets the stage for a major restructuring of California’s largest utility. The shares rose. A series of wildfires that killed more than 100 people and scorched hundreds of thousands of acres in California over two years brought the utility to its knees. Since the November Camp Fire, the deadliest in state history, about three-quarters of PG&E’s market value has disappeared, its chief executive officer has left, its bonds have plunged and estimates of its liabilities have swelled to more than $30 billion. The filing, which listed $51.7 billion in total debts and $71.4 billion in assets. allows the company to keep operating while it works out a plan to turn the business around and pay off creditors. A bankruptcy, and potentially a sale, may represent the best way for lawmakers and regulators to “remake the public face of the company for customers,” said Katie Bays, a Washington-based analyst at Height Securities LLC. Bloomberg
-Iran general says Tehran aims to wipe Israel off the ‘global political map.’ Revolutionary Guard deputy leader Hossein Salami warns Israel that any war it starts ‘will end with its elimination.’ The deputy head of Iran’s Islamic Revolutionary Guard Corps said Monday that Tehran’s strategy was to eventually wipe Israel off the “global political map.” Asked by a reporter in Tehran about Israeli threats to strike Iranian forces deployed in Syria, Brig. Gen.
Hossein Salami was quoted by Iranian news outlets as saying, “Our strategy is to erase Israel from the global political map. And it seems that, considering the evil that Israel is doing, it is bringing itself closer to that.” He added: “We announce that if Israel does anything to start a new war, it will obviously be the war that will end with its elimination, and the occupied territories will be returned. The Israelis will not have even a cemetery in Palestine to bury their own corpses.” Salami’s comments followed a series of reciprocal taunts by Israeli and Iranian leaders in recent weeks as tensions have risen on the Israeli-Syrian border between IDF and Iranian forces. Read more here-http://bit.ly/2Uty9Jj
-The director of national intelligence briefed senators Tuesday on the many rising threats to the US-led global order. The intelligence community concluded the US’s foremost threats are election interference, cyber attacks and espionage. Other threats, including North Korea’s stalled denuclearization and the potential resurgence ISIS, directly contradict President Donald Trump’s public statements. The report also shows how the administration’s tendency towards isolationism may be forcing allies and partners closer to Russia and China. Businessinsider
-China just tested the world’s most powerful naval gun, and US intelligence says it will be ready for warfare by 2025. China tested the world’s most powerful naval gun earlier this month and it’s expected to enter China’s arsenal by 2025, according to sources with direct knowledge of a U.S. intelligence report. The warship-mounted electromagnetic railgun was first seen in 2011 and underwent testing in 2014. The Chinese are expected to complete at-sea testing by 2023. CNBC
-American Navy vessels sailed through the disputed Taiwan Strait, the U.S.’s first known show of force in the area since November. The warships sailed north through the strait on Jan. 24, Taiwan’s Ministry of National Defense said in a statement on Thursday. It’s the U.S. Navy’s fourth passage since July last year, the island’s Central News Agency reported. An October sail-by prompted China to “express concern” to the U.S. Chinese aircraft, including H-6 bombers and KJ-500 airborne early warning and control systems, also flew from the mainland Thursday through the Bashi Channel for far-sea training before returning to their base via the same route, Taiwan’s defense ministry said. Bloomberg
-Private company launches “largest fleet of satellites in human history” to photograph Earth. A private company has set off a revolution in space by launching hundreds of small satellites, enough to photograph the entire landmass of the Earth every day. Read more here-https://cbsn.ws/2HALUEi
-Polar Vortex Triggering Coldest Arctic Outbreak in at Least Two Decades This Week in Parts of the Midwest. Read more here-https://wxch.nl/2S6ERHJ
-How cold is Chicago this week? Almost too cold to get a pizza delivered. Mike Boren, a 28-year-old driver for Dante’s Pizzeria, wore three pairs of socks on Tuesday and still struggled to say warm. The three-store chain said it will be closed Wednesday in response to extreme cold sweeping the region. “It’s not pleasant,” he said. “There’s a lot of stomping in the snow.” Bitter cold is taking hold across the upper Midwest to the Northeast, prompting warnings to stay indoors. The National Weather service said the temperature in Chicago dropped on Wednesday morning to minus 19 degrees, breaking the previous record low for the day set in 1966. And it could get colder still: Temperatures are forecast to undercut those in the Arctic Circle on Wednesday night. Bloomberg
-Rams top Patriots in Madden NFL 19 simulation.The Los Angeles Rams are a slight underdog against the New England Patriots in Sunday’s Super Bowl. But EA Sports begs to differ. In the video game maker’s simulation of the NFL’s championship game on “Madden NFL 19,” the Rams defeated the Patriots 30-27. All-Pro defensive tackle Aaron Donald was named the Most Valuable Player for his four-sack performance. Tom Brady led the Patriots to a 17-3 halftime lead, but the Rams rallied in the second half and won the game on Todd Gurley’s 5-yard touchdown run. TSN
-According to Sports Illustrated, that 78 percent of NFL players go bankrupt or experience severe financial stress within two years of retirement. Reuters
-How a retired couple found lottery odds in their favor. It was completely legal and it won them millions. Jon Wertheim reports on how Jerry Selbee and his wife Marge used “basic arithmetic” to crack the code on certain lottery games. Read more here-https://cbsn.ws/2HDdFfu
-Mouawad has just completed the crafting of a yellow rough yielding an extraordinary polished 54.21 carat round brilliant cut, fancy vivid yellow, the largest ever graded to date by the Gemological Institute of America. The diamond was named the Mouawad Dragon as its color is reminiscent of the Dragon’s magical powers and fiery eye, as per an official release. As per the release, like the ancient tales surrounding the dragon and its magic, the diamond’s story began very long ago. In the earth’s upper mantle, a precise combination of extreme heat and pressure provided the circumstances necessary for the diamond’s birth. After the mineral formed, it undertook a tumultuous journey through the earth’s crust, forced upwards against unimaginable odds through volcanic conduits and pipes.
Most diamonds fracture or crumble under the tremendous stress only the strongest survive. According to the release, once the rough emerged onto earth’s surface, the rough crystal found its way into the hands of Mouawad’s master cutters, who transformed it into the sparkling 54.21 carat gem it is today. The unique striking final form of the Mouawad Dragon is a testament to both the confidence of Mouawad’s finest cutters and the innate strength of its hue. With vibrant color beaming from every facet, the Mouawad Dragon showcases the power, wisdom, and good fortune of the mystical serpent. As per the release, the Mouawad Dragon stone was discovered in the ancient alluvial deposits in South Africa.
Historically, that area is known to have produced some of the largest yellow diamonds ever discovered. Diamonds with color intensity such as that of the Mouawad Dragon have long been prized by collectors and gem enthusiasts. According to the release, the planning and cutting of the Mouawad Dragon took over six months to complete. The Fancy Vivid color grading of the Mouawad Dragon makes it the most desirable and rare color on the yellow diamond spectrum. Truly a sight to behold, the Mouawad Dragon is considered to be one of the most revered colored diamonds of all time. Read more here-http://bit.ly/2Wq8wuJ
-Rio Tinto’s Argyle Pink Diamonds Tender delivers record results for pink, red and violet diamonds. Rio Tinto’s 2018 Argyle Pink Diamonds Tender collection of 63 rare pink, red and violet diamonds from its Argyle mine in Australia has delivered another record result reflecting strong global demand for fancy coloured diamonds. These results are also a reflection of Argyle approaching the end of its mine life, with the supply of these extremely rare diamonds becoming even scarcer. The 2018 collection of the finest pink, red and violet diamonds from the iconic Western Australian mine continued its trajectory of double-digit price growth.
Sold to an undisclosed buyer, Lot Number 1, the Argyle Muse™, a 2.28 carat Fancy Purplish Red diamond is the most valuable diamond in the Tender’s 34-year history. Amongst the record-breaking diamonds sold in the 2018 collection was Lot 2, the Argyle Alpha™, the largest and most valuable Vivid Pink diamond in the history of the Argyle Pink Diamonds Tender. The Argyle Alpha™ was won by Singapore based Argyle Pink Diamonds partner Glajz THG. Managing director John Glajz said “I am honoured to be custodian of this record-breaking gem, a diamond that embodies the rarity, beauty and provenance of Argyle pink diamonds.”
Over the past 18 years the value of Argyle pink diamonds sold at Tender have appreciated over 400 per cent, outperforming all major equity markets. Rio Tinto Copper & Diamonds chief executive Arnaud Soirat said “The 2018 Argyle Pink Diamonds Tender was highly sought after with record results that underscore the value of these gems in the history of rare coloured diamonds.” Matthew Aldridge, chief executive of Gemcut Geneva, a successful bidder on a number of diamonds in the 2018 Tender including Lot 5, the Argyle Odyssey™, a 2.08 carat Fancy Intense Pink diamond said “I have been bidding at the Argyle Pink Diamonds Tender since 1987 and continue to be amazed by the magnificent potency of colour of these unique diamonds from this extraordinary mine.
As an avid collector of the world’s finest fancy coloured diamonds I was especially delighted to win the Argyle Odyssey™, a match for another diamond that was sold in the Tender over fifteen years ago.” Almost the entire world supply of rare pink, red and violet diamonds come from Rio Tinto’s Argyle diamond mine in the remote east Kimberley region of Western Australia. Current estimates indicate sufficient economic reserves at the mine to support production through to the end of 2020. Read more here-http://bit.ly/2z6xh5a
-From a Hockney painting to Marie Antoinette’s pearl, here are 4 record-breaking collectibles auctioned in the last month. It marks a year since Leonardo da Vinci’s “Salvator Mundi” became the most expensive painting ever sold, fetching over $450 million at Christie’s auction house in New York City. The 500-year-old oil on panel depicts Jesus Christ in robes holding a crystal orb in his left hand. Also called “Savior of the World,” the piece was “painted in the same time frame as the ‘Mona Lisa,’ and they bear a patent compositional likeness,” said Loic Gouzer, chairman of Christie’s postwar and contemporary art department, last year.
David Hockney’s ‘Portrait of an Artist’ sells for $90 million. “Portrait of an Artist (Pool with Two Figures)” was auctioned Thursday at Christie’s Postwar and Contemporary Art Evening Sale in New York City for a record-breaking $90,312,500, making it the most expensive work by a living artist sold at auction. The previous record was set by Jeff Koons’ “Balloon Dog” in 2013.
‘The Pink Legacy’ sells for $50 million. At just under 19 carats, the super rare fancy vivid pink diamond named “The Pink Legacy” was sold for $50,375,000 at Christie’s Magnificent Jewels auction in Geneva on Tuesday. It was bought by prestige jeweler Harry Winston (owned by Swatch Group), who immediately renamed it “The Winston Pink Legacy.” Only 100,000 diamonds possess a color deep enough to qualify as “fancy vivid,” and “fancy pink vivid” diamonds are rarely larger than five or six carats, according to Christie’s. The diamond breaks the world record for the price per carat of any pink diamond, at $2,175,519 per carat.
Queen Marie Antoinette’s pearl sells for $36.1 million. Actually a diamond and pearl pendant, “The Queen Marie Antoinette’s Pearl” sold on Wednesday for a hammer price of $32 million, but a buyer’s premium and fees increased the total sale to over $36,427,000, according to the auction house Sotheby’s. The 18th century pearl now the most expensive pearl ever sold at auction was part of a collection of 10 pieces once owned by the French queen and held by the Bourbon-Parma family for generations. Some of the jewelry hadn’t been seen in public for 200 years.
Edward Hopper’s ‘Chop Suey’ sells for $91.9 million. The 1929 work by American realist Edward Hopper sold at a Christie’s auction on Tuesday for $91,875,000, making it the world’s most expensive piece of pre-war American art. “Chop Suey, the most iconic painting by Hopper epitomizes the psychological complexity for which his work is celebrated, freezing in place an everyday scene from an America that was changing rapidly,” a statement from Christie’s said. Read more here-https://abcn.ws/2QsC0sr
-Patek Ref. 2499 Triumphs: Sotheby’s sells one for $3.9-million, Christie’s another for $3.2-million. The hero of the Geneva fall watch auctions was a rare Patek Philippe reference, two examples of which remarkably turned up in two sales a day apart this week in Geneva. A yellow gold Patek Philippe Ref. 2499 perpetual calendar chronograph sold at Sotheby’s on Tuesday for $3,915,000, the highest price paid for a watch at auction this year. A day earlier, Christie’s sold another yellow gold Ref. 2499 for $3,234,905. Read more here-http://bit.ly/2K5DmTo
-Rare Ferrari 250 GTO Sells for Record $48.4 Million at Auction. A red 1962 Ferrari 250 GTO sold for $48.4 million on Saturday in California, the most ever paid for a classic car at auction. The vehicle was offered by RM Sotheby’s in Monterey, and was estimated to fetch between $45 million and $60 million, the highest valuation ever for a vintage auto at auction. It smashed the previous record of $38.1 million paid for a 1963 model of the same car in 2014. The seller was Greg Whitten, chairman of Numerix Software Ltd. and an early Microsoft Corp. employee, who purchased it in 2000.
Sotheby’s declined to say how much he bought it for, but said the market price for such Ferraris at the time was about $10 million. Ferrari built just 36 examples of the model from 1953 to 1964, and these elegant race cars have generated the highest prices among all vintage automobiles in recent years. A 1963 version sold for $70 million in a private transaction earlier this year, according to Sotheby’s. The record price includes the buyer’s premium based on the hammer price of $44 million, calculated at 12 percent on the first $250,000 and 10 percent on the remainder. Bloomberg
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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
-LBMA: 2019 Precious Metals Forecast Survey. Read more here-http://bit.ly/2MH9MFh
-After long slump, ‘this could be gold’s year.’ Gold was stuck in a rut before it began to move up last fall, and it’s now back at $1,300 per ounce for the first time in eight months. Some analysts say gold can now head to $1,400 per ounce by the end of the year. Buying by scared investors, central banks and Asian jewelry buyers are helping lift prices. Read more here-https://cnb.cx/2Si5ARE
-Alasdair Macleod: Ten Factors To Look For In Gold In 2019. Factors directly affecting gold. Read more here-http://bit.ly/2G9rekx
- Geopolitics Asia, and Russia publicly, have swapped reserve dollars for gold. Given Russia is the world’s largest energy exporter, she will continue to have dollars to sell for gold. Also, Central Europeans, notably Hungary and Poland, are accumulating gold reserves. It is clear which way the Asian wind is blowing, and the Asians know gold is America’s weak point.
- Price inflation has been badly misrepresented by CPI figures and have been averaging closer to about 8% annually since gold topped in Sept 2011. Since then the purchasing power of the dollar has declined by about 43%, so that in 2011 dollars the gold price is $740. No one seems to have noticed, leaving gold extremely cheap.
- Monetary inflation post-Lehman crisis has not been fully absorbed. FMQ is still over $5tn above the pre-Lehman long-term expansion trend, and the Fed is unable to bring it down. Rather, they are likely to increase the fiat money quantity to save the government from having to borrow at market rates as the recession bites.
- These are exactly the conditions faced by the German government between 1918 and 1923, and the likely response by the Fed will be the same. Print money to fund government deficits. Result, wealth transferred from the productive economy to be destroyed in government spending. The only difference is US and other welfare states have a stronger tax base than post-war Germany, so the rate of monetary expansion relative to the size of the economy will be less. Nevertheless, we are on the slippery slope to currency destruction and it will take much more political courage to address the inflation issue than the current political class appear to be capable of.
- Gold is massively under-owned in the west.
-Venezuela Has 20 Tons of Gold Ready to Ship. Address Unknown. Venezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank. The claim set off a welter of social media speculation and outrage. When asked how he knew this, Guerra provided no evidence. Just another outlandish comment from a lawmaker trying to draw attention to the plight of crisis-torn Venezuela? Perhaps not. For one thing, Guerra is a former central bank economist who remains in touch with old colleagues there.
For another, a person with direct knowledge of the matter told Bloomberg News Tuesday that 20 tons of gold have been set aside in the central bank for loading. Worth some $840 million, the gold represents about 20 percent of its holdings of the metal in Venezuela, the person said. He provided no further information on plans for those bars. With strongman President Nicolas Maduro losing control of the country’s already-scant finances and reserves thanks to U.S. sanctions, who can put his hands on the nation’s estimated 200 tons of gold at home and abroad has become a key question. The nation owes billions to its patrons Russia and China as well as bondholders, and also needs hard currency to buy food for its starving people.
Venezuela has been trying for years to increase its gold reserves by encouraging mining, putting the military in charge of vast territories that yield the precious metal. State gold processor Minerven melts the ore into bars, which military aircraft take to airbases around Caracas. Soldiers regularly unload it into armored vehicles bound for the central bank and beyond. The U.S. has been working to put National Assembly head Juan Guaido, who says he is the nation’s rightful president, in charge of Venezuelan finances and starve the regime. Last week, the Bank of England denied Maduro officials’ request to withdraw $1.2 billion of gold stored there after top U.S. officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, lobbied their U.K. counterparts to cut off the regime from its overseas assets. Bloomberg
-Greg Hunter: John Williams Interview, Fed Will Crash Markets & Dollar, Gold Protects. “This is a very dangerous time both domestically and globally.” Maybe this is why gold and silver prices keep steadily climbing higher. Williams says, “As things get worse here there is going to be a flight from the dollar into other currencies and in particular into gold. Gold is the long-term store of wealth here. Where we are ultimately headed here the precious metals are a long-term store of wealth.
They preserve the purchasing power of your assets if you have high inflation you will still have your purchasing power. With debt collapsing and currencies collapsing you are going to end up with inflation. Expanded debt is rapid money supply growth. It is debasement of the currency and debasement of the currency means inflation. It’s the type of thing that can be accelerated very rapidly if you have another crisis such as a big stock market crash. The economy is tanking and people start fleeing the dollar means you are going to be seeing rising inflation. If you see a big hit on the dollar gasoline prices will go up.” Watch more here-http://bit.ly/2G1OjX4
-Greg Hunter: Chris Martenson interview, Global Collapse Accelerating Buy Gold Now. Central banks cannot stop the money printing without the whole system blowing up. Maybe that is why gold is going up? Martenson says, “I believe it is. I buy gold because gold is the only form of money that is not simultaneously someone else’s liability. We are talking about a world so saddled with debt, I am not sure where all the liabilities lie. I don’t trust the accounting of major corporations. I don’t trust what derivatives will do in a crisis. This is the ‘Everything Bubble.’ What happens when it bursts? We don’t know. So, gold, to me, is the thing I want to own and hold when you have a systemic crisis.” Watch more here-http://bit.ly/2MGzxFL
-Mike Maloney: If You Don’t Think QE4 & QE5 Are Coming, You’re Smoking Something. Mike Maloney reveals some startling information on the increasing number of “Zombie Companies” in the S&P 1500. Find out what kind of threat these walking dead companies pose to the economy, and prepare accordingly. Watch more here-http://bit.ly/2HEjQ31
-Silver Shortage Promises to Boost Price in 2019. Think of it as a potential silver lining for investors. A deepening shortage is promising to help boost prices as haven demand for the precious white metal rebounds in 2019. Silver surged 9.1 percent in December, its biggest monthly gain in almost two years. The commodity has benefited as a persistent trade war, weakening dollar and prospects of slower pace of U.S. rate increases drove haven demand for precious metals. The price outlook is improving at a time when demand for gold’s cheaper cousin is poised to top production for a seventh straight year.
With miners avoiding new projects amid global economic uncertainty, the price could spike as high as $17.50 an ounce from about $15.87 now, according to a Bloomberg survey of 11 traders and analysts. About 26,000 tons of silver is expected to be produced this year, according to estimates by Robin Bhar, a London-based analyst at Societe Generale SA. That would be the least since 2013, and means global physical demand will again top output.
“Supply growth has started to slow, more than for any other precious metal,” said John LaForge, the head of real assets strategy at Wells Fargo Investment Institute. To be sure, a production deficit hasn’t been enough to boost prices in recent years. Silver has traded more like a precious than an industrial metal, which is strongly influenced by supply and demand balances. The price of silver has plunged by almost half since 2012, the last time the market was in surplus. That was faster than the pace of decline for gold, the most heavily traded precious metal. Bloomberg
-James Cook: Silver Update, Don’t Miss What the World Is Missing. Let’s consider some of the many reasons that silver should go up. The fact that JPMorgan has used unsavory tactics to hold the price of this important mineral down has created some powerfully bullish consequences. The historically low price has discouraged mining for silver. Many discoveries have been made that have never been mined because of the low level of profitability. Furthermore, prospecting, drilling and exploring for silver deposits has diminished greatly. A lot less silver has been mined and consequently much less exists above ground. In fact, so little currently exists that a surge of investment buying on top of the existing industrial demand would likely lead to a shortage.
A silver shortage would most certainly lead to a price explosion. That, in turn, would lead to a buying panic among industrial users who must have silver or go out of business. Thousands of companies rely on silver. The low price also nullifies any significant search for alternatives to silver. As the price rises, industrial users won’t have anything cheaper to switch into. Silver deposits are epithermal, which means they are generally deposited near the earth’s surface. The big deposits like Leadville, Cerro Rico de Potosi and the Comstock Lode were on the surface and easily discovered. Most of those big deposits are mined out. Mining companies now have to do more costly deep drilling. Consequently, discoveries tend to be smaller. Almost two-thirds of the silver mined now comes as a by-product to copper, lead, zinc and gold mining. That means the production of silver is price insensitive.
In other words, no matter how high the price of silver, mining companies won’t increase their production of these other metals to get more silver. All these factors will eventually be understood and the silver market will change forever. We’ve always had periods where investors have poured into silver. Inevitably this has caused the price to go through the roof. We are patiently waiting for this event to happen again. When it does, the world’s foremost silver analyst Ted Butler claims that the gains will be huge. We can’t begin to comprehend the small amount of silver available in comparison to the enormous amount of buying power that can be directed into it. According to Mr. Butler, the price rise to come will be written about for centuries. Read more here-http://bit.ly/2DK6IoU