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World Financial Report – February 14th, 2019

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WORLD FINANCIAL REPORT ON RADIO FEBRUARY 14th 2019
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: U.S. National Debt Soars to a Record $22 Trillion. The U.S.’s financial burden is growing despite a strong economy. Total public debt climbed to more than $22 trillion as of Feb. 11, according to a Treasury Department report Tuesday. The country’s obligations are mounting as President Donald Trump debates members of Congress over funds for a wall along the southern border and fiscal experts including former Federal Reserve Chair Alan Greenspan warn about the dangers of rising budget deficits. Bloomberg

-CHART OF THE WEEK: Investors Hedge a Stock Doomsday With Record Fixed-Income Inflows. Investors are amassing an expensive insurance policy against market doomsday. Confident that fragile economies will keep monetary policy makers in dovish straight-jackets, they poured another $490 million into the iShares 20+ Year Treasury Bond ETF last week bringing its year-to-date inflow to a record $2.3 billion. That stocks will suffer as a result of this brittle growth outlook has also helped push three-month trailing inflows into fixed-income ETFs to the highest on record through end-January, according to State Street Global Advisors.

“Fears of worsening economic momentum coupled with geopolitical uncertainties and corporate earnings revisions that appear to have limited upside has triggered a rush for safety,” said Antoine Lesne, head of SPDR ETF Strategy & Research for Europe at State Street Global Advisors. “Fixed income is thus a good place to be relative to higher potential drawdowns in equity portfolio.” After climbing up along with stocks, Treasury yields reversed course mid-January, signalling the bond market is prepping for slower growth and inflation. Bloomberg

-CHART OF THE WEEK: Passive Funds Overtake Stock-Pickers in the U.S. Large-Cap Market. If stock-pickers are becoming an endangered species, this may be the latest sign. Investors now have more money in large-cap equity funds tracking indexes than in actively run funds of the same type. The lines crossed in the fourth quarter, according to data from Morningstar Inc. Passive mutual funds, exchange-traded funds and so-called smart beta funds in the sector held $2.93 trillion in assets as of Dec. 31, compared with $2.84 trillion on the active side. The gap has been narrowing for years as investors pour money into low-fee index funds while higher-cost stock-pickers struggle to consistently beat markets.

Based on the flow trends, passive funds tracking U.S. stocks of all sizes could pass up their active rivals this year. Only 24 percent of all active funds those holding stocks, bonds or real estate outperformed their average passive rival over the 10 years through December, according to a Morningstar analysis of 4,600 U.S. funds with $12.8 trillion. Long-term success rates were generally higher among foreign-stock funds and bond funds and lowest among U.S. large-cap funds, the report by Ben Johnson and Adam McCullough found. The trend probably means fewer jobs for stock-pickers, McCullough said in a telephone interview. “But the net benefit to all investors of more efficient markets and lower costs outweighs the job losses for stock picking.” Bloomberg

-CHART OF THE WEEK: Traders With $515 Billion Boycott Stocks for Cash Despite Rally. Investors with $515 billion surveyed by Bank of America Merrill Lynch aren’t convinced by the new-year equity rally and prefer cash to stocks. Global equity allocations in February fell to the lowest level since September 2016, according to BofA, even as the MSCI All Country World Index is up almost 8 percent in 2019. That indicates a deep lack of conviction in the sustainability of the rebound among traders. The share of investors who believe the S&P 500 Index has peaked at 2,931 jumped to 34 percent this month from just 11 percent in September. Bloomberg

-Investors take biggest cash position in a decade despite market rally. Professional investors took their highest cash positions in 10 years during January after the brutal fourth-quarter sell-off, according to the latest Bank of America Merrill Lynch Fund Mangers Survey. The pessimism was reflected in a belief that the S&P 500 peaked last year at a level 8.2 percent higher than Monday’s close. Such plunges in sentiment are generally considered good buying opportunities. CNBC

-CHART OF THE WEEK: Europe’s Fund Managers May Have Lost $100 Billion in 4th Quarter. Europe’s money managers have been warning for months that the fourth quarter was bad for them. How bad? One estimate puts it at $100 billion. That’s the amount of client money that Europe’s open-ended funds lost in the final three months of 2018 as markets whipsawed, according to Amundi SA. The French company alone saw outflows of $7.4 billion in that period amid an “extremely hostile” market, Chief Executive Officer Yves Perrier said on Wednesday. Other European companies have reported similar outflows. Bloomberg

-CHART OF THE WEEK: As Fed Nears End of the Hiking Cycle, It Faces a Hard Reality. The Federal Reserve’s recent turn toward patience on further rate hikes underlines an unfortunate reality: the central bank will have way less ammunition to fight the next recession than it had in the past. “The apparent change in monetary policy strategy led some observers to ask whether the Fed is overreacting to recent market volatility,” Tiffany Wilding at Pacific Investment Management Co. LLC wrote in a blog post. “Many Fed officials now see a good chance that the current range of the fed funds rate (2.25 percent to 2.5 percent) is the terminal level of this cycle a level notably lower than most of them had previously expected.”

On one hand, the Fed is comparatively well-positioned for a downturn. Officials have lifted rates off of zero, unlike their counterparts in Europe and Japan, so they have room to cut them to boost lending. They’ve also shrunk their swollen balance sheet and have more space to pursue large-scale bond buying if the economy should really slump. Yet the fact that interest rates are likely to linger at a stopping point well below the historical norm whether that’s the current setting or slightly higher means that the central bank will have less room to ease policy to boost growth. Bloomberg

-CHART OF THE WEEK: Best U.S. Job Numbers Ever? Not If You’re Out of Work for a Year. President Donald Trump said in his State of the Union speech last week that the labor market’s strength is evidence of an “unprecedented economic boom,” adding to his frequent boasts that include a tweet about the “best jobs numbers” in U.S. history. Yet by one key measure, far from a boom, the labor market hasn’t even returned to a normal state. Over the past 12 months, the share of unemployed people out of work for 52 weeks or longer has averaged 13.2 percent higher than at almost any point in data from 1976 to 2008. While the figure is down from a record 31.4 percent in 2011, it topped out at 12.8 percent in the 1990s and 2000s expansions during the presidencies of Bill Clinton and George W. Bush. In fact, during those years, it fell as low as 5.9 percent, meaning that within the pool of unemployed, people took less time to find a job. Bloomberg

-CHART OF THE WEEK: U.S. Home-Price Gains Slow in Fourth Quarter as Inventory Jumps. Home-price gains in the U.S. slowed in the fourth quarter as more listings flooded onto the market. The median price for an existing single-family home was $257,600, up 4 percent from a year earlier, the National Association of Realtors said in a report Tuesday. In the third quarter of 2018, prices rose 4.8 percent annually. Home sales have slumped after a jump in mortgage rates added to an affordability crunch that built up after years of rapidly rising prices.

About 1.55 million homes were available for sale at the end of December, up 6.2 percent from 2017. “Home prices continued to rise in the vast majority of markets,” Lawrence Yun, chief economist for the Realtors group, said in the report. “But with inventory steadily increasing, home prices are, on average, rising at a slower and healthier pace.” While prices rose in 92 percent of markets last quarter, only 14 of the 178 metropolitan areas tracked in the report showed double-digit increases, down from 18 in the third quarter. Purchases of previously owned homes declined in all four regions of the country, with the biggest plunge in the West, where transactions slid 14 percent from a year earlier, the group said. Bloomberg

-CHART OF THE WEEK: Euro Industry Posts Biggest Annual Slump Since Financial Crisis. Euro-area industrial production fell more than twice as much as forecast in December, raising further questions over the state of the bloc’s economy. The 0.9 percent drop more than twice the 0.4 percent forecast was driven by declines in capital and non-durable consumer goods production. From a year earlier, output plunged the most since 2009, when the economy was dealing with the fallout from the financial crisis.

Disappointing news has piled up since the European Central Bank decided to halt asset purchases last year. Policy makers have kept a brave face, arguing that the 19-nation region is merely going through a phase of weaker growth amplified by a spate of temporary factors and external threats and there’s no risk of falling into a recession. Still, companies are turning pessimistic. GEA Group, a German manufacturer, issued a profit warning last week, Leoni AG suspended dividend payments for 2018 after earnings declined more than expected, and Daimler AG is preparing a “comprehensive” cost-cutting program as the automaker fights through a U.S.-China trade spat. Bloomberg

-CHART OF THE WEEK: Americans’ Confidence in Their Finances Keeps Growing. Americans’ optimism about their personal finances has climbed to levels not seen in more than 16 years, with 69% now saying they expect to be financially better off “at this time next year.” The 69% saying they expect to be better off is only two percentage points below the all-time high of 71%, recorded in March 1998 at a time when the nation’s economic boom was producing strong economic growth combined with the lowest inflation and unemployment rates in decades. Americans are typically less positive about how their finances have changed over the past year than about where they’re headed, and that remains the case.

Fifty percent say they are better off today than they were a year ago. That 50% still represents a post-recession milestone the first time since 2007 that at least half of the public has said they are financially better off than a year ago. Ten years ago, as the Great Recession neared its end, the percentage saying their finances had improved from the previous year was at a record low of 23%. More than half the public, 54%, said they were worse off. Now, with unemployment below 1998 levels and the job market growing steadily, the number saying they are worse off than a year ago has dropped to 26%, the lowest level since October 2000. Gallup

-Possible independent presidential candidate and Democratic spoiler Howard Schultz on Tuesday dumped on Rep. Alexandria Ocasio-Cortez’ “Green New Deal,” warning it would be “immoral” to spend trillions of dollars on an “unrealistic” solution. The billionaire former Starbucks CEO and executive chairman urged Democrats to be “truthful” about their environmental initiatives rather than just throwing policies “against the wall because it’s a good slogan.”

“I read that by 2030 they’re suggesting that every building in America becomes clean energy, conforms to clean energy, just to put that in perspective, because it’s not realistic, that would mean that between 2,000 and 3,000 buildings a day would have to be reconstructed to conform to what they’re saying,” Schultz said. “So let’s be sensible about what we’re suggesting,” “I don’t understand how you’re going to give a job for everybody, how you’re going to give free college to everybody, how you’re going to create clean energy throughout the country in every building of the land,” he said. “I think it’s immoral to suggest that we can tally up $20, $30, $40, $50 trillion of debt to solve a problem that could be solved in a different way.” Schultz also scrutinized talk among Democrats about hiking the marginal tax rate on the country’s richest people to 70 percent as “punitive.” Read more here-https://washex.am/2E9OzRQ

-The International Monetary Fund on Sunday warned governments to gear up for a possible economic storm as growth undershoots expectations. “The bottom-line we see an economy that is growing more slowly than we had anticipated,” IMF Managing Director Christine Lagarde told the World Government Summit in Dubai. Last month, the IMF lowered its global economic growth forecast for this year from 3.7 percent to 3.5 percent. Lagarde cited what she called “four clouds” as the main factors undermining the global economy and warned that a “storm” might strike.

The risks include “trade tensions and tariff escalations, financial tightening, uncertainty related to (the) Brexit outcome and spillover impact and an accelerated slowdown of the Chinese economy”, she said. Lagarde said trade tensions mainly in the shape of a tariff spat between the United States and China, the world’s two biggest economies are already having a global impact. “We have no idea how it is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets,” she said, warning governments to avoid protectionism. Lagarde also pointed to the risks posed by rising borrowing costs within a context of “heavy debt” racked up by governments, firms and households. “When there are too many clouds, it takes one lightning (bolt) to start the storm,” she said. Read more here-https://yhoo.it/2ByDw2O

-Kyle Bass, founder of Hayman Capital Management, said the U.S. most likely will enter a mild recession by the middle of 2020 as the bounce from fiscal stimulus wanes. The hedge fund manager said it’s unlikely that Democrats, who control the House, will let the Trump administration further stimulate the economy. And the Federal Reserve, which was late in the cycle on raising interest rates, won’t be much help either. “So when we get into even a small recession I don’t think we have the arrows in the quiver,” Bass said Monday in a Bloomberg TV interview with Scarlet Fu. He added that the U.S. stock market will be lower at the end of the year that it is today. Bloomberg

-Nobel laureate Paul Krugman said the U.S. economy may be heading into a recession at a time when the Federal Reserve doesn’t have the firepower to properly combat a slump. “There seems to be an accumulation of smaller problems and the underlying backdrop is that we have no good policy response,” he said in a Bloomberg Television interview in Dubai. The headwinds facing the economy prompted the Federal Reserve this month to halt its interest-rate hiking cycle, which Krugman said was never “grounded in the data” to begin with. “Continuing to raise rates was really looking like a bad idea,” he added. Krugman isn’t alone in seeing a gloomy outlook for the world’s biggest economy.

U.S. chief financial officers in a Duke University survey published in December overwhelmingly said they expect a recession within two years. “I wouldn’t be as definitive, but it seems pretty likely,” Krugman said. While Krugman doesn’t expect a crisis of the magnitude of 2008, he said policy makers in Washington would struggle to contain large shocks. The economist, a vocal critic of the Trump administration, said it was hard to see the U.S. leadership “respond in any kind of a nimble way.” “We’re clearly in worse shape,” he said, citing lower public debt in 2008 and “lots of room” to lower interest rates back then. “And we came into the last crisis with pretty remarkable leadership.” “Let’s put it this way, our current Treasury Secretary is no Hank Paulson,” he said. Bloomberg

-Recession risk is real, according to Nobel laureate Robert Shiller, and one might come as soon as this year. Whether the U.S. will experience a contraction has become one of the hottest debated topics among investors amid uncertainty surrounding U.S.-China trade talks, deteriorating earnings forecasts and slowing growth around the globe. The ambiguity caused the almost decade long rally in U.S. stocks to come within a whisker of its end in December.

“It seems like there has to be an elevated probability of a recession this year or next year,” the Yale University economics professor said during a panel discussion at the InsideETFs conference in Hollywood, Florida. “There are these signs that show people are worried. It’s also the longest bull market in the stock market,” he said. “There’s a spirit of thinking it aught to come to an end soon.” The chance of a recession happening over the next 12 months is 25 percent, according to economists surveyed by Bloomberg. Federal Reserve Chairman Jerome Powell said Tuesday in Mississippi that “we don’t feel the probability of recession is at all elevated.” Bloomberg

-Sears is saved. For now. The retailer is emerging from bankruptcy a smaller and financially healthier company. But it’s not clear whether Sears will enjoy a second life, or if a second bankruptcy and permanent closure looms in its future. The retail graveyard is full of companies like RadioShack and Gymboree that emerged from bankruptcy and then filed for a second time in relatively short order. The company said in bankruptcy court it expects to raise at least $650 million from real estate sales in the next three years. CNNMoney

-Bill Gates: Taxing the rich is fine, but ‘extreme’ politicians like Alexandria Ocasio-Cortez are missing the point by focusing on income. In an interview with The Verge, Microsoft founder Bill Gates says he supports “more progressive” taxes on the rich, but proposals targeting high income brackets, like a plan from Rep. Alexandria Ocasio-Cortez, are missing the point. Ocasio-Cortez, a Democratic socialist, has proposed a 70 percent marginal rate on income over $10 million. Gates says tax policies should focus on taxing wealth rather than income since the super rich tend to have more of their wealth tied up in assets instead of income. CNBC

-Veteran hedge fund manager Mark Yusko is deeply skeptical of the stock buyback boom set off by President Donald Trump’s tax overhaul. “I call it the tax deform bill. It was just a free handout to rich people who pay a lot of money to lobbies,” Yusko, the founder and CEO of Morgan Creek Capital, told CNN Business. Instead of using its tax savings to speed up the economy, Corporate America is just “buying back stock to stimulate their stock price,” Yusko said from the sidelines of the Cayman Alternative Investment Summit.

Yusko noted that prior to 1982, share buybacks were outlawed by the SEC. “I think they should still be deemed insider trading and illegal,” he said. Share buybacks are a common practice where companies repurchase their own shares as a way to return excess capital. Buybacks boost demand for shares and artificially inflate per-share earnings. US companies announced a record-shattering $1 trillion worth of share buybacks in 2018, the first full year since the tax law took effect, according to TrimTabs Investment Research. After perking up in the first quarter of 2018, business investment on job-creating items like factories and equipment decelerated. CNNMoney

-Rubio attack on buybacks sends shudder down Wall Street as a Republican joins Democrats’ fight. Florida Republican Sen. Marco Rubio joined a chorus of Democratic voices in his objection to the corporate use of cash for stock buybacks. Rubio backed a plan unveiled Tuesday that proposes changing the way buybacks are taxed as a way to discourage companies from pursuing them. Strategists say that Rubio’s entry into the fight does not signal a bi-partisan war on the stock market in the upcoming election, but one said it’s “disconcerting” and “it’s one thing to have the far left suggesting some of these things, but if you start to get the right wing doing it, it’s a little bit of a game changer.” CNBC

-Warren Buffett: ‘Don’t ask the barber whether you need a haircut.’ Warren Buffett doesn’t trust forecasts or projections, especially from someone who has a financial interest in making those projections. “I do not understand why any buyer of a business looks at a bunch of projections put together by a seller or his agent,” he said. CNBC

-An ‘earnings recession’ has arrived, and the market’s not ready for it, Morgan Stanley says. Morgan Stanley equity chief Mike Wilson, who first predicted a contraction in earnings growth in 2018, lowers his 2019 S&P 500 EPS target to 1 percent from 4.3 percent. “We are increasingly convinced that consensus earnings expectations for 2019 have further to fall,” Wilson writes in a note to clients. A host of market data researchers including FactSet and S&P predict a decline in S&P 500 earnings in the first quarter of 2019. Wilson was the most accurate Wall Street strategist tracked by CNBC in 2018 and has issued a streak of bearish calls about the S&P 500 and earnings performance. CNBC

-A record number of Americans are 90 days behind on their car payments. More than 7 million Americans are at least 90 days behind on their auto loans, according to the New York Fed. That’s higher than the peak in 2010 as the country was still reeling from the devastating financial crisis. The numbers suggest “that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector,” Fed economists said. CNBC

-iPhone shipments crashed nearly 20% in China because Apple charges too much: IDC. Apple iPhone shipments fell 19.9 percent in China during Q4 2018, or Apple’s fiscal Q1, according to IDC. IDC blamed the high cost of the iPhone and perceived lack of innovation for Apple’s struggling shipments. Apple reported a 27 percent decline in revenue from China late last month. CNBC

-Joaquin “El Chapo” Guzman, the Mexican found guilty in a U.S. court on Tuesday of running a criminal enterprise that smuggled drugs into the United States, is likely headed to a “supermax” prison where repeating his past escapes would be nearly impossible. Read more here-https://reut.rs/2DBsnhX

-Byron Christopher: Life in the Supermax. Here is a true-life account of life in one of the world’s toughest prisons Florence ADX, Colorado, USA the Supermax. The ultra-secure penitentiary is home to the baddest Unabomber Ted Kaczynski, shoe bomber Richard Reid, Mafia dons, drug cartel bosses and escape artist Richard Lee McNair. Read more here-http://bit.ly/2GGV6VE

-Colorado legal pot industry sales grew 3 percent in 2018, top $6 billion since recreational use began. Colorado’s regulated pot industry sales have topped $6 billion since legal recreational marijuana sales began and taxes generated by the industry grew by nearly 8 percent last year, the state reported Tuesday. Regulated marijuana sales in 2018 were nearly $1.55 billion, up about 3 percent from a year earlier. The growth of Colorado’s legal marijuana economy contrasts with a slow start in California’s regulated pot market, which began recreational sales in January 2018. CNBC

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RARECOLOREDDIAMONDS.COM

-Alrosa exhibits largest pink diamond ever found in Russia. Russia’s Alrosa, the world’s top diamond producer by output in carats, has put together a collection of recently found large coloured diamonds, which includes a pink oval gem weighing 14.83 carats the largest of its kind ever found in Russia. The diamond it was cut from a rough found in 2017 at the Ebelyakh deposit in Yakutia, rated by The National Jeweler as the best discovery of the year. Before it was mined, ALROSA’s largest pink gem had weighed 3.86 carats. “Pink diamonds among the blue ones are considered to be the rarest and most precious of all, and the size and clarity of this specimen makes it one of the best to be discovered anywhere in the world in recent years,” Alrosa’s chief executive Yury Okoyemovsaid in a statement.

“I am sure that this diamond will be the most expensive in the history of Russia’s gem cutting industry.” The largest stone in the group, however, was a deep yellow asscher cut diamond, weighing 20.69 carats. It was cut from a raw crystal with a rare honey hue, which weighed 34.17 carats, also mined in 2017. Other diamonds in the collection include a pink-purple cushion-shaped stone, weighing 11.06 carats, recognized by the GIA (the Gemological Institute of America) as the largest of its colour in the world. In the last year, Alrosa has worked on boosting revenue from selling rare, coloured diamonds where demand is stable, although it is a niche business. According to market analysts, the average price for pink, yellow, blue and green stones has risen consistently by 12% a year over the last few decades, driven by consumers passion for something exotic and unusual.

This means they are less affected by other factors driving general diamonds’ supply and demand. Currently, the global market for polished coloured diamonds is now dominated by Rio Tinto and Anglo American’s De Beers. But state-controlled Alrosa aims to compete. “The diamonds we are now exhibiting are completely unique, and each of them perfectly embodies the Russian art of gem cutting,” Okoyemov said. “We calculate that the huge potential of our coloured diamonds will very soon enable Alrosa to become the world’s leader in that market.” The company noted its pink and yellow diamonds will be soon transferred to the GIA for certification. Read more here-http://bit.ly/2DBexvP

-Good Diamonds Are Hard to Find at World’s Richest Gem Mine. The Letseng diamond mine in Lesotho is renowned for unearthing some of the world’s most valuable gems, but it didn’t find many last quarter. The average price of diamonds found was just $1,259 per carat in the fourth quarter, almost half the value for the full year, according to Gem Diamonds Ltd., which runs the mine. While that’s still the highest in the industry, it shows that the mine had a significant drop in finding the most precious stones. Producing diamonds that are profitable to mine is a problem throughout the industry. Prices for the smallest and cheapest gems are falling because of too much supply and that’s shrinking profits for mining companies.

At the same time, several producers from Petra Diamonds Ltd. to Mountain Province Diamonds Inc. are finding stones worth less than they expected. Gem shares slid 2.8 percent to 105.50 pence in London trading after the results. In the company’s most recent tender, the average price was back above $2,000, showing the drop in price was from finding smaller diamonds. The bad news comes after a strong year for Gem. After struggling with failed growth plans and problems recovering big diamonds without breaking them, it successfully unearthed a record number of 100-carat-plus stones in 2018. That included the 910-carat Lesotho Legend found in January 2018 that was the fifth-biggest in history and sold for $40 million at a tender in Antwerp. Bloomberg

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GOLD-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

-Jim Cook: Ted Butler Interview on Silver. Theodore Butler writes a $400 newsletter on silver. He is considered by many to be the world’s foremost authority on silver. Eighteen years ago he predicted that silver would go up ten times, which it did. We caught up with him at his home in Florida. Read more here-http://bit.ly/2SuuZZl

Q: As the world’s leading silver bull, are you expecting fireworks in silver?
A: More so than ever.

Q: You know of course that a lot of people who own silver have grown impatient. What do you say to them?
A: I feel the same impatience, however my expectations are based upon an extremely bullish set of facts. Impatience has nothing to do with it.

Q: How do you arrive at your bullish facts?
A: I study the Commitment of Traders and Bank Participation reports and numerous other statistics, trends and reports. There are any number of bullish arguments for why silver is a great buy right now.

Q: What are some of those bullish arguments?
A: Silver has never been more necessary. It is a vital component of just about every modern product. Production of silver has been flat for years. Quite simply, there will not be enough silver to go around and price rationing will be required.

Q: Anything else?
A: What makes the case for buying silver so compelling is the current low price. If silver was priced at $30 or $50 or $100 an ounce, the argument for buying would be much less compelling.

Q: Why is the price so low?
A: Because the price has been rigged by excessive paper speculation on the COMEX, largely at the hands of JPMorgan. For 11 years, JPMorgan has been the largest paper short seller and for the past 8 years it has also been the largest physical silver buyer. It is the financial manipulation of all time and I believe totally illegal.

Q: I know you have maintained this for years, but nothing’s come of it.
A: It certainly explains why silver has been down for so long.

Q: People want a reason for this long period of depressed prices to end. Do you see any reason?
A: Yes I do. On Nov. 6, the Department of Justice announced it was conducting an investigation of manipulation of precious metals prices on the COMEX. It came as part of a guilty plea by a former trader of JPMorgan. To me, this represents the greatest single opportunity for busting JPMorgan’s manipulation of silver prices.

Q: What if the Justice Department doesn’t see what you see?
A: We’re talking about both the Justice Department and the FBI. I consider it highly unlikely that either would conclude differently. Instead of asking me what if the DOJ and FBI don’t see what I allege, you should be asking what happens if they do agree with me.

Q: What happens if they agree?
A: It means the silver manipulation comes to an end and the price is set free. Consequently, you would be much better off owning it now because afterwards it will be obvious to the world what has been going on in silver.

Q: What happens if you are wrong?
A: If I’m wrong and the Justice Department doesn’t step up to the plate and end the manipulation, the downside is limited because the price of silver is already in the gutter and close to the cost of production. It’s not often one gets such a low risk and high profit opportunity.

Q: So you’re saying that things would stay the same?
A: No, I’m quite certain the Justice Department will act to some degree. In any case, JPMorgan’s role is going to diminish because the world is finding out what they have been doing. For one thing, they have accumulated 800 million ounces of physical silver. They know silver’s potential. That fact will prove to a lot of investors just how bullish the future is for the price of silver.

-Wall Street firm says there is now a ‘strong case’ for gold over bonds, stocks. Bernstein is tracking two key measures, both of which are at levels not seen since World War II: global government debt and central bank buying of gold. The firm argues that the current geopolitical environment is heading toward a period in which neither stocks nor bonds will work. “We show that from current equity valuations and from similar points in previous cycles gold and equities give more similar returns to risk assets such as equities,” Bernstein said. Read more here-https://cnb.cx/2SRFPHU

-Ken Rogoff: The curse of cash and the allure of gold. In his book The Curse of Cash, leading economist Ken Rogoff suggests that excessive reliance on paper money is responsible for ills ranging from tax evasion to terrorism. He also believes that monetary policy would be more effective in a largely cashless society. Cryptocurrencies are not an effective replacement for paper money, he says, but gold’s role is likely to increase as cash fades from view. Read more here-http://bit.ly/2E8zPCH

-Lawrie Williams: China officially adds to gold reserves again. While we still disbelieve the ‘official’ total figure for the size of China’s gold reserves, assuming them to be far, far higher than the figure it reports to the IMF, for whatever reason it has changed its reporting tack and now seems to be reporting monthly reserve increases. In all probability this pattern is perhaps designed to make a point in that it is raising the non-U.S. dollar portion of its official foreign exchange reserves. For the second month in a row now the Peoples Bank of China (the nation’s central bank) has announced a reasonably large purchase of gold for its reserves and, presumably, will be reporting the new level to the IMF.

It’s gold reserves, as officially reported, now stand at 59.94 million ounces (1,864.3 tonnes) up around 380,000 ounces (11.8 tonnes) on the end 2018 figure. Somewhat contrary to expectations/predictions, the country’s total forex reserves grew in January by U.S.$15.2 billion due to an increase in its non-dollar assets. The ‘official’ increase in gold and non-dollar assets has been announced as the country goes into the next stage of negotiations on trade and tariffs with the U.S.

The announced increases may be to make a point that it can grow its forex reserves independent of any reliance on the U.S. dollar representing yet another diversification away from the global reliance on the dollar as the world’s principal reserve currency. China has an awful long way to go in achieving a possible long-term replacement of the dollar with the yuan (or perhaps a basket of currencies under the control of the IMF which includes the yuan as a key element). But the Chinese plan ultra-long term and this is indeed a start and we believe China, along with allies like Russia (which has been substantially raising its gold reserves over the past few years) see gold as a hugely important monetary asset in this respect. Read more here-http://bit.ly/2DDZjGF

-When China wanted silver from the rest of the world. China accepting silver for commodities would eventually result in the world’s first common currency. The institution of the Spanish dollar or pieces of eight was arguably globalisation’s first chapter. A route across the Pacific in the 16th century was a catalyst for the integration of the planet. The Silver Way: China, Spanish America and the Birth of Globalisation, 1565-1815 reveals how the Ruta de la Plata connected China with Spanish America, furthering economic and cultural exchange and building the foundations for the first global currency.

It can be argued that when Spain instituted a common currency in the form of the real de a ocho, also known as pieces of eight or the Spanish dollar, globalisation’s first chapter had been written. The acceptance of the dollar coins for commercial transactions throughout Asia, the Americas and much of Europe resulted in a cultural exchange between nations, as well as the relatively free movement of people and goods between the three continents. The main objective behind the sea route plied by Spanish galleons was to establish trade with China. These European vessels became known as China Ships. They transported silver from the Americas to exchange for goods in Asia, mostly commodities of Chinese origin. Read more here-http://bit.ly/2SOGlq4

-Fastest-Growing Gold ETF Using Fee War to Redefine Industry. Will Rhind has seen the top of the gold market, and the bottom. Now, the leader of the fastest-growing bullion-backed ETF in the past year is redefining it by forcing down the fees paid by investors. Rhind, 39, joined the World Gold Council, the company behind SPDR Gold Shares, in 2007, just as exchange-traded funds were starting to gain investor attention. He watched assets hit an all-time high in 2012, followed by a shift in sentiment that sent the precious metal plunging to a bear market one year later.

In 2017, Rhind entered the market with his own shop, GraniteShares Gold Trust. Now he’s in the midst of a fee war with his former employer and other ETFs that’s helped boost his fund’s value to $458 million, from less than $12 million a year earlier. The price cuts are coming at a time when gold prices have jumped about 9.5 percent since August. Once clients see the value of the product “then it doesn’t matter whether it’s provided by a big firm or a small firm,” Rhind said in a telephone interview. “Big companies get used to doing things in a certain way. But I think in the next 10 years it’s going to be drastically different.” Bloomberg

-Federal judge tells traders they can combine cases accusing JP Morgan of rigging metals market. Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan. Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action. CNBC

-Gold Won’t Solve Your Budget Problems. Tapping out central banks’ coffers may seem like a good idea to cash-strapped governments. It’s only likely to cause a different set of headaches. Most of us have a few coins lost down the backs of our sofas. Only the foolish think they can solve their money worries by fishing them out. That’s more or less what politicians in Venezuela and Italy are contemplating at the moment, though. The Latin American government sold more than 40 percent of its gold reserves last year to fund government spending and bond payments, according to opposition lawmakers.

Italy, too, has been roiled with controversy this week after La Stampa newspaper reported that the government was considering selling part of its gold reserves to support its budget an interpretation of a proposed law rejected by its backer, but which Deputy Prime Minister Matteo Salvini has nonetheless described as “an interesting idea.” It’s certainly true that the two countries’ central banks probably hold more gold than they need. About 77 percent of Venezuela’s foreign-reserve assets are bullion, according to the World Gold Council, a higher share than in any other major economy. After it, only the U.S., Germany, and Tajikistan have a bigger proportion of gold on their central-bank balance sheets than Italy’s 66 percent. Bloomberg

-Mysterious Turkish Firm Helped Maduro Move $900 Million in Gold. Two months after Venezuelan President Nicolas Maduro visited his counterpart Recep Tayyip Erdogan in Ankara, a mysterious company called Sardes sprang into existence. The firm started business with a bang in January of 2018, when it imported about $41 million worth of gold from Venezuela, the first such transaction between the two countries in records that go back 50 years. The next month its volume more than doubled, with Sardes transporting almost $100 million worth to Turkey.

By November, when President Donald Trump signed an executive order authorizing sanctions on Venezuelan gold after sending an envoy to warn Turkey off the trade, Sardes had shuttled $900 million of the precious metal out of the country. Not bad for a company with just $1 million in capital, according to regulatory filings in Istanbul. It’s not the first time that Turkey has positioned itself as a work-around for countries facing U.S. sanctions, potentially undermining Washington’s efforts to isolate governments it considers hostile or corrupt. Ankara has often tested the boundaries of U.S. tolerance, and the alliance between the key NATO members is now essentially broken, according to two senior U.S. officials. Bloomberg

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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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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