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Student Loan Debt and Other Gold News and Nuggets

STUDENT LOAN DEBT

Commenting about student loan debt almost two years ago, we wrote, “Everything about student loan debt is bad economics.  All the easy money flowing the way of colleges and universities has led to a doubling of the cost of higher education over the past 20 years.  It has made the schools rich.  They’ve become palatial in some places, top-heavy with administrators and bureaucrats everywhere, although nobody insists that their graduates are better educated.”

Student Loan Defaults

Now the Wall Street Journal reports that the government is starting to figure out it created another mess like the subprime mortgage mess.

from the Wall Street Journal:

“The Education Department, with the help of two private consultants, looked at $1.37 trillion in student loans held by the government at the start of the year. Their conclusion: Borrowers will pay back $935 billion in principal and interest. That would leave taxpayers on the hook for $435 billion. The losses are far steeper than prior government projections and show that after decades of no-questions-asked lending, the government is realizing that it has a pile of toxic debt on its books.”

A CENTRAL BANKER SPEAKS ON GOLD

Central banks have been net gold buyers since 2010.  We have called this one of the most important financial megatrends of our time.  Here are comments about gold that must be seen as very bullish from Róbert Rékási, head of foreign exchange reserves management at the Central Bank of Hungary.

CentralBanking.com:

“Gold remains an attractive asset class for reserve managers. Amid the uncertainties created by COVID-19, gold is acting as a ‘safe-haven asset’, which is reflected in higher gold prices. The other important consideration is the opportunity cost. Because of the crisis, central banks eased policies further and fiscal policies followed suit. In this context, the opportunity cost of holding gold has decreased further….

“Recent surveys have revealed central banks are still willing to increase their gold exposures. Second, the drivers boosting the gold price are very powerful. The low and negative sovereign yield environment is very supportive. Geopolitical and global trade tensions also boost the gold price. For example, growing competition between China and the US is a long-term factor that will not go away after the pandemic or with a new US administration. Third, central banks in different regions look at gold in a different way than before the financial crisis.”

MORE ON DE-DOLLARIZATION  

The SWIFT payments system is the leading international account settlement facility for world banks and commerce.  The US has used the SWIFT system as a tool of its foreign policy, refusing access to it to countries in diplomatic contests.  Eventually, this will drive the development of alternatives to SWIFT.  

But for now, we note that the US dollar’s share of SWIFT settlements is in decline.  

Bloomberg:

“The euro was the most used currency for global payments last month, the first time it has outpaced the dollar since February 2013.

“Data from the Society for Worldwide Interbank Financial Telecommunications, which handles cross-border payment messages for more than 11,000 financial institutions in 200 countries, showed the European Union’s single currency and the greenback were followed by the British pound and the Japanese yen. The Canadian dollar overtook China’s yuan for the fifth spot, Swift said.”

Newsletter writer Chuck Butler observes that “the Fed now owns more Treasuries (their value) than all foreigners combined… Now tell me how this doesn’t end in a trail of tears!”

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An Economic Lesson from the Pilgrims

We hope that you can count the health and safety of your loved ones as among your greatest blessings of this difficult year.  Our heart goes out to all of those that have encountered this pandemic.

We are grateful that 2020 has been such a good year for gold and silver and helping our friends and clients protect their wealth and profit.  We think next year will be just as profitable, if not more so.  

Among our Thanksgiving traditions, right along with turkey, family, and even football, is a story we like to tell each year, a story of our founding with moral that we hope is able to remain a part of national character, one remembered each Thanksgiving. 

It comes from the history of the Pilgrims, who arrived on the Mayflower and settled at Plymouth in 1620 in pursuit of religious freedom. 

But within five months of landing, half the company had died of sickness and starvation. 

The sponsors of the enterprise had insisted that for the first seven years the colony would have “all things in common.” This communal organization, socialism by another name, exacerbated the settlement’s woes. 

The pilgrim’s governor, William Bradford, wrote that men complained about working for other men’s wives and children without being compensated while the wives thought it a form of slavery “to be commanded to do service for other men, as dressing their meat, washing their clothes, etc.; they deemed it a kind of slavery, neither could many husbands well brook it.” 

Altogether the experience of communal property “was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.”

Eventually it was decided, wrote Bradford, that each family would be assigned its own parcel of land so “that they should set corn every man for his own particular, and in that regard trust to themselves.” 

The success of the new arrangement was predictable. 

After one year Bradford reported,

“This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. . . . The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.”

The Pilgrims had their religious freedom, but prosperity wasn’t part of their experience until they had economic freedom as well.  In experimenting with collectivized economic organization, they discovered what everybody owns, nobody owns. 

It’s a lesson that mankind has had to learn and relearn after many bitter experiences, from the “starving times” of the pilgrims, to the millions of deaths from Stalin’s terror famine in the Ukraine, to many millions more deaths from the collectivized farming  under Mao Tse-tung in China.  

The result of an enforced collective ownership, socialized or what is often called public ownership, is waste, neglect, and overuse.  

What everybody owns, nobody owns. 

Here’s to a free and prosperous America!  And a happy Thanksgiving!

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Gold and silver

Gold and Silver Roundup

As we near the end of the year we’ve been watching price forecasts for gold in 2021.  It is hard for anyone to overlook the fundamentals that we have been talking about:  unpayable and still climbing national debt and unprecedented Federal Reserve money printing. 

It is clear that these conditions are accelerating, so we expect accelerating bull market prices in 2021.  

Citi analysts now have a call for $2,500 gold next year, with another possible target of $2,700.  We recommend as well referring to our piece How High Silver?in which we wrote about Citi’s call for a silver to reach $40 next year, a 60 percent increase, “for starters,” they say.  

The bank goes on to calls a forecast of $50 a “very realistic target,” and $100 an ounce “possible.”  Bank of America also has a $50 “medium term” forecast for silver.

BofA is equally bullish on gold.  Last April it published a forecast for gold to reach $3,000 over 18 months.

Inflation worries will fuel demand for gold in 2021, according to a recent note from Goldman Sachs.  Goldman sees gold breaking out of its present consolidation range and climbing to new highs of $2,300.

A view of gold’s price future that spoke volumes about the future value of the dollar was offered by a Bloomberg commodities analyst that we reported in a piece we called Debt Out the Wazoo!  That forecast gold to reach $7,000 by 2025.

The world’s major central banks intend to let inflation “run hot.”  And you know that in January, if not before, Congress will pass another deficit-funded stimulus package.

As Bob Dylan sang in Subterranean Homesick Blues, “You don’t need a weatherman to know which way the wind blows.”

And you don’t need to be a bank analyst to see higher precious metals prices in our future.

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Silver Shining Bright in 2020

What a year it has been for silver!

Both gold and silver continue their year-over-year bull market runs, but as we have explained, silver likes to magnify the moves!

Over the last 12 months (11/19/19 – 11/19/20) silver has gained an impressive 40 percent.  

And that is after a 2o percent correction from its August high.

Americans are renewing their love affair with silver this year.  The Silver Institute, an international trade organization, issued a report last week concluding that silver demand can be expected to surge to a 5-year high:

“Physical investment is expected to surge by 27 percent to 236.8 million ounces in 2020, which would be a 5-year high. The largest retail market for bars and coins, the US, will lead the way with a projected 62 percent gain. This reflects the impact of increased price volatility and healthy price expectations. The second largest market, India, however, has experienced a markedly weaker second half, with outright liquidations, resulting in an estimated 20 percent decline for the full year total.”

On the supply side, the Institute also reports that COVID-19 and lockdowns will result in a 6.3 percent fall off in silver production this year.

One more silver note:  FXStreet.com published an analysis last week that calls silver “the new oil.”  That is an interesting way to frame silver’s role in the production of renewable energy and its growing importance to energy independence.  

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A Muted Warning

You may have noticed increasing talk of a confrontation with Iran.  While economic warfare with Iran has been US policy for some time, there have been reports of new White House conversations about a possible strike on the Iranian nuclear site at Natanz.  Often leaks of that sort are simply part of diplomatic maneuvers.  But we have warned of the risk of an accident or incident in the Persian Gulf.  False flag provocations are always possible.  

We are not specifically predicting a skirmish or something more in the coming weeks but will refer you to our 2019 commentary Temperature Rising in the Persian Gulf for a suggestion of what could happen around the Strait of Hormuz and how it would affect precious metal prices.

This is something we are continuing to keep an eye on, and we think investors should as well.

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World Debt Goes Stratospheric

Meanwhile, Interest Rates are the Lowest in History

The debt splurge continues.

Reuters reports that global debt is expected to reach $277 trillion by the end of this year.  That’s up from $257 trillion last year, with government debt accounting for more than half of the increase so far in 2020.

Citing a new report from the Institute of International Finance (IIF), Reuters writes that “Total U.S. debt is on track to hit $80 trillion in 2020.”  That is a gain from $71 trillion last year.  

Reuters:

“Developed markets’ overall debt jumped to 432 percent of GDP in the third quarter, from a ratio of about 380 percent at the end of 2019. Emerging market debt-to-GDP hit nearly 250 percent in the third quarter, with China reaching 335 percent, and for the year the ratio is expected to reach about 365 percent of global GDP.”

We can illustrate in alarming detail just how wobbly the debt structure is with an account from Bloomberg News about zombie companies.  

Zombie companies – among them Boeing, Carnival, Delta Air Lines, Exxon Mobil and Macy’s – “get their nickname because of their tendency to limp along,” writes Bloomberg, “unable to earn enough to dig out from under their obligations, but still with sufficient access to credit to roll over their debts. They’re a drag on the economy because they keep assets tied up in companies that can’t afford to invest and build their businesses.”

Bloomberg’s analysis reveal that more than 500 of the companies in the Russell 3000 index are not making enough to meet their interest payments.

How does the world get out from under this this debt burden?  The IIF answers in with carefully hedged institutional/bureaucratic language:  “There is significant uncertainty about how the global economy can deleverage in the future without significant adverse implications for economic activity.”

That’s one way to put it.  

The other is that the central baks will try to print their way out, destroying currency values so that debts can be paid in cheap, cheaper, cheapest money.  

That is why you must own gold to preserve your wealth.

Incidentally, we note with interest that China has been able to sell bonds denominated in euros at negative interest rates.  Five-year bonds, as part of a larger bond offering totaling $4.74 billion, were sold with a negative yield, minus 0.152 percent.

Altogether, there is almost $17 trillion of negative yielding bonds in the global market.  

Which leads to the question we have asked repeatedly:  How long can the lowest interest rates in history co-exist with the lowest interest rates in history?

If you devote an hour to thinking about that, you will probably decide to buy gold sometime in the first five minutes.  At Republic Monetary Exchange, we’ll be waiting to hear from you.  

We can help.

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Strange New Respect, Part II

One way to track the growing de-dollarization of the global economy is by the “Strange New Respect” gold keeps getting.

That’s what we called it in a piece over a year ago when we reported that central bank gold buying was setting new records.  The mainstream media were missing it (of course!), but the world’s central bank have clearly been taking gold very seriously.  

The latest news on that front is from Russia, where legislation to allow the country’s ’s $167.6 billion sovereign National Wealth Fund to invest in precious metals is now under consideration.  The fund holds pension assets and revenue from Russia’s oil exports.

Finance Minister Anton Siluanov is already on record supporting the move, observing correctly that gold is more sustainable in the long term than other financial assets.

As we have often observed, central bank gold buying is a megatrend for a reason.  The prognosis for the dollar is negative.

More strange new respect for gold can be found in the major financial institutions and investment figures, especially those that have long eschewed gold, now looking at it more favorably.  Warren Buffett is among them as we have chronicled HERE and HERE, while major banks with new gold recommendations and higher price targets included UBS, Wells Fargo, and Bank of America.   Pension and endowment funds are showing a strange new respect for gold, too.

That is what happens when the State has mismanaged its currency and painted itself into a corner of unpayable debt.  Oh, and on that front we note that the new fiscal year has gotten off on a bad foot.  The deficit for the first month of Fiscal Year 2021, was a record-setter for any October of $284.1 billion.  That’s a deficit more than twice as large as the prior October.

Already our $27 trillion national debt is producing lower investment and growth.  If the debt continues to grow by $2 – 3 trillion a year, it will double by 2030.  The US will be looking at a national debt of $55 – $60 trillion.  We shudder to think what that will mean.

All around the world people who know money best are developing a strange new respect for gold.  For more reasons why they are moving to gold, speak with a Republic Monetary Exchange gold and silver professional.  

Do it now, before the movement turns into a stampede.

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Gold Notes and Nuggets for November 2020

Silver Demand Indicator

Sales of US Silver Eagles by the US mint have totaled 27.2 million ounces so far in 2020.  That compares to the 2019 total of 14.8 million ounces

More Debt, Less Production

“Simply put, there is a fundamental inconsistency over the long run between an ever-rising share of US debt in world markets and an ever-falling share of US output in the global economy.”  Kenneth Rogoff, Harvard.

More Spending, Less Revenue

See for yourself!

More Spending, Higher Gold

See for yourself!

More on the Full-Tilt Crypto-Boogie

That’s the unfortunate name we have given to the otherwise unnamed plan now on the Federal Reserve’s drawing boards to bring every commercial transaction in the US under the watchful eye of the national surveillance state with its own digital-crypto-central-bank-block-chain-wallet-Fed-coin-currency.  

This is an ominous development and one of our leading reasons to own gold and silver and get off the Fed’s confiscation and monetary devaluation grid.

The latest is from across the Atlantic.  If the Federal Reserve is Tweedledum, the European Central Bank is Tweedledumber.  They are headed into the full-tilt boogie, too.  Policy makers there intend to make a go/no-go decision on their block chain currency by the middle of 2021.  ECB president Christine Lagarde said this week that, “If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it.”

Monetary sovereignty?  Perhaps.  Personal sovereignty?  Au revoir.

RME Reminder

You know the holidays always crowd everything else off the table this time of year, but while you can, before you get any busier, why not prepare for whatever instability 2021 brings… and do it now?

Contact Republic Monetary Exchange today and speak with one of our knowledgeable professionals, before the New Year arrives.

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A Take on the Times, the Debt, and the Full-Tilt Crypto-Boogie

We could not have said it better, so we will let him speak for himself.  Doug Noland from Credit Bubble Bulletin has a long record of chronicling the birth of bubbles and the destruction of their popping.  

Here’s his recent take on the times:

“I have never been more concerned. Having watched ‘money’ and Credit run increasingly amuck over recent decades, I have long harbored fears of an inescapable future of calamitous financial, economic, social, political and geopolitical instability.

“That future is now unfolding.”

The establishment press has a long history of turning a blind eye to fiscal crises in development.  But now establishment journal Foreign Policy says, “Start Preparing for the Coming Debt Crisis.”

A couple of snippets:

“The next U.S. administration will likely face a global debt crisis that could dwarf what the world experienced in 2008-2009.”

“A surge in spending to mitigate the health and economic impacts of the pandemic has brought the total public debt in the United States to over 100 percent of GDP—its highest level since 1946 and a hurdle that will create a considerable drag on future economic growth. Other types of debt—household, auto, and student loans, as well as credit card debt—have seen similar surges.”

“Almost 20 percent of U.S. corporations have become zombie companies that are unable to generate enough cash flow to service even the interest on their debt, and only survive thanks to continued loans and bailouts.”

“Central banks’ balance sheets are stretched from the policies they have followed since the 2008 financial crisis and expanded in the course of the pandemic. Piling debt on top of debt seems to have reached a dead end.”

And finally, a few weeks ago we began warning about one of the craziest monetary schemes on the Federal Reserve’s drawing boards.  There’s no name for it, so we just dubbed it what it is:  The Full-Tilt Crypto-Boogie.  It will be some form of the Fed’s own digital-crypto-central-bank-block-chain-wallet-Fed-coin-currency.  

More evidence for it can be found in a passing mention in the Foreign Policy piece, a reference to a new funny money that is even funnier than our present funny money:  “A growing number of economists and policymakers are beginning to talk about the need to shift to a new, possibly digital monetary regime whose contours remain unclear.”

It’s coming! Have gold?

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Wall Street Traders, Speculators Put Gold on Sale

We’re Always Grateful When They Do This

We are heading into the homestretch of 2020.  Soon will be the holidays and then 2021, which looks to be another dynamic year for precious metals.  Through last week gold gained more than 27 percent in 2020.  That is after a strong year in 2019 as well, one in which gold gained more than 18 percent.

Silver’s 2020 performance has been stellar as well, up more than 45 percent through Friday.   

Post-election news that Pfizer, the pharmaceutical giant, has produced a COVID vaccine with a reported 90 effectiveness rate in trials bounced the stock market sharply higher on Monday (11/9), driving Wall Street players to sell gold and other investment vehicles to jump on the stock market train.  

In doing so, they provided an opportunity to buy precious metals at “sale” prices.  In a year in which gold reached all-time highs in virtually every currency in the world, Wall Street provided a welcome bargain in gold.

Such opportunities do not usually last long.  You will remember that the COVID-19 panic in March had Wall Street traders and speculators selling gold to raise margin call cash as the stock market tumbled.  The impact on gold was brief, less than two weeks.  In no time it was higher than when the sell-off began.  

Monday’s gold drop of about $100 was followed by a quick recovery of $22 on Tuesday.  Chartists will note that this is the third time since September that the gold price has tested lows in the $1,850 range, providing good technical evidence of a floor and three months of base-building.

Meanwhile the Lombard Letter writes that surging coin sales make a compelling case for much higher prices:

Year-to-date, until around mid-October 2020, the U.S. Mint sold 678,000 ounces of gold in American Eagle coins. (Source: “Bullion Sales,” U.S. Mint, last accessed October 15, 2020.)

How significant is this? In the entire year of 2019, the U.S. Mint sold just 152,000 ounce of gold in American Eagle coins. In other words: gold demand is running 346% higher this year than last year.

Lombardi describes corroborating high demand at Australia’s Perth Mint.  It is evidence that, it its words, “there’s a gold rush happening at the moment, and it’s getting bigger.”

We recommend you get positioned now for 2021.  This is an opportune moment to speak with a Republic Monetary Exchange gold and silver professional and take steps to add to your existing precious metals holdings.

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Gold Goes Up Either Way

Gold does not care who controls the White House.  It goes up either way!

That is the conclusion of a review of half a century of gold price action.  The World Gold Council points out correctly that gold goes up no matter which party controls the White House!

Let us give you some recent examples.

The price of gold roared to a new all-time high under Barack Obama.  It was about $850 when Obama moved into the White House.  In less than three years it had climbed 126 percent, reaching a new all-time high.

Donald Trump was inaugurated in January 2017.  The price of gold was just over $1,200 at the time.  But it climbed 74 percent to another new, all-time high of $2,089 by August this year.  

Here’s the WGC’s historical perspective:

“Looking back, gold’s performance has not significantly differed based on the party controlling the White House. Since 1971, gold returns were 11% on average per year during Democratic presidencies and 10% during Republican ones. Similarly, gold returns were only slightly higher in the year following a challenger party’s victory relative to an incumbent party’s victory (7.9% versus 6.5% respectively).

“Gold is a global market; it is purchased by consumers and investors around the world for a myriad of reasons, but primarily as a means to preserve capital and diversify risk. The US is the third largest gold consumer market, accounting for approximately 7% of global physical gold demand in the form of jewelry, technology, bar and coin, and ETFs…. There is still a large portion of physical gold demand that is influenced by global dynamics well beyond the US election.”

Other major financial institutions make the same point.  That’s because gold reflects real global economic conditions, including government debt and like the Fed’s funny-money policies.  And it is a referendum on the global assessmentsof the future value of the world’s reserve currency:  the US dollar.

You may already understand about the dollar’s future, about unpayable government debt and Federal Reserve money printing.  But now you need to act.

Take steps now to protect yourself and your family with gold and silver.  Talk to the professionals at Republic Monetary Exchange today!

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When the Election Dust Settles

Gold After the Election

Let’s sample some informed opinions about what will happen once the election is (more or less) settled:

According to the Royal Bank of Canada, once the dust settles, gold will resume its march higher.  

According to The Union Journal, George Gero, the managing director of RBC Wealth Management, believes traders will begin looking to “stimulus legislation, inflationary prices [and] large debts,  so gold can resume the upward trend towards $2,000.”

The Swiss-based investment banking powerhouse Credit Suisse, says, “Big picture, we continue to look for $2300.”

The bank’s strategists observe that “gold extends its consolidation from our $2075 target hit in August and we maintain our core view this is a temporary and corrective pause in the broader uptrend. Indeed, price action is beginning to increasingly look like a bullish ‘wedge’ continuation pattern, adding weight to our view.” 

In a CNBC interview, James Rasteh, CIO of Coast Capital, said that US fiscal and monetary policies will remain much the same no matter who claims final victory.  

This is a view we have expressed many times ourselves, most recently two weeks ago when we took a look Behind the Curtain where the Great and Powerful Monetary Oz twists the dials that set our economic course, push buttons that boom and bust the economy, and work the levers to determine the value of our money.

“We would be printing trillions of dollars more and all of that ultimately has extraordinarily positive repercussions for gold,” said Rasteh, pointing to a sizeable stimulus program without regard to the election outcome.”

Despite the ongoing counting, gold is bullish no matter which candidate wins

Let’s look at a historical perspective from the World Gold Council.  Juan Carlos Artigas, the Executive Director and Head of Research points out that gold goes up no matter which party controls the White House [emphasis added].  

“Looking back, gold’s performance has not significantly differed based on the party controlling the White House. Since 1971, gold returns were 11 percent on average per year during Democratic presidencies and 10 percent during Republican ones. Similarly, gold returns were only slightly higher in the year following a challenger party’s victory relative to an incumbent party’s victory (7.9 percent versus 6.5 percent respectively).”

We recommend that you keep your wealth in real money that cannot be corrupted by politicians and central banks.  And we recommend that you make the move now, while you can.

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China Won’t Fund U.S. Forever (But the Fed Will!)

It’s a good thing we have two eyes.  For good and sufficient reasons most people have been keeping a close watch on domestic affairs.  It’s a good thing to do, especially in the political season.

But we have also been keeping an eye of global affairs where something important is happening.  Most of the media misses it because they do not understand how important it is.  But it affects everything, the value of our money, the cost of living, and our long-term prosperity.  In other words it affects the American Dream.  

It is the most important financial megatrend of our time.

America’s creditor base is decaying.  

Here is the latest.  As US debt has mushroomed, China has been a major creditor.  In the fall of 2013 its holdings of US Treasury debt reached $1.3o5 trillion.  

Now, it is shedding its holding of US government debt.  It’s down to $1.06 trillion.  

Ten years ago, Russia held $180 in Treasury debt.  But as we reported in May, “[Russia’s] dollar holdings have fallen so low they are reported down in the asterisks in US Treasury listings, below the holdings of countries like Iraq and Vietnam.”

Of course you know that in the both the case of China and Russia, de-dollarization goes hand in hand with a determined move to fortify their bank reserves with gold.  

In a commentary on May 20, we wrote that the primary impact of this move to gold is threefold:

  • Central bank gold purchases are a harbinger of growing “de-dollarization,” the waning role for the dollar as the world’s reserve currency.  As such they also signal a long-term decay in the dollar’s purchasing power.
  • The addition of gold to central bank reserves makes those nations less susceptible to US  foreign policy hegemony.  It is no secret that the rest of the world, including long-time US allies, are bristling at what they see as the heavy hand of US trade restrictions and sanctions that directly impact their economies.
  • The sheer quantity of central bank buying power has an unmistakable impact on gold’s trajectory.  Furthermore, gold in central bank reserves is gold in strong hands and is less likely to be sold.

Meanwhile, in a report on China’s waning dollar holdings, CNBC cites an analyst saying, ““The key question then is: who will finance the heavy issuance associated with very large budget deficit.”

We know the answer to that.  US debt will have to be financed by Federal Reserve money printing.

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All Money Printing, All the Time!

Just like in Alice in Wonderland, the Federal Reserve has to run faster and faster just to stay in the same place.  

The Fed has had to buy a growing share of US government debt instruments to keep interest rates low and to keep Washington afloat.  

Here are recent remarks from Federal Reserve Vice Chair for Supervision Randal Quarles:

“It may be that there is a simple macro fact that the Treasury market being so much larger than it was even a few years ago, much larger than it was a decade ago and now really much larger than it was even a few years ago, that the sheer volume there may have outpaced the ability of the private market infrastructure to support stress of any sort there.”

Let me translate this from Fed-speak.  The US debt is now so great that it may be more than the market can absorb, which would mean the Fed would have to keep printing money at accelerated rates forever to fund Washington.

The chart above represents the ratio of Fed Treasury holdings, now at a record 22 percent.  But it doesn’t reflect the explosion in Treasury debt issuance itself.  So the Fed’s holdings reflect a rising percentage of a rising debt problem.

In an opinion piece on Bloomberg.com, writer Brian Chappatta says, “It’s not so much that the concept [Quarles’ mention of an ‘indefinite need’ to support the Treasury market] is at all surprising to bond traders, but rather saying so in a public setting shines a light on the Fed’s thinking about just how much of a role it needs to play in the world’s biggest bond market to prevent breakdowns in the financial system [emphasis added]….

“Put it all together, and it sure sounds like infinite QE.  Just don’t expect many more Fed officials to say it.”

Let me simplify the entire discussion.  It’s all about money-printing.  Only the manner and rate are at issue.

We imagine these same issues – manner and rate — were the subject of deep discussions in Weimar Germany in the 1920s, as well as all the other economies that have been destroyed by money printing.  

Manner and rate.

How many people in how many countries wished in retrospect that they had moved their wealth to precious metals at the time the monetary authorities were reduced to talking about just how, and just how fast, to print money?

Take steps at this critical juncture to protect yourself, preserve your wealth, and profit with gold and silver.  Speak to a Republic Monetary Exchange professional today.

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The Most Perilous Time in American History

The Left and Right Agree About Only One Thing: Printing More Money!

Today’s commentary is drawn from observations by hedge funder David Einhorn of Greenlight Capital.

In a rather dramatic announcement, Einhorn says that we have seen the top of the stock market.  It has been a bubble, one drivne by technology stocks, and that bubble has burst, he says.

You may have heard the story about Joe Kennedy who decided it was time to get out of the market when he got a stock tip from a shoeshine boy.  Einhorn shares a similar anecdote.  He says he recently received a job application from a 13-year-old who wrote, “I’m young, but good at investments.”

Here’s a link to a story describing some of Einhorn’s more substantive reasons for calling a top in the market.

We’re not surprised by his identification of a market top.  We put out our own warning two weeks ago, describing the stock market and the social order as equally wobbly:

“But it’s not just stock markets that are wobbly.  The social situation in this country is wobbly as a well, thanks to the Fed’s cronyism.   The November election will very likely bring more of our national instability to the fore no matter who wins.”

So while we find Einhorn’s argument about the stock market persuasive, it is his other comments – mostly overlooked – that we deem even more important

Between the pandemic, the social divide, and civil violence, Einhorn writes, “This may rank among the most perilous times, absent war, in modern American history.”

“It isn’t difficult to envision this tempest exploding after the election, no matter which side wins,” he says.  “According to Politico, 44 percent of Republicans and 41 percent of Democrats believe there would be at least ‘a little’ justification for violence if the other party’s nominee wins the election. A poll by Rasmussen Reports found that 34 percent of likely voters believe a civil war is likely in the next five years. While this is probably too pessimistic, it likely reflects a rising tail risk.”

As the poet Yeats wrote, “Things fall apart; the center cannot hold.”  

Einhorn agrees.  “The only common ground between the two parties seems to be money-printing. Over $3.3 trillion has been printed year-to-date, which represents nearly 22 percent of all U.S. dollars in existence at the end of 2019.”

And with that, Einhorn concludes, “Unsurprisingly, gold is outperforming. Investors who have argued against gold for decades are now buying some.”

Yeats’ poem continued: “Mere anarchy is loosed upon the world; The blood-

dimmed tide is loosed.”

We think this is an exceptionally important time to speak with one of Republic Monetary Exchange’s gold and silver specialists and get some sound, actionable advise on protecting yourself in these times with gold and silver. 

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The Full-Tilt Crypto-Boogie

We promised you last week that we would keep an eye on the Federal Reserve and let you know what it is up to.  That is because there is always a plan afoot to manipulate the currency and destroy its value.  Today we want to warn you about the latest.  

There is no name for it, so we will just call it The Full-Tilt Crypto-Boogie.

The stories of government money printing are legion.  Real-life stories about all the printing presses, the ink, and the paper that have been used to destroy currencies.  

About 50 years ago Milton Friedman talked about the Fed distributing freshly printed money from helicopters to the unwashed masses below.

Not long ago, Fed chairman Ben Bernanke re-popularized the term to explain that when the Fed is serious about devaluing the dollar, that is how it can be done.  

By just dropping dollars from the air.  

But that is so yesterday!  

We will probably keep using the term “printing money” to describe currency inflation because it evokes a clear image of the actual policy, even though we know perfectly well that in our digital age, it is way behind the times.

Even “helicopter money” is hopelessly outdated because the Fed has new ways of doing things on its drawing boards. 

A month ago we described a plan under consideration at the Fed of something called “recession insurance bonds.”  The Fed would deposit these in people’s accounts in advance, then, when the Fed decided, it would flip of a switch to activate them.  

Another scheme calls for every American to have a bank account at the Fed, allowing it to make instant deposits (and withdrawals, although they aren’t really talking about that part!) at any time and place of its choosing.

What is the point of these schemes?  What’s wrong with them making midnight deposits in our accounts?

Since there is no such thing as a free lunch, we must look more closely for the reasons for these free-money policies.  First, they will demand that all Americans be herded and corralled into keeping all their money institutionalized.  It is designed in part to help the State surveille your every move, so it means the end of cash, too. This will help the Fed implement a negative interest rate regime.  After all, most people will never be willing to pay the bank to hold their money.  So, they must not have any choice in the matter.  

These monetary schemes will allow the Fed’s cronies to conduct currency wars to their benefit and at the expense of the people.  Oh, and since its “just monetary policy,” it is an attempt to evade Congress and the people’s representatives.

These schemes are also designed to allow the authorities to instantly transmit to every account in the land, and automatically implement, policy changes like tax initiatives and rate changes.

And finally, the Fed must create a lot of inflation to devalue $27 trillion in debt.  Piddly little inflation rates of two and three percent are not up to the job.  It will take much more than that.

So now the Fed seems to be settling on a favorite plan to create a lot more inflation.  

It’s The Full-Tilt Crypto-Boogie.

It’s the Fed’s own digital-crypto-central-bank-block-chain-wallet-Fed-coin-currency.  You can read more about it here at the website ZeroHedge.

We will be writing more about The Full-Tilt Crypto-Boogie in the future.  But for now, it’s about the best damn reason that we have ever seen to buy more gold and silver!

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Jim’s 2020 Vote Guide

Dear Fellow Patriots!

Below is a list of conservative candidates I am recommending for almost all offices on the ballot. You can view below or click here for the printable version to take with you to the polls.

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Let’s keep Arizona Red and Make America Great Again!

President and Vice President

  • Donald Trump and Michael Pence

U.S. Senate

  • Martha McSally

U.S. Congress

  • Tiffany Shield, CD1
  • Brandon Martin, CD 2
  • Daniel Wood, CD 3
  • Paul Gosar, CD 4
  • Andy Biggs, CD 5
  • David Schweikart, CD 6
  • Debbie Lasko, CD 8

Corporation Commission

  • Eric Sloan
  • Jim O’Connor

Maricopa County

  • County Recorder: Stephen Richer
  • County Attorney: Allister Adel
  • Sheriff: Jerry Sheridan
  • Board of Supervisors, District 2: Steve Chucri
  • Board of Supervisors, District 3: Bill Gates
  • MCCC District Board, At Large: Shelly Boggs
  • MCCC District Board, District 1: Laurin Hendrix
  • MCCC District Board, District 3: Susan Bitter Smith

Mayor

  • Phoenix: Merissa Hamilton
  • Scottsdale: Lisa Borowsky
  • Gilbert: Matt Nielsen

State Legislative Races

  • Judy Burges, LD 1 House
  • Quang Nguyen, LD 1 House
  • Deborah McEwen, LD 2 House
  • Travis Angry, LD 4 Senate
  • Joel John, LD 4 House
  • Regina Cobb, LD 5 House
  • Leo Biasuicci, LD 5 House
  • Walt Blackman, LD 6 House
  • Brenda Barton, LD 6 House
  • David Peelman, LD 7 House
  • Bret Roberts, LD 11 House
  • Vince Leach, LD 11 Senate
  • Mark Finchem, LD 11 House
  • Warren Petersen, LD 12 Senate
  • Travis Grantham, LD 12 House
  • Jake Hoffman, LD 12 House
  • Sine Kerr, LD 13 Senate
  • Tim Dunn, LD 13 House
  • David Gowan, LD 14 Senate
  • Gail Griffin, LD 14 House
  • Becky Nutt, LD 14 House
  • Nancy Barto, LD 15 Senate
  • Steve Kaiser, LD 15 House
  • Justin Wilmeth, LD 15 House
  • Kelly Townsend, LD 16 House
  • Jacqueline Parker, LD 16 House
  • JD Mesnard, LD 17 Senate
  • Liz Harris, LD 17 House
  • Suzanne Sharer, LD 18 Senate
  • Paul Boyer, LD 20 Senate
  • Anthony Kern, LD 20 House
  • Shawnna Bolick, LD 20 House
  • Rick Gray, LD 21 Senate
  • Kevin Payne, LD 21 House
  • Beverly Pingerelli, LD 21 House
  • David Livingston, LD 22 Senate
  • Ben Toma, LD 22 House
  • Frank Carroll, LD 22 House
  • Michelle Ugenti-Rita, LD 23 Senate
  • John Kavanagh, LD 23 House
  • Joseph Chaplik, LD 23 House
  • Tyler Pace, LD 25 Senate
  • Rusty Bowers, LD 25 House
  • Tatiana Pena, LD 27 House
  • Jana Jackson, LD 28 House

PRINTABLE VERSION

How High Will Silver Go?

$40? $50? $100?

How much higher do you think silver will go?  

One of the world’s largest investment banks agrees with us that it will go higher.  

Much higher.

Twice in less than 50 years, silver has raced to the $50 an ounce neighborhood.  The last time was in 2011.  Before that, it was in 1980.

Maybe wise king Solomon was right, that “what has happened before will happen again. What has been done before will be done again.”

But you don’t need to be a philosopher to foresee much higher silver prices.  You just need to look at the dismal debt picture and the currency devaluation that unpayable debt will demand.

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Silver Morgan Dollar

The resource team at Citigroup has looked at those factors, as well as expected natural resource demand, and the technical picture as well, to make a case for $100 silver.

Forbes contributor Tim Treadgold described Citi’s case for a 60 percent price rise “for starters.”  Citi analysts have tipped their clients that silver will rise to $40 an ounce over the next 12 months.  

Says Treadgold, “Citi’s case for silver is based on growing demand from investors who see silver as a cheap entry point into the world of precious metals dominated by gold, with a bonus of strong industrial demand.”

But the Citi outlook doesn’t stop at $40 an ounce.  “It also argues that there is a technical case for silver doubling to $50 an ounce, and potentially rising four-fold to $100 per ounce.”   

According to Citi’s analysts, “We expect that investor demand for precious metals exposure will remain high during 2021 as pressure on governments to devalue currencies, concerns about vaccine efficacy and take-up rates and questions over equity and bond valuations and rising global debt remain in most scenarios,” Citi said.

The bank calls its forecast of $50 a “very realistic target,” and $100 an ounce “possible.”

In August we reported that Bank of America has a $50 silver target:  “The bank’s call for higher silver prices rests not just fiscal and monetary grounds.  Its analysis takes note of so-called ‘green’ initiatives in Washington which could drive new industrial silver demand, especially for solar power applications.” 

The nation’s second largest bank, writes that silver could rise to $35 next year, and rally to $50 in the medium turn.

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Behind the Curtain

We think gold and silver will go up if Donald Trump is re-elected president.

We think gold and silver will go up if Joe Biden is elected president.

I’m sure you’d like us to explain since we have a two-party system and candidates that differ on the issues and on how the government should be run.  

How could the same results follow the election of either man?

We think it is time to realize that the monetary policies in this country do not flow out of the White House.  

Nor do they come from Congress.

The monetary policies of the United States, the decisions that boom and bust the economy, that determine the future value of the US dollar, are made by a group of mostly nameless, faceless bureaucrats.  Functionaries that no one voted for, no one elected, and few people can name.

We think it is fine to be focused on the election.  We think it is important, too.

But you can never – never – take your attention off The Great and Powerful Oz operating behind the curtain.  That is where the dials are twisted that set our economic course.  That is where the buttons that are pushed boom and bust the economy.  That is where the levers are pulled that determine the value of our money.

It is quite clear that these people prefer to operate in the dark.  At the pinnacle of his career, Alan Greenspan, the longest-serving Fed chairman in history once told an audience, “If I’ve made myself too clear, you must have misunderstood me.”  A remark like that is just what we have come to expect in this age of deceit and confusion.

This is the Fed that desperately fought to keep you from learning what exactly they were up to with their dollar portfolio during the mortgage meltdown.  It took years of legal action to finally discover which cronies got Fed lifelines in a $1.2 trillion dollar operation.

And legendary are the Fed’s efforts to fight off being audited.

Last month current chairman Jerome Powell admitted to “crossing red lines” in its policy actions, but said, “We’ll figure it out later.”

Not a lot of foresight there.

So, we’re just saying that we’re interested in the election, too.  And we think it matters.

But while nobody was paying much attention earlier this year, the Fed printed up more than $3 trillion dollars.  Out of thin air.  

That money printing drove gold to an all time high this year.  

Not only were we watching, we told you what was happening.  We want you to know that while we’re all watching the election shenanigans, we’ll also be keeping an eye on the operations behind the curtain.  

We’ll let you know what The Great and Powerful Oz is doing every step of the way.  And help you protect yourself, your family, and your wealth.

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What We’re Up Against, Part II

Mercifully, the US government accounting year, Fiscal Year 2020, ended a few weeks ago.  It was one for the books.

The record books.

We’ll get to the numbers in a moment.  But we must tell you that in some ways this a repeat of a commentary we posted two years ago, with the ending of FY2018.  And we could have run it again last year, at the end of FY2019.  But we don’t like to repeat ourselves that often.

The problem is that there are a lot of things fishy about the way the government operates.  But nothing is fishier than government accounting.

That’s a problem for us all, because government accounting helps determine what people consider the prospects for the US dollar to be.

So, with the ending of FY2020, the financial news outlets have been filled with stories about the US budget deficit.  They report the deficit $3.1 trillion.  That’s nothing to sneeze at, but it is way short of reality.  

Here’s the way the Wall Street Journal reported the news:

“WASHINGTON—The U.S. budget deficit tripled to a record $3.1 trillion in the fiscal year that ended Sept. 30…. 

“As a share of economic output, the budget gap in fiscal year 2020 hit roughly 16.1%, the largest since 1945, the Treasury Department said Friday, when the country was financing massive military operations to help end World War II.

“Federal debt totaled 102% of gross domestic product, the first time it has exceeded the size of the economy for the full fiscal year in more than 70 years, according to estimates from the Committee for a Responsible Federal Budget.”

Okay.  $3.1 trillion.  That’s big.  It’s a triple from last year.  But it’s not right.

Here’s what really happened.  At the end of FY2019, the gross federal debt was $22.798 trillion.  At the end of FY2020 the gross federal debt was $27.026 trillion.  

That means the debt actually rose by $4.228 trillion.  

There’s a big difference between the $3.1 trillion deficit the government news release and the media report, and the $4.2 trillion I am describing.  The difference is $1.1 trillion.  And that’s real money!

Who’s right?  If the picture of the nation’s finances the government provides is correct, you should go your merry way.  

But if the picture I provide is correct, you will want to make sure you are substantially protected with precious metals.

Let me show you how to find out for yourself who is telling you the truth.  The US Treasury maintains a site that reports the federal debt “to the penny” each business day.  Here is the link.

Call up the national debt at the end of September this year, FY2020.  It was $27.026 trillion.  Now, look up the national debt one year earlier, at the end of September 2019.  You will see that FY2019 finished with a national debt of $22.798 trillion.

The difference is the increase in the national debt in a year.  It represents a deficit, a gap between what the government took in and what it spent.  

It is not $3.1 trillion billion.  It is more than $4.2 trillion.

Even the $27.026 trillion national debt figure – as mind-boggling as it is – is another product of government accounting.  As we wrote about the practice two years ago, an honest measure of its indebtedness should include promises the government has made to pay for things.  That’s how we reckon debts in the real world.  

Among the promises the government has made that people rely upon are things like Social Security and Medicare.  These unfunded liabilities are debts of the country, no less than any other government promises to pay.  

Accordingly, the real national debt should be measured in the hundreds of trillions of dollars!

Government accounting is also what has allowed the Federal Reserve to destroy 97 percent of the dollar’s purchasing power, even at it is charged with maintaining price stability.

If private businesses operated with the flim-flammery of government accounting, people would be locked up in jail.

There is really only one broad-spectrum protection against government accounting and the destructive practices in enables.  

It is gold.

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23.6% of All US Dollars Were created in the Last Year!

A look at the Greatest Money Supply Surge in History

The headline above is borrowed from Michael Shedlock’s blog, Global Economic Trend Analysis, at TheStreet.com.

Although we have tracked the Federal Reserve’s massive dollar creation for you, we think the headline frames the frenzy in a dramatic way.  Almost a quarter of the US money supply is new, freshly “printed,” and conjured into existence just this year.

Having grown by $3 trillion just since March, it is, as Shedlock points out, the greatest money supply surge in history.

One question that occurs to us is this.  Who exactly in the government, at the Treasury department, or at the Federal Reserve, is telling you what the impact of this unprecedent monetary surge will be?

Exactly nobody.

A few may know what it will do to the economy.  They aren’t talking.  Most don’t know.  Fed chairman Powell says they’ll figure it out later.   

Shoot first.  Ask questions later.

To be bullish on gold and silver is simply to acknowledge that what the Fed has already done necessarily will have consequences.

Here are the numbers for M2 money supply.  In the middle of October 2019 M2 was $15.1169 trillion.  On October 5, 2020, it was $18.6993 trillion.   That is an increase of $3.5824 trillion in one year.

Here is a five-year chart showing the explosion in the money supply and the accompanying rise in the price of gold.  The money supply has grown so fast, it looks like gold has some catching up to do.

Now, the Federal Reserve, even with hundreds of economists on staff and others receiving Fed dollars, won’t bother to tell you what all this furious money printing means for the dollar, for gold, and for you.  But even if they won’t tell you, we will.  We have written about these policies and their impact in detail for years.  We invite you to spend some time searching hundreds of posts on our blog.  

When the Fed won’t tell you about the destructive impact of their policies, we will.  We invite you to speak with a Republic Monetary Exchange gold and silver specialist today. 

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Stock Market Warning!

And a Wobbly Social Order!

We have made the point many times that the US stock market is floating on the back of a loose money regime, money the Federal Reserve has been stove-piping to Wall Street.

Here is a 10-year chart of the S&P500 stock index.

Most of the left half of the chart shows the effect of Quantitative Easing money printing and the lift it provided the stock market.  

On the right-hand side in the area that reflects this year, 2020, you can see the sharp break in the market with the arrival of the pandemic shutdown. It crashed stocks by 35 percent seemingly overnight.

Since then, in a few short months, the Federal Reserve created some $3 trillion dollars out of thin air to drive stocks back up.

It has succeeded.  But at a price.

We want to show you another chart, one that puts these lofty stock heights in perspective.  This recent chart shows the total market capitalization of US stocks, the market value of stocks today, as a percent of total US productivity, or Gross Domestic Product (GDP).

Warren Buffett calls this ratio of market cap to GDP “probably the best single measure of where valuations stand at any given moment.”

Think about that.  The best indicator of stock valuations is at stratospheric heights compared to the actual productivity of the economy.  And we know that it is held aloft by Fed money printing.  

It’s okay to be cynical about all this.  Just the other day, Mary Daly, the head of the San Francisco Fed defended the Fed’s tender, loving care for Wall Street by saying it is all being done for the little people.  Speaking at a University of California, Irvine event, Daly said, “I am not willing to trade millions of jobs for people who need a ladder rung up in order to keep the stock market from going up for a few who have those holdings.” 

Oh?  But if the gusher of Fed liquidity for the past ten years is all being done for the little people, why does the wealth gap keep widening?

The answer is clear.  The wealthiest people, as she acknowledges (“the few who have those holdings”), own most of the stocks.  Monetary policies designed to lift stocks make the wealthy wealthier.  They widen the gap.  And they make the stock market vulnerable since it is held aloft by a monetary gimmick and not by real fundamental valuations.

But it’s not just stock markets that are wobbly.  The social situation in this country is wobbly as a well, thanks to the Fed’s cronyism.   The November election will very likely bring more of our national instability to the fore no matter who wins.

If you are looking for a safe haven from a wobbly stock market and during what could be one of the most divisive periods in US history since the Civil War, we would suggest a well-thought-out portfolio of gold and silver.

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Spending Our Way to Prosperity

It’s all unfolding like a bad dream.  

I mean our financial and monetary future.

Maybe it is more like a “B” movie, one that is totally predictable.

Nations globally have spent $12 trillion they do not have on “stimulus” measures this year.  The US is more than $3 trillion of that.

But it is never enough.  US Federal Reserve chairman Jerome Powell wants more deficit spending.  At the International Monetary Fund annual meeting this week, Christine Lagarde, the head of the European Central Bank, is calling for more deficit spending too.

They all read from the same tired script.  We have seen it all before.

The theory that has guided US and global fiscal and monetary policy for almost a century, “Keynesian economics,” calls for deficit spending by governments during slowdowns.  Then, according to the theory, governments would run surpluses during recoveries, and pay off the debt.

It was balderdash to begin with, but even those that bought it must acknowledge that in practice the authorities ran deficits in both slowdowns and recoveries.

Stated differently, the US should not have had $23 trillion in debt when the pandemic hit.  Especially since we were more than ten years into our post-housing bust recovery, the longest recovery in our history.  

While the fiscal authorities have run the debt to the moon, the central bankers have flooded the world with digital “paper” money.  Here’s a chart from Bloomberg that shows what they have done since 2008.

A Bloomberg News story describes Lagarde and other central bankers now pushing for more deficit spending. 

“A parade of Federal Reserve officials led by Chair Jerome Powell lined up last week to make the same argument with regard to the U.S., where talks on the next dose of pandemic stimulus have been deadlocked for months in Congress. Fed officials said their own tools, such as another round of bond-buying, won’t be as effective as government spending.

“The message from the most powerful central banks is increasingly clear: there are limits to what monetary policy can do to help in the short run. Fiscal authorities -– who can borrow at rock-bottom interest rates and possess tools better-suited to deliver a rapid and targeted boost — will have to finish the job.”

We find the last phrase, “finish the job,” ironic.  The money printers are destroying the dollar, while the deficit spending is destroying US solvency.

Now we will watch the show unfold.  Those that have seen it before will watch from the sidelines, having protected their wealth with gold and silver.

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The Billionaire’s First Time

Leon Cooperman Discovers Gold at the Age of 77!

Like so many of the superrich these days, Leon Cooperman has discovered gold!

The 77 year-old billionaire, senior Goldman Sachs investment veteran, and now chairman and CEO of the New York-based investment firm Omega Advisors, did just a few days ago what he had never before done in a long and successful career in finance.

“I bought gold for the first time in my life a week ago,” said Cooperman.

It was a frank assessment of today’s financial reality that brought the hedge fund billionaire around to gold.  

First of all, Cooperman seems to have spied the bubble that is the stock market.  “We were just starting to knock on the door of euphoria before the virus hit. In some respects, we’re knocking on the door of euphoria again now,” he says.

“I have a very conservative view about the market presently, because I’m worried about who pays for the party when the party is over”

The last time we wrote about Cooperman was last year, before the Corona virus hit.  He fired a shot at the Federal Reserve then, asking why the Fed was cutting interest rates and “screwing savers,” despite the US economy being in a record-long economic expansion.  

Now Coopeman is concerned about the compounding US debt, saying “Nobody’s worrying about the debt that’s being created.” 

He picked a good time to comment about the debt.  Just days ago, it ticked up past $27 trillion dollars.  Which just means that future taxpayers – maybe even your own kids and grandkids – just got a lot more debt shoved down their throats.

Actually, we’re very concerned about the unpayable US debt here at Republic Monetary Exchange.  You should be, too!  When government officials tell this isn’t time to worry about the debt, it’s time to worry about the debt!

We do our daily best to educate people about the impact of increases in the US debt.  We have reached an inflection point in which additions to the debt are being paid by central bank money creation.  

Which means higher gold prices.

“I understand the case for gold,” said Cooperman. “We’re on the way to some banana republic situation.”

We congratulate Leon Cooperman for discovering gold and welcome him among us.  Even billionaires hate to see their wealth inflated away by dishonest monetary policies.    

But remember, it’s even more important to protect yourself and your family with gold if you’re not a billionaire!   After all, if dollar devaluation strips away 99 percent of a billionaire’s net worth, he still has $10 million in purchasing power remaining.  He may not like it, but he will probably manage to get by.  But if you have $1 million, and the government destroys 99 percent of the dollar’s value, you are left with only $10,000 in purchasing power.

And $10,000 ain’t what it used to be!

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Watch Out Below!

Gold to Gain from Falling Dollar

The US dollar could fall by as much as 35 percent next year.  Thanks to the ending of its status as the world reserve currency.

That’s according to Stephen Roach.  He says the dollar is vulnerable to a sharp correction. A crash is looming, he says.

Roach is an economist at Yale University now.  Before that he was with Morgan Stanley, and with the Federal Reserve.

We wrote about Roach a couple of time last summer (see HERE and HERE) when he said that “US living standards are going to be squeezed like never before.”  

In a new article in the Financial Times, Roach writes that a shortfall in American domestic savings is going to exact a high toll.  Between 1960 and 2005, domestic savings average about 7 percent.  From 2011 to 2019, before the Covid-19 shutdown, it had fallen to 2.9 percent.  Now domestic savings has plunged into negative territory, just like it did in the mortgage and housing meltdown.

The dollar’s share of global currency reserves was 85 percent before the inflationary 1970s.  Now it is 61 percent.  And Roach says it will move lower suddenly.

Roach:

“With America’s position as the world’s dominant reserve currency slowly eroding since 2000, foreign lenders are likely to demand concessions on the terms for such massive external financing. This normally takes two forms — an interest rate and/or a currency adjustment. The Federal Reserve has recently shifted to a strategy that takes into account an average of inflation rather than a specific target, and promised to keep policy rates near zero for several more years. That means the interest rate channel has effectively been closed. As a result, more of the current account adjustment will now be forced through a weaker dollar.”

Stated differently, foreigners are not going to keep funding the US as if there is no alternative.  There are alternatives.  Shining brightly among them is gold.

Roach says that America has “squandered its exorbitant privilege.” That term, “exorbitant privilege,” refers to the dollar remaining the world reserve currency.  He’s right.  That’s why foreign central banks are replacing dollar reserves with gold.  

For our part, we will just warn that a sharp drop in the value of the dollar can happen in the wink of an eye.

That is why we urge our readers to establish their position in gold and silver for profit and protection without delay.

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Mainstream Investors are About to Pile into Gold

You know from our reports that some of the investment industry’s most conservative institutions are discovering gold.

See our commentary at the beginning of September New Faces in the Gold Spaces!  It described the Ohio Police & Fire Pension Fund decision to allocate five percent of its $15.65 billion portfolio to gold.  It also told of the University of Texas endowment fund which added a billion dollars of gold to its portfolio.

We spent more than a little digital ink of Warren Buffett’s surprising turn to gold (see HERE and HERE). 

We think this movement toward gold could soon turn into a stampede.  John Rubino agrees.  The title of this commentary Mainstream Investors About to Pile into Gold comes from an article he posted on his website DollarCollapse.com.

Rubino writes, “Money managers who don’t recommend gold to their clients are becoming the exception rather than the rule. This week saw a couple more big-name banks join the pro-gold parade.”

Rubino cites gold recommendations by leading banks UBS and Wells Fargo.  We keep a close eye on recommendations like that.  Some readers may even remember that we took special delight in Bank of America’s recent discovery that “the Fed can’t print gold like it can dollars!”

Rubino:

“Right now gold accounts for less than 1% of global investible capital. But as the above sentiment spreads throughout the mainstream investing community, typical portfolios for both individuals and institutions will contain increasing amounts of precious metals. To understand what a move from below 1% of total investable funds to, say, 5% over the next few years would mean, it’s helpful to compare the amount of capital in the world compared to the amount of gold.

“Estimates of how much gold exists above-ground are all over the place, but most cluster around an amount that yields a value of about $10 trillion at current prices.”

We recommend you see his arguments about the outsize impact of a shifting of global assets like stocks and bonds to gold can have, HERE.  

Rubino concludes his examination saying, “In a world where increasing political and financial instability makes traditional financial assets – including cash — seem unduly risky, and where gold is rising, both fear and greed might send considerably more than that into safe-haven assets.

Don’t wait for the stampede to develop.  Speak with a Republic Monetary Exchange gold and silver specialist today.

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Discovering Gold

More and more people are discovering gold, but we don’t mean discovering gold like prospectors and miners do.  What we mean is that more and more people are beginning to understand that Washington’s debt and money printing are signs of trouble, spending two dollars for every dollar in taxes and printing trillions to cover the difference. When people realize these things and look around, they soon discover that there is a safe haven for profit and wealth protections in times like these…

Gold and silver.  

A growing number of people now understand gold.  They get it.

Others just haven’t given these things much thought.  We don’t fault them.  They have work, jobs, businesses, and families to take care of.  

Frankly, the monetary system should be honest.  It should be sound, reliable.  That’s the way the founders set things up, with a gold and silver monetary system.  It would have allowed people to be able to concentrate on their work and families,

a miner shows off a gold nugget
No, this isn’t the discovery we are talking about.

But we’re in different times.  The founder’s vision for America’s gold and silver monetary system was betrayed by politicians along the way.

So here’s an open-ended invitation for you.  It’s an invitation we’re sharing on our radio messages this week as well.

If you know people who want to know more about what Washington is doing to the money, if you have friends or colleagues who need to know about gold and silver, bring them by for a conversation.  

No obligation.  Just information.

We’ll explain why owning gold is more important now than ever.  And we’ll answer all their questions, too.

We’ve helped many people discover gold and silver over the years.

We are available to help your friends and colleagues and family members, too, so bring them in or have them call to get started with complimentary consultation and portfolio evaluation.

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Warren Buffett Rotating to Gold

It is sometimes fun to check in on the rich and famous.  And to watch them learn about gold.  That’s because if they don’t learn about gold, they may not always be rich and famous.

Although Warren Buffett’s own father, who was a Nebraska congressman, was very wise about gold and its monetary merits, Warren himself has always eschewed gold.

Until last summer.

That’s when Buffett’s company, Berkshire Hathaway, began buying gold shares.  We wrote a piece about it then called Did Warren Buffett’s Dad Just Get a Whole Lot Smarter?    

At the same time, Buffett began reducing his exposure to banks.  He sold JPMorgan Chase and Goldman Sachs as he rotated to gold.

We think Buffet’s skepticism about banks is an important first step in coming to terms with today’s financial reality.  We wanted to share some of the thoughts that accompany the Oracle of Omaha’s changing outlook.

First, his observation about negative interest rates and debt:

If you can have negative interest rates and pour out money, and incur more and more debt relative to productive capacity, you’d think the world would have discovered it in the first couple of thousand years rather than just coming on it now. We will see.

It’s probably the most interesting question I’ve ever seen in economics.

Can you keep doing what we’re doing now? The world has been able to do it for now a dozen years or so [since 2008]. We may be facing a period where we’re testing that hypothesis that you can continue it with a lot more force than we’ve tested it before.

The testing of that hypothesis is drawing nearer.  It will be a painful period.  Popping financial bubbles are always painful.

Buffet modestly acknowledges that he’s been wrong about a couple of things:

“I’ve been wrong in thinking you could have the developments you’ve had without inflation taking hold.”

We’d say that Warren has been focused on looking for consumer price inflation and has not correctly identified the asset price bubble that has been the Federal Reserve’s primary objective. 

And:

“If the world turns into a world where you [governments] can issue more and more money and have negative interest rates over time — I’d have to see it to believe it, but I’ve seen a little bit of it. I’ve been surprised. I’ve been wrong so far.”

The operative words are “so far.”

And finally, these observations:

“The [US] debt isn’t going to be repaid; it’s going to be refunded.”

“You better own something other than debt.”

We observed last summer that Buffett apparently sees that central banks have lost control.  If he keeps his wits about him, Warren will soon realize that he should be buying physical gold.

Warren Buffett just turned 90 years old.  As they say, with age comes wisdom.

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Acts of Desperation

The Monetary Authorities Have Fixed Nothing, Learned Nothing

“As of the end of July, central banks had cut interest rates 164 times in 147 days and committed $8.5 trillion in stimulus.”

That is the word from a Bloomberg News story this week, “How Unconventional Monetary Policy Turned Conventional.”

The unconventional has become conventional, eh?  The account describes temporary emergency measures becoming long-lasting.

It’s not hard to read between the lines of this kind of stuff.  It means that the steps the authorities have taken to deal with a crisis didn’t work.  Nothing was cured, except that the patient became addicted to the medication.

Bloomberg:

“As this graphic from Bloomberg shows, most central banks are diving deeper into the unknown. The Fed is buying different types of bonds, the ECB is getting creative with negative interest rates, and Australia has adopted Japanese-style efforts to control bond yields.

“With the global recovery still uncertain and the virus set to leave scars on employers and employees, the likelihood is that monetary policy will stay ultra-loose for years to come — even if that means central banks artificially propping up markets or sparking a run-up in prices.”

The story goes on to describe additional steps central banks may take, “of formerly fringe notions gaining in prominence.”  It specifically mentions Modern Monetary Theory (MMT) among them.

We have described MMT many times including in April, MMT and Helicopter Money.  We wrote then that “MMT is all the rage.  Academics who should know better (and they would know better if they had studied historical schemes like John Law’s Mississippi Bubble debacle three hundred years ago) are climbing aboard.  And politicians, many of whom will subscribe to any scheme that allows them to promise to give things to people and get re-elected, are falling all over themselves to sign up.”

There are other acts of desperation afoot.  Just last week we wrote that “Fed economists and officials are hunched over their drawing boards designing different ways to insert freshly created digital money directly into citizens’ (and perhaps even non-citizens’) accounts.”

The US fiat monetary system is beginning to fail.  The people don’t yet notice it, although the authorities are turning to increasingly desperate ideas to keep it together. But acts of desperation are almost always ill-considered and seldom successful.

Eventually everyone will recognize these acts of desperation.  Those that do so now are investing in gold and silver.

You should consider contacting us if you are among them.

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You Can See What’s Coming!

Secure your Wealth with Gold and Silver

Take a look down the road.

Financial… political… social instability.  

You can see what’s coming.  It’s much easier to see how thing come apart than how they get put back together.  

We have a bruising fight over a Supreme Court vacancy, a battle that may well be uglier than any we have seen so far – and they have been brutal.

Somewhere around half the people are going to be very unhappy with the outcome of the presidential election.  Battalions of litigators are gathering to challenge the outcome of a November election, almost assuring the outcome won’t be settled for weeks if not months.

Many of America’s major cities are governed by people who believe that looting and arson are part of “mostly peaceful protests.”  These “anarchist jurisdictions” are governed by people who want to defund the police.

The productive classes that pay the taxes are fleeing New York, Los Angeles, San Francisco, and other cities.  And it is not just the rich.  Look at U-Haul rental rates for people who move themselves.  The demand is so great to leave California that it costs ten times more to rent a truck to go from Los Angeles to Phoenix than from Phoenix to LA.

The departure of the wealthy and the middle class will exacerbate gaping budget deficits in the cities they leave behind.  That means less revenue to placate tax-consumers.  

Which means more urban disorder.

We spend a lot of time writing about the fraying of our economy and monetary system, but the economy and the monetary system don’t decay in isolation.  Their decay reflects the same state of mind – characterized by a rejection of the achievements of Western civilization and personal responsibility – that is behind our social unraveling.  

“Triage” is the medical term for sorting out the patients in an emergency for the urgency of their conditions and need for treatment.  Our national emergency is not a medical one (yet), but we are each in triage situation nonetheless, one in which we must prioritize our needs for the rough road ahead.  

Here at Republic Monetary Exchange, we believe protecting your wealth is of the highest priority.  It is a priority because many other needs are utterly dependent on the wealth it takes to secure them.  If you are reading the signs of the times, you know you need gold and silver to secure your wealth.  

The writing is on the wall.  It’s time to invest in gold.

Stop by Republic Monetary Exchange today or call and speak with one of our gold and silver professionals.

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More Funny Money

“Wealth cannot be created by creating debt and money.” – Ray Dalio

Federal Reserve Chairman Jerome Powell testifying in Washington, and other Fed officials running around the country, are of one voice calling for more Washington stimulus spending.

Spending of money which Washington doesn’t have, by the way.  But not to worry, the Fed will just print the money anyway.  

Makes you wonder why not cut out the middleman.  Either the Capitol Hill spenders should go and just let the Fed spend the money it prints, or the Fed should just go and let Washington print the money they spend as they go along.

Don’t laugh.  That’s the basis of Modern Monetary Theory that is quickly becoming de facto policy in Washington.  It even presumes taxes aren’t even really a necessity for revenue.  Taxation is to be used primarily for social engineering: driving people like cattle to do what the authorities want them to do.  

But as far as revenue goes, taxes aren’t key to MMT.  The theory holds that the government can just print whatever it needs.

Which is what they have been doing all year.  So we have arrived.

Meanwhile, Fed economists and officials are hunched over their drawing boards designing different way to insert freshly created digital money directly into citizens’ (and perhaps even non-citizens’) accounts.

One plan involves the creation of something called “recession insurance bonds.”  These could be deposited in people’s accounts in advance, whereupon, with the flip of a switch when the Fed deems it appropriate, they could all be activated.

Voila!

Instant deposits at the time and place of the Fed’s choosing.

Another scheme calls for every American to have a bank account at the Fed.

Cleveland Fed president Loretta Mester explains, “Legislation has proposed that each American have an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.”

You can read more about such plans in the article from the website ZeroHedge.  

There is a madness afoot in the land.  Like some weird and very specific economic Alzheimer’s, those afflicted have totally forgotten that wealth in created by production, by goods and services.  So they dodder their way into the national debate thinking that they can create wealth with the wave a digital accounting wand.

As long as this malady persists, we recommend you buy gold and silver as fast as you reasonably can.  This dementia will ruin the dollar and America’s economic vitality along the way.

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The Days Ahead

“Fasten your seatbelts!” 

“Please keep your hands and arms inside the monorail at all times.”

“Should the cabin lose pressure, oxygen masks will drop from the overhead area. Please place the mask over your own mouth and nose before assisting others.”

Okay, we’re just trying to set the tone for the next couple of months.  There’s some bad road between now and the end of the year.  That’s because the American divide is as sharp as ever.

  • There will be a bruising battle over the Supreme Court vacancy, one that could very well make the confirmation of Justices Thomas and Kavanagh look tame.  Commentator Glenn Harlan Reynolds wrote in USA Today this week that “When your political system can be thrown into hysteria by something as predictable as the death of an octogenarian with advanced cancer, there’s something wrong with your political system.”
  • Already hordes of lawyers, protestors and ruffians are lining up in precincts and states across the land to drag out the presidential election.  Those who remember the 2000 Bush-Gore contest know that the presidency isn’t necessarily decided on election day. To say that we could face a Constitutional crisis is to understate a grim outlook.
  • We haven’t seen the end of the “mostly peaceful protests,” and uncontained street violence in our major cities, and expect them to continue for some time.  Postal workers in Chicago where mail carriers have been shot are threatening to stop mail deliveries.  “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds,”  but barbarians can even stop the mail.
  • Battle lines have been drawn in the Covid lockdown divide, and at least in some places, things are about to come to blows. Notice for example that in England the military is being call in to help enforce lockdown restrictions.

And then there are the economic issues, unknowns about the recovery and knowns about the mushrooming debt and the rampaging Federal Reserve. 

Our point is this: troubled times makes gold more desirable.  They make the price go higher.

Watching the dollar bounce higher has created a correction in precious metals prices, and an opportunity to buy at prices from a few months back.  But the dollar bounce has done nothing alter the fundamentals of deficits and debt.  And it will not ease the social conditions that threaten us.  

We’ll leave you with a few recent price forecasts, none of which explicitly take into consideration highly volatile social conditions in the US.

Last week we told you about the forecast from a senior Bloomberg Intelligence Commodity Strategist who expect to see gold at $7,000 by 2020.

Mike McGlone says that gold in on an even more sound footing for higher prices that it was “at the onset of the 2001-11 and post-financial-crisis bull markets.”

As a friend reacted to the forecast. “That’s more than a thousand dollars a year” in gains.

That’s right.

Another observer, Yeoh Choo Guan, UBS head of Asean Global markets, sees gold trading between $1,850 and $2,100 next year.  Despite the perhaps intentionally understated forecast, Yeoh said on CNBC, “We are very bullish on gold. We think that the prices will go higher and what is interesting is we think it will stay higher for longer than expected.”

Finally a longer term and higher price projection.  Charlie Morris is an investment manager at UK-based Atlantic House Fund Management.  He sees a combination of interest rate and inflation factors driving gold to $7,345 by 2030, with a market performance similar to the inflationary 1970s. 

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Debt Out the Wazoo=$7000 Gold?

From a dizzying array of news and information at our fingertips, we have ch0sen the following as among the most important and interesting for our friends and clients.

$7000 GOLD BY 2025

Senior Bloomberg Intelligence Commodity Strategist Mike McGlone makes the case for $7,000 gold not too far down the road.  

In a series of tweets, McGlone says that the fundamentals for gold are even better now than in the powerful bull market run from 2001 – 2011.

Here are some of the analyst’s recent tweets about gold:

9/4:  “The conundrum of monetary and fiscal stimulus lifting most assets may be nearing an inflection point, where the increasing certainty of QE and budget deficits firm gold’s foundation more.”

9/14:  “Rising gold prices, despite declining managed-money net-longs and an advancing dollar, are a sign of the strengthening foundation under the metal. Less speculation vs. more organic demand forces are at play for the store of value, which indicates a healthy bull market.”

9/15:  “Gold Set for $7,000 in 2025 If Trends Stay Friendly Like 2001-11: Gold is on sounder footings than at the onset of the 2001-11 and post-financial-crisis bull markets, warranting a rhyming rally, in our view.”

DEBT OUT THE WAZOO!

Take a good look at this chart of the spiking US debt from WolfStreet.com.  

Now closing in on $27 trillion, the debt grew by $3.3 trillion under six months of the COVID-19 lockdown.  

Besides the trajectory of the debt itself, take note of the periods that government spending was under a statutory debt ceiling.  The debt ceiling is popular with the people, but in practice it is nothing but more political bunkum.  Over and over agian, Washington has made the debt ceiling simply a brief interruption in its ever-growing spending, a ceiling quickly suspended and quickly surpassed.

DAVID STOCKMAN SPEAKS

“Washington has become disconnected from any semblance of fidelity to sound money and fiscal rectitude, while Wall Street has turned into an outright casino, valuing stocks based on endless Fed liquidity injections and the delusion that momentum chasing is an investment strategy.

David Stockman

“With respect to the rampant folly in the Imperial City, Treasury Secretary Stevie Mnuchin has always reminded us of Alfred E. Neuman of ‘Me Worry?’ fame at Mad Magazine. But recently he more than earned that moniker when in the context of the current monetary and fiscal lunacy he proclaimed that, ‘Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet.’…

Wall Street is beguiled, says Stockman, by “stimulus” and “hopium,”  Hence, “nosebleed stock prices.”

His advice?

“Buy gold and either forget or (if you are courageous) short the rest.”

$1 BILLION-PLUS RIOT DAMAGE MOST EXPENSIVE IN HISTORY

The news site Axios reports, “The vandalism and looting following the death of George Floyd at the hands of the Minneapolis police will cost the insurance industry more than any other violent demonstrations in recent history.”

Property Claim Services, that tracks insurance claims classifies anything over $25 million in insured losses as a “catastrophe.”

We’re confused.  How could what the media told us were “mostly peaceful protests” end up doing $2 billion or more in damage?

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Fed Policies Bullish for Gold

Nobody ever said economics is funny, but this was enough to make a dog laugh!

Because they can’t be serious, right?  

Right?

The Federal Reserve released a policy statement and economic projections Wednesday (9/16).

The Wall Street Journal captured the absurdity of it all in a headline: “Fed Signals Interest Rates to Stay Near Zero Through ​2023.”

Through 2023?  That’s more than three years.  

The Fed can’t project GDP right for the next quarter, and they’re telling us what they’ll do with interest rates for the next three years?

Are there people who believe this stuff?

During the last stagflation period, the Fed changed rates constantly—twenty-two times in 1973 alone, twenty-three times in 1978.  Who knows what kind of volatility awaits us in what we called in an earlier commentary “The New Stagflation Decade”?

The latest announcement is part of the Fed’s “forward guidance” policy, to goose the markets by telling them what it will be doing down the road.

WSJ:

“The latest Fed projections show that even by the end of 2023, most officials believe inflation will only have begun returning to 2% and that unemployment will begin nearing levels that prevailed before the crisis struck in March.”

This is its first meeting since the Fed raised its inflation targets.  In this case the Fed is doubling down on its commitment to a future of inflation.  It consists of:

  1. The higher inflation targets that it announced last month, and;
  2. Now the promise of this higher inflation for a longer period of time.

So that’s the monetary side of affairs.  What about fiscal policy?

Treasury Secretary Mnuchin’s piped up on CNBC a few days earlier advising the Fed and Congress that “now is not the time to worry about shrinking the deficit and the Federal Reserve’s balance sheet.”

Believe us, almost nobody in Washington on either side of the aisle is interested in “shrinking the deficit.”  

So, we are watching the marriage of extreme monetary and extreme fiscal policy; of prolonged negative real interest rates, and skyrocketing government debt.

Now, if you wanted to engineer higher gold and silver prices, much higher, you would have the Fed provide artificially low interest rates for a prolonged period and have Washington explode the debt.

I guess you see where this is going, right?

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The Government is Already Broke!

The US government isn’t going broke.  

The US government is already broke.

This is a little hard for most people to swallow.  After all, America is thought to be a rich country.  The government is huge.  We pay a lot of taxes.  How can the government be broke?

But it is broke nonetheless.

The US has defaulted on its obligations before.  After World War II, the US persuaded the nations of the world to go on a dollar standard, to hold dollars in their own reserves, to issue their local currencies against their central bank dollar holdings, to settle international accounts and global commerce is dollars.

Part of the deal was that they could always exchange the dollars they held in this arrangement for gold at the rate of $35 an ounce.  

But the US printed ever more dollars, issuing dollars far beyond the amount of gold it had to back them up.  It was like writing checks without enough money in the account to cash them.

It didn’t take the rest of the world too long to figure out they were being flimflammed.  They lined up to get their gold, but in the summer of 1971, President Nixon defaulted and stopped redemptions entirely.  

The US government could not meet its obligations.  It defaulted, plain and simple.

It is happening again now, but in a different way.

The Congressional Budget Office says that US trust funds – including the Highway, Medicare, and Social Security Trust Funds – will run out of money sooner than anticipated.  

Way sooner.  The last time we wrote about it, in April 2019, the Social Security Old-Age and Survivors program’s insolvency date had just been advanced to 2035.  Now it has been moved all the way forward to 2031.

The Committee for a Responsible Federal Budget says, “These earlier depletion dates are driven by declining gas tax revenue as a result of reduced driving, declining payroll tax revenue as a result of higher unemployment and lower wages, lower interest rate payments on trust fund reserves, and more disability applications — all stemming from the current public health and economic crisis.”

All that evades the larger point:  There is no trust fund.  The money to fund those future Medicare and Social Security payments was never secured.  It was spent.  So those funds and their insolvency dates are an accounting fiction.  

By one account, the US has made $200 trillion in unfunded promises, including these unfunded “trust funds.”  That’s more than the State can ever hope to pay. It will default on those payment, just as it did in 1971.  

Printing money is a form of default.  It means not honoring the real value of debts, by faking the currency, devaluing it in a pretense of meeting its obligations.  It is dilution, just like someone watering down the whiskey, the wine, or the gasoline.  That is the most likely means of default the State will choose.  It will destroy the dollar. 

The price of gold is a referendum on the future value of a currency.  The dollar price of gold is a referendum on the future value of the dollar.  As US debt continues to mount, this referendum on the market value of the dollar is not good.  For the dollar.

It is very good for the price of gold.

People around the world – dollar holders who believed the dollar was as good as gold – suffered staggering losses when the US defaulted in 1971.  

Before the next US default becomes evident, we recommend you revisit your investment and retirement plans, with the objective of protecting yourself with gold and silver now.  Republic Monetary Exchange professional are standing by to show you how our best practices are designed to serve you and your objectives.

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The New Stagflation Decade

If you’re old enough to remember the 1970s, then you remember the Stagflation Decade.

If you’re not old enough, ask your parent or grandparents about it.  

“Stagflation” is one of those made-up words, a portmanteau, as they are called, that combine two different words together to express something new.  Like “Brexit” to describe Britain exiting the European Union.  Or “sheeple,” combining sheep and people.

So stagflation married two descriptive terms for the economy together:  stagnation, referring to stagnant, low- or no-growth economic conditions; and inflation, used to describe a period of rising or even runaway price increases.

The funny thing is that they had to make up a word to describe those conditions together when they appeared in the 1970s.  There was no such word at the time because the big government economists of the day, the Keynesian spend-our-way-to-prosperity economist who were everywhere, believed that stagnation and inflation together was an economic impossibility.  

If the economy was stagnating, they believed, then the central bank would just print gobs of new money and – presto! – full employment.

So that’s what they did in the 1970s.  They printed money.  Boy, howdy, did they print money!  Prices took off.  And the economy stood still.  And began to shrink.

Despite the fact that inflation reached 12.3 percent in 1974, economic growth was negative that year and the next, while unemployment rose to 8.2 percent. 

“That’s impossible!” screamed the Keynesian big government economist.  “Print more money!”

And they did.

By 1979, the inflation rate was 13.3 percent.  

And a world-changing gold and silver market was the result.

Now, this may seem like ancient history for anyone who was too young to remember or wasn’t yet born.  But we aren’t here to discuss periods in history at random.  Our assignment is to help our friends and clients protect themselves, their families, and their wealth.

That’s why we want you to be on the lookout for the growing signs that this will be a new and much more severe stagflation decade.

And that means much higher gold and silver prices.

Here’s a chart that helps illustrate our point.  It covers the last 15 years, showing the growth in the money supply (M2) in green, and the growth in Federal Reserve assets.  That represents the total amount of things like bonds that the Fed has purchased with made-up, unbacked, freshly “printed” digital money.

In the above chart, you can see that the money supply (in green) has grown from about $7 trillion to more than $18 trillion over the period.  Fed assets have risen from less than a trillion dollars to $7 trillion.  

One more thing.  The shaded areas represent recessions, periods when the nation experienced negative economic growth.  The first shaded area is the Great Recession in the housing bubble calamity of the 2007-2009 period.  

The second shaded area is the depression we are in right now.

Despite our bankruptcies, businesses closing, unemployment, delinquent mortgages, and other payments that are in arrears – in other words, despite our stagnation – all that money-printing and money supply growth are driving consumer prices higher.  

And now the Fed has decided to raise its commitment to more inflation, just as prices have already started climbing.  The consumer price index increased 0.4% last month.  That’s after increase of 0.6% in both June and July.

And they said it couldn’t happen!   But it sure looks like we could be in a brand, new stagflation decade.  One much bigger than the one your grandparents remember.

That means that this gold and silver bull market will be much bigger as well.

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Three Things Every Gold Investor Needs to Know

Reasons for Higher Gold, Echoes of the Last Stock Bubble, and China Stocking Up!

As gold continues to consolidate its remarkable 2020 gains and build a base for its next leg up, we’ve spotted three things that help provide a window on what’s ahead.

Number 1:

First, we’ll share the fundamental observations of a Bloomberg analyst who sees the possibility of gold reaching s high as $2,583 in 2021.  

Bloomberg Intelligence’s Eily Ong:

“Gold consumers’ adjustment to a higher price for the metal, along with greater investment demand, is a recipe for the precious metal’s potential price acceleration in 2021.  

“Market sentiment for gold is likely to strengthen on dollar wobbles amid rising geopolitical risks in a lower-for-longer interest rate environment. Central banks and investors may absorb the market surplus as they seek gold for portfolio diversification and possibly as a hedge if inflationary pressures return on the substantial stimulus measures injected amid the global health crisis. …”

We speak “analyst,” so let us translate.  Basically she is saying a weak dollar in a dangerous world, and prolonged interest rate repression by money-printers and central banks moving to gold to protect themselves from inflation and continued money-printing are reasons for higher gold prices next year.

That’s right, as far as it goes.  

She might have thought to mention, as another analyst did, that “a globally synchronized currency devaluation is coming.”

Number 2:

In our last post, we mentioned Stanley Druckenmiller’s comments on CNBC this week in which he said he expects the annual inflation rate to rise to as high as 10 percent in the years ahead.  

One more thing from his comments that we’d like to get on the record.  He took aim at the Fed and Chairman Powell and their massive money creation driving the current stock market bubble, by reminding viewers of the previous bubble, the housing bubble engineered by Alan Greenspan: 

“And I just want all you guys cheering him on to remember the Maestro in 2005, and how that worked out.”

“Look, everybody loves a party, but inevitably, after a big party, there’s a hangover, and right now we are in an absolutely raging mania.” 

Number 3:

And finally, you know how Communist regimes love their five-year plans.  Lenin and Stalin made them a daily part of the failed Soviet economic life.

Now we have a peek at China’s next five-year plan, beginning in 2021.  It calls for China to stockpile commodities in amounts sufficient for any crippling supply disruptions.

The plan calls for building its reserves of oil, agricultural commodities, and strategic metals.  

China’s interest in amassing gold reserves is already well-known.

The commodities boom that began in 2000 was primarily driven by China, along with other BRIC nations.  

It was a powerful component of the bull market that lifted gold and silver prices to all-time highs in 2011.  

Here we go again. 

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Something Does Not Compute

You might very well have had a conversation like this recently:

“How can the stock market be at an all time high when the economy is in the tank?  With all this unemployment?  All these people out of work?  All these unpaid mortgages and commercial leases?  With all these bankruptcies?”

“How can the economy be in a depression and stocks are at an all-time high?  It doesn’t make any sense.”

We think you are right.  It doesn’t make any sense.  Except in one very specific and dangerous way.

It only makes sense if the stock market has been ignoring the real economy and is relying instead on endless money-printing support and interest rate manipulation by the Federal Reserve to keep the indices high.

Only then does it compute.  But if that is the answer, then it is obvious the Fed is the towel boy of Wall Street.  

And the hell with the Main Street economy.

But ultimately, the stock market cannot be decoupled from Main Street.  Now there are unmistakable rumblings in the stock market that reality may be about to assert itself.

CNBC summed up the action:  “Stocks fell sharply on Tuesday as another massive drop in tech put the Nasdaq Composite in correction territory and led to the S&P 500’s worst three-day stretch in months.”

Amid the wreckage was Tesla, falling 21 percent on Tuesday.  S&P declined to add the upstart automaker to its S&P 500 index.

Despite the bounceback that followed, is Nasdaq’s ten percent decline a warning that the Fed’s bubble machine is breaking down?  

The legendary hedge fund manager Stanley Druckenmiller says that “the merging of the Fed and the Treasury, which is effectively what’s happening during Covid, sets a precedent that we’ve never seen since the Fed got its independence.  It’s obviously creating a massive, massive mania in financial assets.”  

It will end badly, he says, forecasting inflation rates of 5 – 10 percent in the years ahead.

Druckenmiller is among the Wall Street “smart money” we wrote about back in May who had been buying gold. That turned out to be a good move then.

And it’s a good move now.   That’s because Fed officials, including Chicago Fed President Charles Evans, are signaling that more monetary easing is coming.  That will fulfill Druckenmiller’s forecast.  The more they do to levitate the stock market, the higher gold will go.

Why not avoid the rush?  Contact your Republic Monetary Exchange professional now.

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Is a COVID Food Crisis Next?

Maybe the Fed could arrange to jack up prices while so many American families are already just squeaking by!

The Fed wants to raise the cost of living.

We called your attention last month to the decision by the Federal Reserve to run inflation hotter.  See Fed: More Inflation Please! and Gold Just Became an Even Better Investment.

You’ve probably heard the expression from the Napoleonic era in France, “It was worse than a crime – it was a blunder.”

The Fed’s decision is likely to go down in history as worse than either.

A Bloomberg story reports that the COVID shutdown already has million of Americans in a food crisis, one that it says will now draw in additional millions: 

“The ranks of Americans fighting hunger are projected to swell some 45 percent this year to more than 50 million.”

“Lockdowns have snarled supply chains, and food inflation is projected to rise at the fastest pace in almost a decade.”

Yet the Fed want consumer prices to go up?

Maybe someone on his bloated staff, someone among the hundreds of economic bureaucrats the Fed employs, should tell Chairman Powell that food prices are starting to race higher.   In July, core consumer prices took their biggest jump in almost 30 years.  Now, the UN’s Food and Agriculture Organization has just reported that world food prices rose for the third consecutive month in August.  The price hikes were led by increases in coarse grains, vegetable oils, and sugar.  

But of course, the Fed misses everything, just like it missed the housing bubble.  So they’ll go ahead and print more money, and make the dollar worth less.

By the way, ever higher food prices will be just one of the consequences of the Fed’s inflation policy.

Another will be a growing unwillingness of foreign governments to fund America’s debt.

Reuters is covering an account in the Global Times, a Chinese government backed paper, that predicts China will step up its de-dollarization.  Trade issues and military shoulder-bumping between the US and China in the South China Sea are important considerations for the prediction. 

But the solvency of the US is another concern.

Reuters:

“Another reason the state newspaper cited was the potential default risk in the United States as the debt of the world’s largest economy has surged sharply to about the same size of its gross domestic product, a level not seen since the end of the World War Two and well above the internationally recognized safety line of 60 percent.”

China is one of America’s leading creditors.  It owns $1.074 trillion in US Treasury debt instruments.  A loss of a creditor of that size, or even a significant drawdown, will result in the Fed having to step in to fill the gap with printed money.  

And that means more inflation than Powell envisions.  As we have said before, the Fed has painted itself in a corner.  It has contradictory objectives.  It has to keep interest rates low to support Wall Street.  But it has to keep foreigners funding US debt.  

Those are both hard to do when it says it is going to let inflation run hot.

Isn’t it time to invest in gold?

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Silver Does it Again

Silver Has Outperformed Everything!

The latest results are in.  Through the month of August silver remains the top performing major financial asset for the year 2020!

Not only is silver ahead for the entire year, it outperformed other assets once again in the month of August.  That makes two months in a row that silver has been the top performer.

Deutsche Bank tracks the total return performance of major global financial assets.  Its report for August show silvers with a 15.4 percent gain for the month.  

Silver outperformed second-place finisher Nasdaq by more than 50 percent.

For the entire year 2020, silver posted an increase of 57.6 percent.  

After surging to a new all-time high over $2,000 at the beginning of August, gold corrected slightly as the month went on, moving -0.4% lower.  Even so, gold continues trading above its previous all-time high of $1,923 set in 2011.

The US dollar fell to a two-year low in August.  That’s five consecutive months of dollar losses.

For added perspective on the bull market underway, here are five-year price charts for both silver and gold.

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New Faces in Gold Spaces

We’ve Spotted a New and Important Trend!

We commented last month about gold skeptic Warren Buffett’s turn toward gold (see HERE and HERE).  It was a surprise move, but one we found very telling.

Now there is another face in the gold space, one that we find equally significant.  Last week the Ohio Police & Fire Pension Fund decided to allocate five percent of its $15.65 billion portfolio to gold.  

It’s the early evidence of a trend.  

Public pension funds are not thought of as pioneers.  They are generally conservative, traditional stock and bond investors.  

But apparently their advisors and board members are, like Buffett’s Berkshire Hathaway, reading the signs of these financially trouble times.  

That’s why they have turned to gold. 

College endowment funds are much like public pension funds.  But some years ago, the University of Texas took the plunge.  The University of Texas Investment Management Corporation, one if the nation’s largest college endowment funds invested a billion dollars in gold bullion.  It bought 6,643 gold bars, storing them in some underground depository in New York.

Good move.  There average price was much lower than today’s price.  

Texas legislators wondered why Texans’ gold should be held in New York. It’s the same thing that foreign nation gold owners like Germany had begun wondering.  They started having their gold shipped home from places like the US and London.  Everyone was too polite to say it was a matter of trust, but they brought their gold home anyway.

So, without saying anything about trust either, the Texas legislature decided to build a depository in Texas.  Now the Texas Bullion Depository is open, with a gold capacity of more than $100 billion and security said to rival that of Fort Knox.

It’s a trend.  Gold is becoming much more important to people everywhere as well as to foreign governments.  They all wisely want it in their own possession.  Gold is becoming much more important to central banks as we have reported on repeatedly.  

So now its Berkshire Hathaway.  And public pension funds.  It’s a sign of the times.  More and more people are recognizing that the US is actually facing solvency issues.  For the time being, the Fed has been able to fill the budget gap with money-printing.  But there is a cost to that kind of legal counterfeiting, too.  

It will show up before long in the value of the dollar and a reluctance by foreign nations to keep funding US debt.

If you have not yet investigated the reasons for this new move to gold, we invite you to contact us at Republic Monetary Exchange.  One of our gold and silver professionals with be happy to spend time with you, describe what is behind this new trend, and answer all your questions.

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how to invest in gold silver

Gold Just Became an Even Better Investment

You Can Thank the Federal Reserve!

Gold, alluring enough in the age of a $27 trillion federal debt, just became even more important for people seeking to prosper and protect their wealth from the breakdown all around them.

Inflation in the US is going to run hot.  Not as an accident.  Not by surprise.  

As we wrote the other day, the Federal Reserve actually intends to let inflation run hot.  

Fed Chairman Jerome Powell made in official last week at the central bankers big (virtual) Jackson Hole, Wyoming conclave.   

The Fed wants more inflation.  It’s a unanimous decision.  

Let’s see now… The Fed arbitrarily selected a two percent annual inflation rate way back in 2012.  It’s a target the Fed couldn’t hit for years.

So now it has raised its sights.  No wonder gold took a big jump.  

One analyst responded to the Fed’s new policy with a headline that says, “This Has To Be A Joke, Because If It’s Not…” 

But it’s not a joke.  Jeffrey Snider, Alhambra Investments, writes:

If you aren’t distracted by the shiny wrapping, you realize what Powell’s saying is that after failing to hit the inflation target for over a decade he’s now going to let inflation run over the target none of them could hit because for more than a decade no one could hit their own target.

Another described the Fed move as being like “an awful echo of the end-days of the former Soviet Union.”

Michael Every of Rabobank explains:

There were some planet-sized brains among the apparatchiks running that place. The problem was that the entire system didn’t work, and any tinkering with it could never achieve anything: the political-economy had to change, or nothing did. As a result, time after time, committee after committee of technocrat PhDs would meet, debate…offer up more agitprop jargon, and decide to build a new statue of Marx or Lenin.

Another headline reads, “Fed’s New Policy Will Compound Its Errors.”

That’s the view of Michael Shedlock at Global Economic Trend Analysis:

Inflation is under two percent because the Fed ignores housing prices, employer health care costs, education, and stock market bubbles.

The idea that one can offset errors by further errors in the other direction is pure nonsense.

It’s as if a doctor said, “For the last three months we gave you too little medicine so for the next three months we will give you too much.”

Our own observation the other day was that this is another case of spectacularly bad Fed timing, since core consumer prices in July already showed their biggest increase since 1991.  

Just how bad is the timing?  A couple more items in addition to those in our last post:

  • Americans are already hurting for cash. The Wall Street Journal reports that grocery shoppers are cutting back on their spending.
  • The FHA insures 8 million mortgages.  In July, 17% were delinquent in July.  That is the highest rate in FHA history.
  • Since the middle of March, more than 58 million Americans have filed new unemployment claims.  

And now the Fed wants higher prices?  It intends to keep interest rates low to generate higher inflation.  But higher inflation is the entrée to higher interest rates.

They have really painted themselves into a corner.  

The single best thing you can do is to buy gold and avoid this comedy of errors.  Speak with a Republic Monetary Exchange precious metals professional today.

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Fed: More Inflation Please!

Spectacularly Bad Fed Timing… As Usual!

They’re going to put the pedal to the metal on the money printing presses.

Federal Reserve Chairman Jerome Powell has broken the silence – it wasn’t very good silence; everybody knew it was coming.  The cronies always know what the Fed is going to do in advance, anyway – and announced that is not going to be bound by its long-standing two percent inflation target.

Jerome Powell

The Fed’s Open Market Committee has unanimously agreed to suspend the old target.  It will be replaced by something called flexible Average Inflation Targeting (AIT).

Basically, the Fed intends to let inflation run hot.

It’s another textbook case of spectacularly bad timing.  You may remember Alan Greenspan’s Fed and their serial rate cuts that fueled the housing bubble.  Even when the signs were abundant that a bubble was building, they kept at it.  

Now Powell’s Fed wants to crank up inflation at the precise time that consumer prices are already headed higher. Core consumer prices in July showed their biggest increase since January of 1991.  

Consumer price inflation typically lags the Fed’s new money printing – at least at first.  And it has engaged in world record money printing.  Now before the results of its past actions are assimilated, the Fed is going double-down.  

inflation pushing down what the dollar buys

You may wonder who exactly wants higher prices.  Especially now.  Many families are just squeaking by.  

Americans have $21 billion in unpaid rent.  27 percent of Americans didn’t make their rent or mortgage payments last month.  Bankruptcies are at a ten year high, and more are anticipated.  

And the Fed wants higher prices?  That’s right.  Time to beef up your gold and silver holdings!

The Fed has long wanted out from the two percent policy.  It has long wanted much higher inflation.  Now we’re going to get it.  

Good and hard.

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Warren Buffett is Running from the Banks

Warren Buffet didn’t just move toward gold.  Warren Buffett moved away from banks.  

Good moves both.

As we reported last week, (Did Warren Buffett’s Dad Just Get a Whole Lot Smarter?), Buffett’s Berkshire Hathaway has purchased $563 million in shares of Barrick Gold, the world’s second-largest gold miner.  

It’s a start.

Next, maybe the ghost of Warren’s father will whisper in his ear something about counter-party risk.  Then Warren will start buying physical gold.

That could be next, because Warren is growing skeptical about banks.  

But in the meantime it’s a step in the right direction. 

Berkshire Hathaway sold billions of dollars of JPMorgan Chase stock in the second quarter, liquidating 35.5 million shares of the largest American bank.

The company likely took a loss on its JPM holdings according to Wall Street on Parade.

Buffett, who had also dumped 84 percent of his stock in investment banker Goldman Sachs, sold the rest of his shares, 1.8 million, in the second quarter.  

What would prompt “the Oracle of Omaha” to slash his bank holdings, even taking a loss on them, while adding a large precious metals component to his portfolio?  It is an important question.  Particularly because nothing characterizes Buffett’s philosophy more than “buy and hold.”

We think the answer can be found in Buffett’s own words: “When the tide goes out you find out who’s been swimming naked.”

Well, the tide is out.

With people unemployed, unable to pay their rent and mortgages, businesses shuttering and unable to pay their leases, developers and real estate tycoons unable to pay their loans, someone, somewhere will be left holding the bag.  We think that if you trace the cascading defaults upline, it is financial institution, banks, and pension funds that will eat the losses.

Wall Street on Parade:

“One of the things that could be spooking Buffett when it comes to JPMorgan Chase is the unquantifiable risk in its derivatives book. This is, after all, the bank that famously lost $6.2 billion of its bank depositors’ money in its London Whale derivatives scandal of 2012. Buffett has previously dubbed derivatives ‘financial weapons of mass destruction.’

“According to the regulator of national banks, the Office of the Comptroller of the Currency, as of March 31, 2020, JPMorgan Chase had the largest exposure of any U.S. bank to derivatives. Its notional exposure (face amount) was $59 trillion. The bank with the second largest exposure was the Goldman Sachs bank holding company, at $47.7 trillion.”

Now, doesn’t a move out of naked financial institutions and into gold make sense?

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More Breakdown

We have been pointing out that the breakdown that is taking place in American life is also at work crashing our monetary system.

The signs of civic breakdown are all too visible.  Some of it, but by no means all, shows up on TV.  More can be seen on the Internet:  thugs and mobs assaulting, beating, and killing innocent people, burning cities, smashing plated glass storefronts, and swarming in to steal everything in sight.  

Some of this lawlessness and decay in action you have to be quick to see before the social media big brothers take it down.

Even with their overt concealment of the facts, it is clear streets in America’s major cities have turned into encampments for addicts and the homeless, and looting and arson have taken the place of law and order.

Murder rates have skyrocketed in large cities.  No wonder there is an exodus from California’s once magnificent cities San Francisco, Los Angeles, and San Diego.  So many people are leaving New York that overloaded moving companies are turning away business.

But our point is that while much of this social breakdown is visible, the same destructive something-for-nothing and spend-your-way-to-prosperity policies are like termites eating away at our monetary system.  

And why not?  The same interventionist, big government philosophy is at work in our civic and our financial lives.  There the major signs are to be found in exploding federal debt and the crazed Federal Reserve money printing.  There are additional symptoms wherever you look.

Items:

Wall Street Journal:   Ending a series of weekly declines, new applications for unemployment benefits unexpectedly rose by 135,000 in the week ended Aug. 15, one of a number of signals that the economy isn’t close to being out of the woods. 

Michael Shedlock, TheStreet.com:  Serious mortgage delinquencies soar to a 10-year high.  Some 376K homeowners became 90 or more days past due in July. Serious delinquencies were up 20% from June and are now the highest they’ve been since early 2010. In total, serious delinquencies are now 1.8M over pre-pandemic levels.

John Cox, Real Clear Policy:  Californians pay an average of 55.8 percent more for their residential electricity than other Americans, thanks to a politically mandated shift to higher priced, less reliable forms of energy.  Not only have ratepayers had to endure artificially high electricity bills, but while sheltering in place amid triple-digit temperatures, they’ve also had to endure a recent plague of blackouts.

RTTNews:  U.S. consumer price growth exceeds estimates In July.  Core consumer prices showed their biggest increase since January of 1991, partly reflecting another jump in prices for motor vehicle insurance, which skyrocketed by 9.3 percent in July after spiking by 5.1 percent in June.

Wall Street Journal:  The stock market and economy appear increasingly disconnected. Part of the reason for the divide: The share of Americans who own stock, either directly or through retirement or mutual funds, is falling, and stock ownership is increasingly concentrated among a sliver of the population. The top 10% of Americans by wealth owned 87% of all stock outstanding in the first quarter, according to data from the Federal Reserve. That share has grown over the past decade, from 82.4% in 2009.

Paul Krugman New York Times:  The first thing to note is that the real economy, as opposed to the financial markets, is still in terrible shape. The Federal Reserve Bank of New York’s weekly economic index suggests that the economy, although off its low point a few months ago, is still more deeply depressed than it was at any point during the recession that followed the 2008 financial crisis…. So everything suggests that even if the pandemic subsides — which is by no means guaranteed — we’re about to see a huge surge in national misery.

When the cities break down, those who can call moving companies to get them out.  Others pack up the U-Haul.  But our financial structure and monetary system are breaking down like everything else and you may not be able to move lock, stock, and barrel out of a toppling economic environment.  But Republic Monetary Exchange can help you pack up and get some of your assets out of the way of a crumbling monetary system with gold and silver.

Contact us right away.  Thing are already getting out of hand.

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Setbacks, Buying Opportunities, and Higher Gold Prices

Swiss Bank Sees “Buying Opportunity”

After trading above and below and above $2,000 an ounce this month, the price of gold ran into a setback on Wednesday (8/19).  

But Suisse Bank says, ““We see plenty of upside on the gold price and view the correction as a buying opportunity,”

As we’ve detailed (See Raising Targets), Goldman Sachs now sees gold headed to $3,000 in higher inflation rate environments,  Bank of America has targets from “over $3,000,” to $3,400.  

And now Credit Suisse has raised its gold price target.

The Swiss bank’s analysts point to US fiscal policy to explain their new higher target.  The expect it to stay loose until we have much lower unemployment.

Their forecast also envisions a bounce back in gold demand in the jewelry sector, which fell 46 percent in the first half of the year.   

Credit Suisse also expects a resurgence of central bank gold buying which fell with the pandemic in the first half of the year.

“We think central bank buying will increase sharply,” say the analysts.

In additional technical commentary, the Swiss bank says there is room for some consolidation before a move higher, although it does not expect the lengthier consolidation periods that were characteristic of the 2001 – 2011 gold bull market.  

Credit Suisse expects gold to rise to $2,700 – $2,720 “over the longer term.”

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Did Warren Buffett’s Dad Just Get a Whole Lot Smarter?

Billionaires are Profiting During the Pandemic

We learn from Forbes that the pandemic lockdown has been very, very good for Warren Buffett’s fortunes.  

On March 18, 2020 his net worth was $68 billion.  Now its $80 billion.  40 percent of Americans may be out of work, and 100,000 business have disappeared forever, but with $3.2 trillion of Coronavirus bailouts having washed under the bridge, Warren Buffett is up $12 billion.

And he is not the only one.  Warren is only number four on the list of wealthiest billionaires these days.  Above him are Bill Gates, he’s up $16 billion during these dark times; Mark Zuckerberg, who has put on $42 billion; and Jeff Bezos, at the top of the hill.  For all the suffering the country has been through, all the trillions in new spending and trillions more in money printing, Jeff Bezos’ net worth has increased by $76 billion during this time of sorrow.  He is now worth $189 billion.

How did it happen that the government stepped in supposedly to help the regular people out, and they got poorer, while the ultra-rich got richer?

We’ll only tease you with the short answer, which is that fiat money is fat for the cronies.  Always has been, always will be.  And the central bank is the delivery system, the very heart that pumps the money their way.

Now, it is true that all of this will eventually bankrupt the country, but the vampire squid cronies are too busy jamming their blood funnels into anything that smells like money to much care about what happens next.

The Genius of Warren Buffet 

Warren Buffett is up $12 billion

Buffett is a brilliant investor.  But he is also a crony capitalist.  His political devotion is to the functionaries that put money in his pocket.  In the Great Recession, his company might have suffered staggering losses in its holdings of Goldman Sachs, Wells Fargo, Bank of America, and General Electric, but Uncle Sam helped them out, even as 10 million Americans lost their homes.  Were it not for the Bernanke-Bush Bailouts, Buffett said, he wouldn’t have bought into the troubled Goldman Sachs.  

Now, something new seems to have dawned on the Oracle of Omaha.  He has apparently taken notice of the corner into which the Federal Reserve has painted itself.  The Fed has long taken on the role of the guarantor of the stock market and the net worth of billionaire cronies.  But it can’t keep printing money to support stocks with low rates without eventually tanking the dollar.

This is not a mystery.  Most of the people who buy gold know perfectly well that money printing does not create more wealth.  Money printing eventually cannibalizes itself, eating away at the value of the currency.  

So, for all his past hostility to gold, Buffett’s Berkshire Hathaway has purchased $563 million in shares of Barrick Gold, the world’s second-largest gold miner.

The Foresight of Howard Buffett

Howard Buffett, 1903-1964

Warren Buffett’s father, Howard Buffett, was a congressman from Omaha in the 40s and 50s.  He was the kind of elected official we desperately need today.  He understood the centrality of gold to a free and prosperous people.  He knew how paper money experiments end.  He was outspoken about it.  He knew the importance of people owning physical gold.

Howard Buffett passed away in 1964.  

Warren Buffett is 89 years old.  He’ll be 90 at the end of this month.  He apparently sees that central banks have lost control.  If he keeps his wits about him, Warren will soon realize that he should be buying physical gold.

It’s funny how the older Warren gets, the smarter his old dad appears.

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Breakdown

We’re not trying to predict an unknown future in this commentary.

We’re just pointing out that the signs of a breakdown are everywhere. 

The streets of many of our most beautiful major cities have been turned into encampments for addicts and the homeless and dumping grounds for human waste and drug paraphernalia.

Day after endless day, from the east coast to the west, we watch orchestrated mobs of masked criminals, committing acts of looting and arson where there used to be law and order.

It is clearly a sign of civil and legal breakdown.

These conditions have not arisen against the will of the political authorities.  Much of this breakdown is ignored if not actively encouraged by the political authorities.

Students of history looking for parallels have cited the Russian Revolution and the French Reign of Terror.

To us it most closely resembles China’s Cultural Revolution.  Rebel groups, violent and ignorant, were encouraged by Chairman Mao and his henchmen to roam the streets lawlessly.  Children and students were made managers of schools, farms and factories, their former managers forced to grovel in public humiliation sessions, confess their sins, and perform menial labor.  The accomplished were shamed for their achievements.  The learned were lectured by the ignorant.  Legal restraints on violence were lifted and acts of terror became common.  

As we watch windows being smashed and statues being pulled down here in America, we remember accounts of the destruction of churches, temples, and monasteries in China, and the book burnings of their Cultural Revolution.

Eventually massacres and even cannibalism ensued in China.  Today’s protestors carry signs bearing the motto “Eat the Rich!’’ as a totem of their wealth envy.  But in the depths of the Cultural Revolution, cannibalism was not metaphorical.  

How far along are we in our own cultural revolution?  There are a lot of familiar patterns being re-enacted beside by the violent mobs on the streets.  We have public humiliation sessions in our biggest companies and educational institutions in which blameless individuals are blamed, belittled, and shamed for the deeds of others.  We are now told by this vanguard of the revolution that things like mathematics, grammar, industriousness, and punctuality are nothing but the tools of a racist society’s oppression.  

Perhaps there is a more apt precedent for what is underway in the US today than China’s Cultural Revolution.  We can’t say for sure.  It is not our specialty.

Our field is money.  We are students of monetary history.  We have some familiarity with the breakdown for paper money economies in other times and places.

So, one thing we can say for sure is that the breakdown that is taking place all around us in our civil life and in the social order in also taking place in our monetary system. 

Unlike mobs smashing plate glass windows, torching buildings, and assaulting elderly people, the failing monetary system does not show up on the evening news.  Graphs of the compounding federal debt and the frenzied of money printing of the Fed are no competition for images of cities on fire. 

But the breakdown of the monetary system is very real.  Already banks are anticipating a tsunami of bankruptcies and defaults by businesses large and small, and on mortgages and consumer loans.  But that’s only the beginning, because the resources to paper over these bankruptcies have been consumed.  The money-printing is about to backfire as each round of money printing demands another.  The confrontations and political battles are becoming more pitched because, unlike in our more prosperous past, the stakes are higher than ever because the resources are dwindling.  Our politics are beginning to look like bands or pirates killing each other as they fight over their plunder.

Indeed, we can’t imagine that the November election—no matter who wins—will usher in a new era of peace and prosperity.  It will usher in increased polarization and a much more heated public debate.  No matter who wins.  It will accelerate the breakdown because the losers will not go quietly.  

The consequences of our monetary breakdown will be just as destructive as a city burning to the ground.  That’s why you need to own gold and silver.  Because the monetary system is breaking down like everything else.

Find out more.  We can’t stop the new American Cultural Revolution.  But we can help you protect yourself and your wealth from the monetary breakdown.

Speak with a Republic Monetary Exchange gold and silver specialist today.

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Gold Prices in Constant Dollars

Gold has reached new highs in nominal terms but it’s still below its inflation-adjusted record

How can you compare today’s gold and silver prices with their prices years ago?

It is not as easy as comparing today’s price with the price on any given day in the past.  The reason why goes right to the root of many of our financial problems.  It is because the measuring unit, the US dollar, is inconstant.   It is like a yardstick on a rubber band.  It is like the butcher’s thumb on the scale.  Such measurements are unreliable.

Last week we wrote about this problem in comparing today’s silver price with silver’s past performance.  

Saying that silver is headed to about $50 where it was in 1980 and in 2011 does not provide a clear picture, thanks to the incredible shrinking purchasing power of the dollar.  It would take $153 dollars today to equal the purchasing power of $50 in 1980.  So, today silver would have to reach $153 to equal its 1980 high. 

Similarly, silver would have to rise to $57 today to equal the high of $50 it touched in 2011.  That is because the US dollar is losing value all the time.

Let us apply the same “constant dollar” analysis to the price of gold.

Gold would need to rise to $2,850 in today’s dollars to equal its 1980 high of $850.  In 2011 gold came close to $1,900.  In todays dollars, the would be the equivalent of $2,222.

The Word Gold Council has provided us a chart of that shows the history of the gold price in both nominal dollars (the grey line) and in constant dollars (the green line).

If we were on a gold standard today, the gold dollar would be a reliable unit of value.  In fact, the dollar would be exactly what they used to say about it, “as good as gold.”  It would be a safe way to store wealth, not just for a short period, but for generations.  There would be no guessing games about foreign exchange rates with other countries on a gold standard. The dollar wouldn’t have to be “managed,” that is manipulated in a way that favors the crony banks that created to Federal Reserve to do that managing kfor them.  

A return to gold would do a lot to restore honestly in public life and civility in society.  That’s because it’s been said that the gold standard is like a country where a man’s word is his bond; fiat money systems are like a country where no one tells the truth.

A return to gold would increase our prosperity, too.  But all that is too much to take on in the present age, with its social, legal, and monetary breakdown.  

The best you can do is seek to protect yourself and profit as the monetary breakdown proceeds all around us.  A Republic Monetary Exchange professional can help you with that.

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Three More Important Things…

Three More Important Things for People Interested in Gold

But first a reminder.  The price of gold had a sharp correction in the middle of March with the COVID-19 lockdown,

It proved to be a great buying opportunity, but it lasted only two weeks.  We think any pullbacks in the gold and silver prices should be seen as a buying opportunity.

Now, on to our stories:

CONSUMER PRICES MOVING UP!

What did you think would happen when the printed all that money?

In early June, we covered a Wall Street Journal story that reported “Fastest-Rising Food Prices in Decades.”

It described food prices increasing 5.8 percent between March 1 and May 30, compared with the same time a year ago.

Now we have learned that for July, the headline Consumer Price Index rose 0.6 percent over the June number.  That was twice as much as was widely expected.

Food and medical categories led the CPI increase.  

BILLIONAIRE BOND INVESTOR SEES GOLD MUCH HEADED MUCH HIGHER!

Remains “unequivocally bullish!”

Jeffrey Gundlach is the CEO of $135 billion DoubleLine Capital.  We’ve included him in writing about “the smart money” that has been buying gold.  

Gundlach turned bullish on gold in the summer of 2018.

Gundlach was not surprised by the gold correction on Tuesday (8/11), but the exploding US deficit remains a major component of Gundlach’s analysis.  

“If we are going to continue that type of a pace, we’d be looking at over 50 percent of GDP in terms of the budget deficit, which is getting almost surreal in terms of what’s happening.”

“Gold will ultimately go much higher because I think the dollar’s going to go much lower,” he said.

Why Fed Bugs Really, Really Hate Gold!

Well, if there are “gold bugs,” there must be “Fed bugs!”

“Fed bugs are people with a faith-based belief in the power of central banks (and central bankers) to engineer economic growth using “monetary policy,” despite decades of history and current evidence to the contrary. They believe tinkering with inputs and rates and velocity and flows somehow makes us richer in terms of productivity, goods, and services. They believe in financial alchemy, as economist Nomi Prins puts it, rather than precious metals. They believe paper has value so long as government issues it and legislates its use. Most of all, they believe in technocratic control over money in the economy.”

So writes the always brilliant Jeff Deist, president of the Mises Institute.  

“They hate gold because it never goes away and never goes to zero. It holds monetary value intrinsically, without the imprimatur of a sovereign or government. Gold does not need the state or its bankers to operate as money, because individuals choose it as money on the market century after century.”  

More from Deist on the Fed bugs HERE.

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Raising Targets

The biggest banks are raising their target prices for gold.  That is because we have already passed their old targets.  

We are seeing headlines in the financial press that read, “Stunned by gold’s record rise? There’s more to come, analysts say,” and “Gold Barrels Past $2,000 With Stage Set to Rally Further.”

Goldman Sachs now sees gold headed to $3,000 if the inflation rate were to run at 3.5 percent, or even if it just bounced to an interim 4.5 percent. 

That is less a prescient market call than it is simply stating the obvious.  A real call from a real gold expert with a real track record is that of former congressman and presidential candidate Ron Paul.  Dr. Paul said last year at about this time that we could see $3,000 gold by the end of this year.

Gee, financial conditions would have to be serious for that to happen.  

And they are serious.  

Paul noted back then that we are in a period of a disintegrating monetary system.  “Warning signs are all around us!”  he said.

Bank of America now says prices could hit $3,000 within 18 months, while a portfolio manager from Van Eck believes “a price over $3,000 per ounce is reasonable,” and that “$3,400 may be the target.”

There are many calls for much higher gold prices that that, but we have just spotlighted a few from establishment institutions.  

As for silver, forecasts for $50 an ounce are all about.  

For our part, we think many of these forecasts may prove to be modest.  That is because we prefer to keep our eye on the root causes.  Prices are an effect, the result of fiscal and monetary mismanagement.  No matter how high gold and silver go, if the underlying causes of higher prices remain in place, price will continue to climb.

As for today, and any reasonably likely future, the causes remain not only in place, but we would say locked in place.

Consider:  As you can see from this CNBC chart, US money supply (M2) is up 23 percent over this time last year.

That’s a new world indoor record for US money supply growth!

At the same time, Federal Reserve officials are lobbying for trillions in new spending.  The Democrats are now pushing an additional $3.4 trillion stimulus plan.  The Republican are pushing one that costs $1 trillion.

America’s Gross National Product has seen a depression-like collapse.  The monetary and fiscal authorities are attempting to paper it over with more unpayable debt and legalized counterfeiting.  As a result, the dollar’s role in the global economy is under fire.  

This is the culmination of years of reckless policies.  It is not readily reversible.

It is serious.

At Republic Monetary Exchange, our job is to help our friends and clients protect themselves and their wealth with gold and silver.  Real money that can’t be printed and that you can hold in your hands.

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Bank of America Predicts $50 Silver

One of America’s leading banks now says silver could be headed to $50!

It’s not the forecast itself that surprises us.  After all, silver has been at $50 twice, in 1980 and again in 2011.

We don’t think silver at $50 is a stretch at all.  We think that it is a rather modest forecast.  After all, since the dollar is losing value all the time, like a ruler of 12 inches last year, 10 inches this year, and eight next year, we have to ask what is today’s equivalent purchasing power of $50 in 1980.

It’s more than $153!

In other words, a forecast for silver to reach $50 soon is still less than a third it’s real all-time high.

But we want to make sure the record is straight and not misleading.  Silver reached a high of $50 in 1980 under very special circumstances.  That was when the billionaire Hunt brothers, along with some other international players, we’re trying to corner the silver market.  

That drove silver higher than it might have otherwise gone, so we want to give you a better comparison.

Silver came close to $50 again nine years ago.  So, in real purchasing power, or what economist call “constant dollars,” silver would have to reach $57 today to equal its 2011 high.

Now Bank of America, the nation’s second largest bank, writes that silver could rise to $35 next year, and rally to $50 in the medium turn.

Bank of America has been surprising the markets with its acknowledgement of the precious metals bull market.  In April BofA, the nation’s second largest bank, raised its target price for gold from $2,000 to $3,000.   It said then, “As central banks and governments double their balance sheets and fiscal deficits respectively, we have also decided to up our 18-month gold target from $2,000 to $3,000 an ounce….”

“Another important point to remember,” according to the report, “is that, just as central banks are socializing risk in financial markets, governments are increasing their spending like never before during peacetime. Fiscal spending plans across developed economies are nothing short of breathtaking whether we look at them in dollar terms or as a percentage of each nation’s GDP.”

The Federal Reserve can’t just print gold like it can dollars, Bank of America concluded.  We couldn’t have said it much better.

The bank’s call for higher silver prices rests not just fiscal and monetary grounds.  Its analysis takes note of so-called “green” initiatives in Washington which could drive new industrial silver demand, especially for solar power applications.  BofA writes, “The last time this happened between 2006 and 2011, the precious metal rallied to $50 an ounce, a price level we would see within reach this time around as well.”

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Amazing Gold! Astounding Silver!

Records Fall Like Dominos as Precious Metals Keep Marching Higher and Government Spends More, Prints More!

Last week gold hit a new all-time high.  This week it roared right through the $2,000 an ounce psychological barrier.  Gold gained more than $50 per ounce on the COMEX market on Tuesday, racing to $2037 an ounce finish.  

And silver was on fire as well.  Last week silver made one of its biggest one-day moves in history.  Tuesday gained 7 ½ percent, to finish on the COMEX at $26.25.

With the new all-time high in gold prices last week that had everyone talking, we said the real question is, “What’s next?”  

We answered our own question this way:  “Higher prices!  Much higher!”

Let us sample some observations from others:

THE TELEGRAPH:

“Gold hit $2,000 an ounce for the first time on Tuesday following a record-breaking rally driven by fears over the impact of the coronavirus pandemic on the global economy. 

“The yellow metal, seen as a safe-haven asset, has been on a steady upwards trajectory over recent months….

“On Tuesday investors remained concerned over whether the US will pass another spending measure to support the world’s largest economy. A new stimulus bill could add extra liquidity to markets and weigh on rates, which would support the precious metal further.:

MARKETWATCH:

“Gold futures powered higher Tuesday, gathering momentum late in the session to finish at a fresh record as government bond yields headed lower and as the U.S. dollar’s recent rebound receded somewhat, allowing the precious metal to make an assault on a record close above the $2,000 threshold.

“The sustained rally in gold has come as governments across the world have flooded their economies with financial aid to combat the COVID-19 pandemic.  And investors are betting that the uptrend for the yellow metal continues as the dollar weakens and interest rates remain around 0% in many parts of the world….

“Silver, meanwhile, mounted its own charge higher.”

THE STREET:

“Gold Hits $2,000 For the First Time In History As Dollar Extends Declines.

“Gold prices hit an all-time of $2,000 per ounce Tuesday, extending a year-to-date gain that has driven a rally in bullion and prompted the largest inflows into gold ETFs in history…”

“Gold’s rise has largely paralleled an historic decline in the U.S. dollar, which has fallen nearly 10% against a basket of its global peers since mid-March, when the Federal Reserve first said it will buy an unlimited amount of government debt, as well as corporate and municipal bonds, in the biggest expansion of its balance sheet in history, which now stands at more than $7 trillion.”

We’ll finish with a comment from one of out favorite analysts, Michael Shedlock from Mish’s Global Economic Trend Forecast.  

Mish says, “There is plenty of fuel for a short squeeze too.”

And that would propel gold much higher.

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Predictable

t’s all been predictable.  Gold hits all-time highs.  Silver surging.

That’s why we’ve spent so much time predicting it.

Perhaps you remember Federal Reserve chairman Jerome Powell’s appearance on CBS 60 Minutes back in May.

Here’s a partial transcript:

Reporter: “Fair to say you simply flooded the system with money?”

Powell: “Yes. We did. That’s another way to think about it. We did.”

Reporter: “Where does it come from? Do you just print it?”

Powell: “We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds for other government guaranteed securities. And that actually increases the money supply. We also print actual currency and we distribute that through the Federal Reserve banks.”

Powell: “In terms of size, Mr. Chairman, how does what the Fed is doing right now compare to the unprecedented action it took in 2008?”

Fed Chairman: “So the things we’re doing now are substantially larger. The asset purchases that we’re doing are a multiple of the programs that were done during the last crisis. . .”

After watching the Powell interview, we wrote, “The Fed is doing what it did in reaction to the Panic of 2008.  The very measures that ran gold to stratospheric new highs in a few short years.

“Only they’re doing much more of it.”  (See The Fed ‘Fesses Up, 5/19/2020)

So we really don’t take a lot of credit for predicting things like new all-time high gold prices.  That’s because the monetary authorities have told us exactly what they are going to do.  

And then they’ve done it.  A lot of it.

It’s not hard to draw a line between massive money-printing and higher gold and silver prices.  If we get credit for anything, it is for drawing that line for our friends and clients.  Over and over.

If you’ve been reading our commentaries or listening to us on the radio, you know that Washington spending and money printing are unhinged!  

They can’t get it under control.  It’s beyond the point of no return.  

Bottom line:  Higher gold and silver prices ahead.  It’s still predictable.

So here is what we wrote in May:  

“First, buckle up.  The Fed money-printing machine is going to shake this country to its foundations.

“And two, contact your Republic Monetary Exchange gold and silver professional today.”

All we would add to that is don’t wait!

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Gold Bars and Nuggets

Important News Nuggets From the Gold Bull Market

US Productivity Collapse

The US has paid a steep price for the COVID-19 shutdown.  US productivity has fallen by a third.  

The Bureau of Economic Analysis’ reports that, for the April-May-June quarter, US annualized quarter over quarter Gross National Product has fallen 32.9 percent

That is worse than a Depression era collapse.  Does Washington have a switch it can flip that will restore the economy?

No.  

All it has is the printing press.  Which brings to mind the expression that when you’re holding a hammer, everything looks like a nail.

By the way, the financial news media isn’t saying a lot about how much capital has been destroyed along the way, but it is over the cliff.

Every family that saved for years to open a small business, perhaps a restaurant or a retail store, that will now never re-open, has lost capital that has been years or even a lifetime in the making.

Putting the Gold Price in Perspective

Even though gold has reached a new all-time high, it’s nowhere near its old highs!

That’s because the value of the dollar has been diluted by the Fed along the way.  It is a dishonest unit of measurement, just like a ruler of 12 inches one year, 10 inches the year after, and 8 inches the next.

The World Gold Council point out that in constant (not shrinking) dollars, the nominal price of gold, even at our present record highs, is about $200 below its 2011 high, while matching gold’s prior record high in January,1980 would require a price of about $2,800  in today’s dollars.       

The gold price more than doubled from about $900 during the mortgage meltdown in 2008 to its 2011 high, while it is up only about 30 percent since the beginning of the COVID-19 pandemic struck.

China Suppressing Gold Buying… But for How Long?

Several Chinese national financial institutions have taken steps to limit domestic gold and precious metals complex purchases, according to a report from Reuters:

“Industrial and Commercial Bank of China (ICBC), the country’s biggest lender, said on Wednesday it would bar its clients from opening new trading positions for platinum, palladium and index products linked to precious metal from Friday. That directive, according to the lender’s customer service department, was in response to ‘violent price volatility’ and ‘the need to control risks.’

“Agricultural Bank of China said it had recently suspended new businesses related to gold, while Bank of China said it halted new account openings for platinum and palladium trading.”

One hidden motive may be to support China’s stock markets by preventing investors from moving funds from stocks to gold.  Most important for our friends and client is to note that unleashed, Chinese gold buyers can drive prices to unimaginable levels.

The financial site ZeroHedge writes, “It is neither in China’s, nor any other government’s interest, to see gold prices soaring as they likely would if tens of millions of Chinese speculators rushed to bid up the precious metal.”

  ZeroHedge tweeted, “All gold needs to hit 2,500 is for China’s momentum maniacs or the Robinhooders to start chasing it.”

Spending Our Way to Riches?

We just read a New York Times columnist—where do they get these people?—who advises the US  government to “spend our way toward a better tomorrow.”

In case you find that as incredible as we do, here’s a link to the piece called, “America Looks Hopelessly Broke. It Isn’t.”

Okay.  And that’s why we’re in this predicament.

Thanks, New York Times.  Now can the adults enter the conversation?

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gold and silver portfolio

Gold Sets All-Time High, So What’s Next?

This week the price of gold set the all-time and seems ready to continue to break it’s own each day. Meanwhile, silver made one of its biggest moves in history.

It has everyone talking.

But the real question is what’s next?

We think the answer is higher prices.  

Much higher.

Already major banks and forecasters are raising their target prices for gold and silver.  They have to.  Many of their old targets have already been smashed.  

We’ve practically made a career here of telling our friends and clients what the Fed is doing with the printing press in the basement of the Marriner Eccles Building in Washington.  

It has been wholly unprecedented.  And we don’t mind telling you we have tried to raise an alarm about it.

Likewise, we have tracked and graphed, and explained and reported the explosive growth of government deficits and debt until our charts have run out of room.  That growth, too, is wholly unprecedented.  

We don’t just mean that as a figure of speech.  We mean the debt is growing faster than ever before in history.

To reiterate some of what we have been reporting, Washington has increased federal debt by 14 percent since January 1.  The Fed has increased its asset base – the stuff it buys with made up money – by two-thirds since the beginning of the year.  

Explosive.  Unprecedented.

We want to illustrate things one more way.  The following is a chart of the money supply (M2, a measure of cash and cash-like liquidity such as checking deposits, savings accounts, and money market funds)

Since the first of the year, M2 has grown by 20 percent.  We have been watching these things for a very long time and have never seen anything like it.  Not even in Quantitative Easing.  Not even in the double-digit inflation of the 1970s.

Explosive.  Unprecedented.  

One more thing.  We have been clear that the most important megatrend in the financial world is the move away from the US dollar as the reserve currency of the world.  We haven’t shied away from the subject even when people we respect have downplayed the prospect.  But we know what we have seen.  We have watched central banks like Russia and China add gold to their reserves at a steaming pace and have concluded something important is going on.

Now we add the recent observation of Goldman Sachs to what we have said, citing Goldman strategists including Jeffrey Currie:

“Gold is the currency of last resort, particularly in an environment like the current one where governments are debasing their fiat currencies and pushing real interest rates to all-time lows.” 

There are, they write, “real concerns around the longevity of the U.S. dollar as a reserve currency.”

So again, what happens next?

We think the answer is higher prices.  

Much higher.

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Civil Disorder

It is time to face up the widespread civil disorder on the streets of America’s cities and towns.  

Nobody likes talking about civil unrest.  We don’t like to either.  

But we are seeing a fair amount of it now and between Washington’s spending and the economic shutdown, it’s as close to a sure thing as you get in life that a major economic crisis is on the way.  

In fact, we think it has already arrived.  It is visible in the shutdown businesses that will never reopen.  It is visible in the ranks of the unemployed.  It’s visible in all the capital that has been destroyed by the shutdown, families that saved for years to open small businesses that have now lost everything.   The destruction of capital is seen in big businesses like airlines and motion picture studios and sports leagues.

It is visible in the mounting debt, unpayable, and the legalized counterfeiting of the central banks.  The size of the bubbles always tells you about the size of the bust.  Unfortunately, the debt and funny money bubbles have never been bigger. 

It is visible in the escalation of political divisions as the factions fight over dwindling resources.

The approach of the crisis is seen in the rising prices of gold and silver.

What’s next?  Bankruptcies.  Evictions.  Layoffs.  Foreclosures.  Punitive new taxes and wealth transfer policies.  Homelessness.  Crime.  State wealth confiscation.  

The economic crisis will make the civil violence worse.  

Weeks ago we speculated about what kinds of disruptions are likely.  Here’s our short list:

  • Civil Curfews
  • No-go zones
  • Banks and businesses closed because of riots, plunder, looting
  • Pandemic shutdowns
  • Urban fires
  • Failure of public utilities during periods of lawlessness
  • Failure of the power grid due to mismanagement or sabotage
  • Empty store shelves 

We will just refer you to our commentary from the beginning of June called “Preparing for the Seen and Unseen” and end today’s commentary the way we ended that one:

“We are not interested in being alarmist, but we are watching the same news you are watching.  So we want to be realistic about what can happen. There are places in our country that the fabric of social order has already been shredded, where civil order has come to an end….

“Are you prepared for a time when the ATMs no longer spit out cash on demand?  When banks aren’t open to cash checks?  When medical centers close because of violence?  When cyber-criminals attack the financial nodes of the digital world?  When deliveries to your gas station stop?  When a credit card is useless?  When you need to go somewhere else suddenly?  When you call the police and they don’t come?

“Real money can come in mighty handy in times of crises.

“Don’t get us wrong.  We do not think precious metals can fix everything.  But it is like the old saying that money doesn’t buy happiness… But it can buy you a better class of problems!

“We think this is a good time to add silver to your portfolio.  For everyday monetary needs in a crisis.” 

Don’t wait any longer.  Call or stop by Republic Monetary Exchange and speak with one of our gold and silver professionals.

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The Financial Press Report Card

We love reading what the financial press says about the rip-roaring gold and silver bull market.  

Sometimes they miss the mark, sometimes they stumble into the truth. Let’s look at two this week and give out some grades for their bull market coverage…

FX Empire

Here is some snippets from an FX Empire piece we saw on Yahoo! News

“The relationship between the world’s biggest economies has worsened, as the U.S State department ordered the closure of China’s consulate in Texas, growing concerns that tension between the U.S and China could escalate further….”

“While the precious metal continues to fly higher after recent headlines on global Covid-19 caseloads reached 15 million, gold could hit the $2,000 price level within few weeks, as more stimulus hits global financial markets.”

Grade: B-
Basically correct.


Marketwatch

MarketWatch cites someone saying, “In reality, virtually everything is going gold’s way—record debt, epic increase in money supply, silver catching up, negative real yields, and even a dollar correction.” 

Grade: A
We’ll give that an A because it is a little more comprehensive.


We won’t grade Michael Shedlock (Mish) from TheStreet.com because he’s not really part of the financial press:

“Tensions of all sorts are on the rise in the US , EU, and globally: Covid, employment, fiscal stimulus China (military and economic), and massive increases in money supply by the central banks, especially the Fed.”

TheStreet.com’s Michael “Mish” Shedlock

Although we know from reading him over the years that he has a good handle on the whole thing, he forgot to mention debt.

But Mish concludes with a question about the Federal Reserve:

“If you currently have any faith that Central Banks have things under control, then please explain where you got that notion.

“It should be obvious that the Fed is boosting financial assets but that is not going to create jobs or cure covid. 

“In short, the Fed is blowing bubbles, many believe on purpose, and gold has responded to the stress. 

“I do not see a reversal in Fed policy. Do you?”

And finally, if the authorities can create wealth with paper, why don’t they create more of it and solve all our problems?

Read this new parable called Paper is Paper; Money is Money by Senator Rand Paul.  

It begins with these words: “The time came when the emperor decreed: ‘The people are in need; a plague is upon the land. I will give them money.’”

It is a tale for our times!

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Silver Awakens!

Leading Bank Forecasts 50% Move!

Here at Republic Monetary Exchange, we have been unrelenting silver bulls.  

At the end of last year we explained in detail how underpriced silver was:  

“About 40 years ago, at the beginning of 1980, silver was $50 an ounce.  

“In today’s dollars – because the Federal Reserve has sharply eroded the purchasing power of the dollar – that would be more than $156.00!

“At today’s prices, silver would have to triple to reach $50 an ounce.  But to reach the purchasing value in today’s dollar that silver had in 1980, it will have to increase more than nine times!

“Another way of putting it is that silver today is only a third what it sold for 4o year ago.  

“And it is only about 11 percent of the dollar value it had in 1980.

“Oh, and by the way, silver came close to $50 again eight years ago.  It reached $49.80 in 2011.

“We think silver is really underpriced today.”  

In March, Wall Street COVID-19 margin call selling briefly pushed silver below $12 an ounce, but by May it had recovered convincingly to over $18.00. 

Meanwhile, in April we cited a research report for the Silver Institute calling for silver to reach $19 this year.  We commented at the time that we viewed that as excessively conservative, “substantially understating the upside for silver this year.  Our view is colored by our long experience of watching silver dramatically out-perform gold in bull markets gone by.”

With silver priced at less that a third its prior all-time highs, we found it hard to take our eyes off the great profit opportunity silver represented.

At the end of May we alerted our friends and clients to the stirring of the silver market. 

Using our radio messages and our blog to highlight the opportunity, we said, “In a precious metals bull market like this, it usually takes silver a while to wake up! 

“We like to alert you to great profit opportunities.  Gold goes first.  It leads the way.  But when silver starts moving, it really rips!  

“Well, silver has started moving!”

It has proven to be a good call.  

Now silver is fully awake and ripping!

On Monday (7/20) Citigroup, Inc., one of the nation’s largest investment banks called for silver to reach $25, with a potential for $30.

While that would be a 50 percent move from the time they made the call, more telling than their price target is that the institution has had to acknowledge silver at all.  That’s because mainstream institutions and journalists talk about “silver’s surprising strength.”

To us, there is nothing surprising about it at all!

We remain unrelenting silver bulls. Speak with a Republic Monetary Exchange professional today and discover how to use silver for profit and protection.

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Invest in Inflation

It was a line from the American humorist Will Rogers a long time ago:

“Invest in inflation.  It’s the only thing that’s going up!”

According to the Bureau of Labor Statistics, after several months of decline, the June Consumer Price Index took a big jump in June.  It climbed .06 percent.  

 Annualize that!  

The June number was the biggest CPI increase since 2012.  Does this mean inflation is back?

Well, no.  It can’t be “back.” It never left.

We think the public’s confusion about these matters can be blamed on journalists, many of whom are too lazy or not smart enough to make meaningful intellectual distinctions.  

They help dumb down the public conversation.  

In this case, their lack of precision over a couple of generations has led the public to think that “inflation” refers to things like grocery prices and other everyday purchases.  

But the economists of old used the term “inflation” to refer to an increase in the amount of money and credit.  Because governments and their crony banksters, especially in a fractional reserve system, are always eager to increase the supply of money and credit, inflation is a constant in our economy.

It’s just that it doesn’t always manifest itself in everyday consumer prices.  So now journalists, who corrupted the term to begin with, make statements like “there is no inflation.”

But our economy is made of millions of people making individual choices, choices that depend on countless factors:  the stages of their lives, the political and policy environment, the needs of their families, the security of their jobs and income, and countless other personal preferences.  It is for that reason that the effects of inflation, an increase in the supply of money and credit, show up in different places at different times.  In the late 90’s it showed up in dot com stocks.  In the early years of the new millennium it showed up in the housing market.

Both of those bubbles burst.  But the Fed keeps inflating right along.  For some time this has been showing up in the stock market.  Some believe the June numbers suggest it may start showing up in everyday consumer prices.

It can show up in unexpected places or in many places at once.  We don’t know.  But we’ve been warning about what happens when governments print money.  

And it is printing money more aggressively than ever now.

No matter which items get more expensive the fastest, remember that you are actually seeing the value of your money, your savings, your cash, your dollars going down.  

The government and its crony banks never stop trying to inflate conditions in the economy.  It is not real growth.  Big government has killed real economic growth.  Its money printing is a substitute for real growth.  It is an attempt to paper over the real problems in the economy.

The price of gold tells us that the Fed is doing something very dangerous.

They won’t stop inflating.  When they don’t get the effects they wish, they will inflate more.  

You can invest in inflation by buying gold.  

It is going up.

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Off the Grid

This week we noted with great interest the accounts of the rich and famous being hacked.  Joe Biden, Barack Obama, Kanye West, Bill Gates and Elon Musk all had their Twitter accounts hacked.

It could have been the work of a state actor, like North Korea.  In that case, speculated one “senior American intelligence official,” the intent would have been something like destabilizing the stock market.

But instead it was believed to have been the work of an induvial or a band of hackers in what the New York Times called “a show of force.”

Twitter said, ““We’re looking into what other malicious activity they may have conducted or information they may have accessed.”

The incident reveals once again how easily our private information can be compromised.  Yahoo!, Veeam, Exactis, and Equifax are just some of the big digital data firms that have been hacked with billions of records stolen.

But instead of supporting means for people to protect their privacy, the government accelerates measures to make us more vulnerable.

The war on cash is a good example.  Cash is anonymous.  So Washington doesn’t like it.  In fact, you may have noticed that Washington wants full access to everything you do, while it wants everything it does to be secret.

Which raises the question:  Who is in charge here?  Is the state our creation and does it serve us?  Or does it see things the other way around?

Last year we wrote about reasons to want to be off the grid  (Good Old Fashioned Profits, 6/8/19):

“Some people buy gold just to get off the grid.  They would like to keep their financial affairs private.  Since the banks have become snoops for the government, reporting what you do, and since big corporations try to follow you in everything you do and anything you buy, just the peace of mind of having a little privacy is a very good reason to own gold.  

“There are other reasons to want to get off the grid.  You may remember how a lot of things were shut down after 9/11.  Have you ever wondered what would happen if the increasingly stressed national electricity grid went down, or if solar flares screwed up satellite functions and digital communications?

“What would you do if ATM machines stopped spitting out cash?”

It is only sensible to want to protect your privacy in this digital age.  Gold and silver are the single best means of getting your wealth of the grid and away from hackers, identity thieves, and other prying eyes.

We think protecting your privacy has never been more important.  Big changes are in the works.

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Gaining Perspective

Everything going on the country is a reason for more Washington money-printing and more Washington spending (at least according to Washington!)

And that means higher gold and silver prices.

Here are a few examples.

Washington, Where $1 Trillion Is Never Enough

“Speaker Nancy Pelosi on Thursday rejected the Trump administration’s calls to limit the next coronavirus relief package to $1 trillion, arguing that Congress will need to approve at least double that amount amid a surge in cases.

“‘A trillion dollars is OK, that’s an interesting starting point. But that doesn’t come anywhere near,’ Pelosi said at her news conference….

“But a $1 trillion-or-less package is a nonstarter for House Democrats who passed their own $3 trillion package in mid-May. The GOP-led Senate had ignored that package for weeks.

“‘Oh, it can only be a trillion dollars,’ Pelosi said Thursday, scoffing at the GOP’s proposed price tag and laying out her own demands. ‘No, we need a trillion dollars for state and local. We need another trillion dollars for unemployment insurance, and direct payments.’”

—Politico.com

Do You Even Want to See What Else is Headed Our Way?

Mohamed El-Erian is chief economic adviser at Allianz, the corporate parent of PIMCO. He says the financial stress from COVID-19 “is far from over.”

Stock investors must not be paying attention, but El-Erian says “there are already plenty of warning signs”:

  • a record-breaking pace for corporate bankruptcies;
  • job losses moving from small and medium-sized firms to larger ones;
  • lengthening delays in commercial real estate payments;
  • more households falling behind on rents and continuing to defer credit card payments;
  • and a handful of developing countries delaying debt payments.

—ZeroHedge

Will the Federal Reserve Cause the Next Riots?

In his latest commentary former presidential candidate and congressman Ron Paul reviews some of the activities of the Federal Reserve that are familiar to those that read these Republic Monetary Exchange commentaries.

Here’s how Dr. Paul thinks the building crisis is likely to play out:

“A coming crisis will likely be triggered by a collapse in the dollar’s value and a rejection of the dollar’s world reserve currency status. The economic collapse will be worse than the Great Depression. This will result in widespread violence along with government crackdowns on liberties, accelerating the US slide into authoritarianism. The only way to avoid this is for Congress to make drastic cuts in spending — starting with defunding the military-industrial complex — and to audit then end the Fed.”

—Ron Paul

What are your investment objectives?  Near term profit?  Long term wealth protection?  Let Republic Monetary Exchange show how to use gold and silver to achieve your aims as the government thrashes about from failed fiscal policy to reckless monetary policy.  Call or stop by.  

We’re here to help.

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Time to Stand Up!

Important! Before It’s Too Late!

Today’s commentary is something different for us at Republic Monetary Exchange. Our beat is money and helping our clients profit and protect themselves with gold and silver.

We don’t stray often. But today we must.

Freedom is one whole. If our freedom can be taken away in one area, we can lose it everywhere.

We are acutely aware of assaults on our freedom. Not too long ago, from the 1930s to the 1970s, the government made owning monetary gold a crime. It did so for nefarious reasons and used it as cover to fleece millions of Americans of billions of dollars.

Today our freedom of speech and freedom of thought are under full-scale assault.

Let us give you just one recent example.

Here is story alleging that the Dean of a University of Massachusetts nursing school was fired for sending out an email saying, “BLACK LIVES MATTER, but also, EVERYONE’S LIFE MATTERS.”

That got her fired.

We could provide many more examples. You probably know of some yourself. We wonder what this world would be like if the telephone companies listened in on your phone calls to make sure that everything you said met some arbitrary standard of approved speech. What kind of world would it be if the censors could cancel your phone service for saying something not officially approved?


Sound far-fetched? It is not. China is already experimenting with something called a “social credit” system. The Chinese Communist Party tracks its subjects’ behavior and awards points just like a financial credit score.

Engage in unapproved thoughts or behaviors, say the wrong thing, read the wrong book, socialize with the wrong person, and lose your right to travel, work, live where you wish, or engage in commerce.

We have all heard of bloggers and writers – mostly conservatives, but not all – that have been “de-platformed” by social media. These are people that have said something that the social media giants like Facebook and Twitter have found unacceptable, and who have therefore been banned and lost their access to their audiences.

Today we want to share one example. It is a powerful statement and broad critique of modern American life in the age of COVID-19. It is called “The Systematic Fall of the Republic and Rise of the Corporation.” The speaker is a man named Jeremy Elliot from something called the Iconic Podcast.
We are told his comments have run afoul of the thought-control police and that the commentary you are about to watch has been repeatedly de-platformed for it.

You may or may not agree with everything you see. But many people agree with a lot of it. Indeed, growing millions do. In any case, there is nothing here that justifies it being forbidden speech.
As he says, “When you want to know who is in charge, just think about who you can and can’t criticize.”

When we see the thought-controlling institutions so desperate that they keep “disappearing” his commentary, we think they are up to no good. Free speech and free thought are in endangered by their actions.
And once those freedoms go, the rest will surely follow.

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Three Things to Know in the Gold Bull Market

gold bars stacked in a pyramid

1. The World Is Starting to Notice Gold!

“Gold prices ticked past $1,800 an ounce this week, and are now not far from the all-time highs reached in 2011, in the bleak aftermath of the financial crisis. New records could be ahead.”

That is the lead from a story about gold in the Wall Street Journal Thursday morning (7/9/2020).

The dominant news media, including the mainline financial press such as the WSJ and the financial cable networks, have always had a difficult time reporting on gold.  Serving as the lapdog press of the financial establishment, Wall Street, the Federal Reserve, they don’t much like gold.  So their reporting about it is often wrong and almost always clumsy.  

Take for example the way the WSJ concludes its Thursday story: “… it isn’t unreasonable to believe it will reach new highs in the months ahead.”   

Wouldn’t your high school English teacher have called that a double negative, or unnecessarily wordy, or something?  Mine would have said “write what you mean”:  

It’s reasonable to believe gold will reach new highs in the months ahead.

2. The US Budget Train Wreck

The end of June marks nine months of the governments accounting year, Fiscal Year 2020. To no one’s surprise, it’s a calamity.

The government ran a deficit of $863 billion just for the month of June.  The nine-month deficit is $2.7 trillion, which is more than three time the first nine months the year before.  

In June 2019, unemployment insurance spending totaled $2 billion.  This June is was $116 billion.  

All we can say is, “It’s reasonable to believe gold will reach new highs in the months ahead.”

3. Could the Fed Become the Socialist Branch Bank for the Poor?

Former Vice President Joe Biden and Vermont Senator Bernie Sanders have come up with a 110-page joint policy paper as part of an effort to get Bernie Bros. and other socialists on the Biden bandwagon.  

Bob Wenzel, Economic Policy Journal, writes, “Most alarming in the paper is a recommendation that bank accounts be made available at the Federal Reserve for low- and middle-income families.”

“This would be a shocking expansion of the government role in the banking sector.

“Specifically, the statement says:

‘One in four American households are either unbanked or underbanked, putting them at risk of losing money due to exorbitant fees or usurious interest rates. Democrats will support and encourage Congressional efforts to guarantee affordable, transparent, trustworthy banking services for low- and middle-income families, including bank accounts and real-time payment systems through the Federal Reserve and easily accessible service locations, including postal banking.’ “

Well, why not risk-free, no fee, subsidized interest rates, guaranteed accounts for everyone?  They’re printing money for everything else under the sun!

And people wonder why gold is going up!

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Surprised by Gold’s Powerful Bull Market?

This chart will explain!

We would like our friends and clients to spend a few minutes thinking about what this chart means.  We have chosen it because we think it explains today’s powerful gold bull market.

Even more, we think it makes clear that gold is headed higher.  

But for as dramatic as this chart is, it doesn’t tell the whole story.

We’ll explain.

This chart overlays the gold price (in gold) with US federal debt as a percentage of US Gross National Product (in red) going back to the beginning of 2000.

It is from the Federal Reserve’s data and was produced from the Fed’s chart service on Wednesday (7/8/2020).  At the beginning of this period federal debt was less than 60 percent of the nation’s total productivity.

The price of gold was less than $400 an ounce.

Now it shows that federal debt is more than the entire productivity of the nation, about 107 percent.  And it is pulling the price of gold, now over $1,800, along with it.

Let us be clear why this should be so:  The price of gold is a referendum on the future value of a currency.  The dollar price of gold is a referendum on the future value of the dollar.  As US debt continues to mount, this referendum on the market value of the dollar is not good.

There is more to the story, a couple of limitations with this chart.  The Fed chart reflects the debt as of the first quarter of 2020.  We are now in the third quarter and the debt is trillions of dollars higher.  

It reflects the nation’s productivity as of the first quarter as well.  But since then, productivity has collapsed.

Even though this reflects the latest numbers from the Fed, the conditions are today much more grim.

One other thing.  Please note that the chart reflects total US government “public debt.”

The public debt is $20.56 trillion.  But there is another part of the debt not shown, the so-called intragovernmental holdings.  That is money the government has borrowed from the Social Security “Trust Fund,” Medicare, and other obligations of the government.  That adds $5.9 trillion to the total government debt.  

The total government debt is $26.46 trillion

That means that real ratio of debt to GDP—before the COVID-19 shutdown—is more like 137 percent of GDP. 

Because US debt is so high, the US government is becoming a credit risk in the eyes of the world.  The world knows that the government will resort to simply printing money to pay its creditors.  Paying them with dollars of diminishing value.  It knows this because that is what the US government is already doing.

The dollar price of gold is a referendum on the future value of the dollar.  No wonder gold is in a primary bull market and headed higher.

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Time to Start Thinking About Stagflation

It’s one thing to live in a slow-growth or no-growth economy.  That’s bad enough.

And it’s something else to live in an inflationary economy.

But it looks like it’s time to start planning for the worst of both worlds:  STAGFLATION!  That’s a combination of the stagnation of weak or no growth along with rising prices.

In the depressed growth conditions of stagflation, sales slow down, margins are squeezed, and jobs disappear. Both individual and corporate debtors become unable to pay their creditors.

At the same time inflation means the purchasing power of the currency falls, interest rates rise in compensation, and, saving money becomes pointless.  And it blows up the bond market.  

The 1970s are recalled as the “stagflation decade.” The stock market collapsed, and unemployment rose, as did interest rates.  Inflation skyrocketed.

Economic conditions were severe, but even those who had dollar savings that should have gotten them through the difficulty found that the dollar’s purchasing power was failing.

People began to pull out of troubled banks and failing currencies and move into precious metals.  A great bull market in gold and silver followed.

Noah Smith, a Bloomberg columnist wrote about the growing prospects of stagflation the other day:

“If capital begins to abandon the U.S. and the dollar in large amounts, the currency will crash and Americans will find themselves paying much more for everything from cars to televisions to gasoline to imported food. Interest rates will be raised in an attempt to lure back investment capital, and the country might undergo a period of stagflation worse than the 1970s. Large-scale unrest would undoubtedly result and — in the worst-case scenario — the U.S. could collapse like Venezuela.”

“This is an outcome to be avoided at all costs.”

It is a little late to worry about it now.  It’s like a Saturday morning hangover.  The time to do something to avoid the pain was on Friday night.

Smith writes, “If the U.S. goes from rich, world-straddling colossus to floundering dysfunctional developing nation in just a few decades, it will be one of the most spectacular instances of civilizational decline in world history.”

Fortunately, there is a haven of safety and profit in an era of stagflation:  Gold.

Speak with your Republic Monetary Exchange professional advisor about stagflation.  Prepare yourself now without delay, because the excesses that create stagflation are much, much greater now than they were in the 1970s.

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The Halftime Report

Some may breathe a sigh of relief that 2020 is now half over.  It has been a challenging year on many fronts.  But it should be of some comfort for our clients and friends to know that, as forecast, gold is the big winner.  

Here’s a brief 2020 halftime report along with charts of gold and silver in the first six months.

Gold outperformed just about everything in the first half of the year by climbing about 17 percent.

Stocks?  Not so great.  They are still down for the year, although extraordinary liquidity operations pumped stocks up in the second quarter. 

But the second quarter was another strong one for gold, which gained 9.5 percent.  Silver gained 25 percent. 

What do we expect for precious metals in the second half of 2020?  It seems very clear: there’s more of the same ahead.  That’s because the gold price is a referendum on the quantity and quality of the US dollar.

Apply this examination to other things.  Suppose there is a bumper crop of oranges this year, much more than in the years before.  Of course, the price of oranges will fall with the increased supply or quantity.

Or suppose that the orange harvest is the same as in recent years, but the quality is really poor.  They may be pulpy or just not sweet, but the oranges are simply not good.  In such a case, buyers will find substitutes and the price will drop.

Now, suppose both that the orange crop is huge and that the oranges are crummy.  That’s the worst of both worlds for orange prices, which will fall even more.

As we have made clear repeatedly this year, at the hands of the Federal Reserve the quantity of US dollars has simply run through the roof.

Sharply rising US debt, coupled with the collapse in US productivity, are reflected in the declining quality of the dollar.

Protect yourself and profit with gold and silver as the dollar’s quantity keeps climbing and its quality keeps falling in the second half of 2020.

Contact Republic Monetary Exchange today and speak with one of our experienced precious metals professionals.

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Extraordinarily Uncertain

Federal Reserve chairman Jerome Powell has proclaimed the future “extraordinarily uncertain.”

It is one of the few times that he has spoken that we find ourselves nodding in agreement.

Here are some uncertainties that spring to mind:  Will people ever go back to movie theaters in the numbers they did before?  Or will they stay at home and watch Netflix? Will more and more companies discover they can cut commercial real estate expenses with employees working from home?  How will travel and hospitality recover?  What happens when the number of people defaulting on their rent climbs?  What replaces all the capital, the product of years of savings, when small businesses close and lose everything?  What happens to car sales if fewer people stop commuting?  What happens to tax revenue with depressed economic activity and million unemployed?  What happens to social welfare spending? 

What happens when—as shown in the following chart—almost half the adult population doesn’t have a job?

What happens?  Powell is right.  The future is extraordinarily uncertain.  

Or at least part of it is uncertain.

So instead of making wild stabs at guessing what the future will look like, let’s look at what we know for certain.

The US government has met the challenges of this year with unprecedented deficit spending.  It added $3.12 trillion to its national debt in just the first six months of this year.  That brings the unpayable national debt to $26.31 trillion.  

The Federal Reserve has made up, conjured up, printed into existence $3 trillion that it did not have on New Years’ Eve 2019.

And with the made-up money, it has purchased the corporate debt of private companies: Wal-Mart, Berkshire Hathaway, Phillip Morris.  It has purchased government securities, agency securities, and junk bonds.  

In other words, Washington’s bubble makers are blowing up bigger bubbles in government debt, in corporate debt, in agency debt.  They are doing so the way they always do it, with Fed money printing.   

Fed Chairman Jerome Powell

From Reuters:

“The Fed has cut rates to near-zero, bought trillions of dollars of bonds and rolled out nearly a dozen credit backstopping programs to boost the economy and steady markets. The Fed has also pledged that it will use the ‘full range of tools’ to support the U.S. economy.”

Using the full range of its tools is how they blew up the mega-housing bubble and the huge dot com bubble: by the artificial creation of money and credit.

The Dow Jones Industrial Average is down 3.5 percent this year.  We get that.  We don’t think a shut-down economy, smashed-up businesses, and broken-down employment is good for stocks, either.

But the one thing we know for certain is that every problem will be met by Washington with more deficit spending, and by the Fed with more money printing.

Every problem.  Of that we can be certain.

They are one-trick ponies.  That’s all they have.  They make the bubbles bigger, the economy less resilient, and the eventual meltdown more painful.

And they make gold go up.

No wonder, then, that gold is already up about 17 percent this year.  Gold is up almost 18 percent in terms of the euro and 25 percent in the British pound.

Gold has climbed 28 percent higher over the last 12 months, while silver has climbed 18 percent.

We’re just getting started.

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No Wonder the Super-Rich Are Buying Gold!

Gold Has Outperformed Every Major Asset Over the Past 12 Months!

It’s been said that the rich get richer and the poor get poorer.

There is no question the Federal Reserve policies have been stove-piping money to the wealthy.  At the same time, the middle-class has stagnated.  

But the rich are not just depending on the Federal Reserve.  

Now they are buying gold, too. 

According to Reuters, “Advisers to the world’s wealthy are urging them to hold more gold, questioning the strength of the (stock) rally and the long-term impact of global central banks’ cash splurge.”

Sound advice.  Gold is the top-performing major asset over the last 12 months.  As we write this (6/26), gold is up 25 percent over the 12 months.  Silver has gained 16 percent.

The Dow Jones Industrial Average is down almost 5.5 percent.

You will not be surprised to learn that Reuters reports that the ultra-wealthy are concerned with wealth preservation.  One private banker said of their wealthy clients that “in many ways they have a longer historic lens than some of our other clients, so they do worry about inflation.”

Reuters spoke with nine private banks that manage around $6 trillion in assets for the world’s ultra-rich, and that had advised clients to increase their allocation to gold. 

Reuters:

“Before the COVID-19 pandemic, most private banks recommended their clients hold none or just a tiny amount of gold.

“Now some are channeling up to 10 percent of their clients’ portfolios into the yellow metal as the massive central bank stimulus reduces bond yields…”

If you, like the super-rich, are interested in wealth preservation, speak with a Republic Monetary Exchange gold and silver specialist today.  They are experienced and knowledgeable and can help you prepare to protect yourself and profit in this era of massive government deficits and unchecked Fed money-printing.

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Three News Topics We Want Our Friends and Clients to Know

The Writing on the Wall?

Trump administration economist are bailing out right and left.  Some of that is the normal ebb and flow of politics as many try to burnish their credentials a bit by serving in the administration and then wish to return to private life.  

But economist Bob Wenzel at Economic Policy Journal looks at the numbers and suspects something else is going on.  Kevin Hassett, a top Trump advisor has announced his departure.  Wenzel says Trump has counted on Hassett and that “it is an odd time for him to leave with the economy a mess as a result of the lockdowns.”

Thomas Philipson, acting chairman of the White House Council of Economic Advisers, is leaving at the end of the month.  Others leaving include “Andrew Olmem, special assistant to the president for economic policy and deputy director of the White House National Economic Council; Eric Ueland, who served as the White House director of legislative affairs and played a key role in negotiations with Congress over the stimulus; and Joe Grogan, director of the White House Domestic Policy Council.”  

Wenzel says, “I will allow readers to make their own guess as to what is going on but it doesn’t look good.

“Hug your gold coins.”

Point made, Bob.  

Thanks.

IMF Downgrades Its Ridiculous Growth Forecast

The International Monetary Fund has slashed its forecasts for GDP growth for both the US and the global economy.

In April, the IMF was forecasting US GDP to shrink by 5.9 percent this year.  It is now calling for an 8 percent contraction in 2020.

In April the IMF forecast the global economy would contract by 3 percent.  It now expects global GDP to fall by 4.9 percent.

That would be the worst collapse since the Great Depression.

We thought the earlier IMF forecasts were way off base.  30 million Americans lost their paychecks in April.   That’s an awfully big hit for a workforce of 165 million people.  By the time its all added up total US job losses may have reached 40 million.

Dead People Cash In

Did you get your $1,200 check from the government?  Well, you are not alone. 

1.1 million “economic stimulus” checks amounting to $1.4 billion were sent to recently deceased people.  

The government couldn’t be expected to exercise too much care.  After all, it was in a big hurry to get the economy moving again.

And that’s a line we’ve heard before.  

You may remember that the US Federal Reserve sent $12 billion in cash to Iraq in 2007. Shrink-wrapped, washing machine-sized palettes of freshly printed $100 bills.

And it all disappeared.  Without records.  Without accounting.  It went into gym bags and hidey holes.  It went into the trunks of cars and into the private safes of Iraqi officials.  

It just went.  

$12 billion.

Said Paul Bremer, the American in charge of stuff in Iraq, “Our top priority was to get the economy moving again. The first step was to get money into the hands of the Iraqi people as quickly as possible.”

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Seeing is Believing!

We want to share a few charts today, first to illustrate this powerful gold bull market, and then to show some of the financial machinations going on behind the scenes that we believe will drive gold much higher. 

By some interpretations, the gold bull market was confirmed, if not born, in August 2018 with the low of $1,167.

Before the year was over, gold moved decisively above its 200-day moving average.  It has stayed above that trend line ever since, except for a quick drop in March.  That drop appears to have been a Wall Street phenomenon, with traders and hedge funds faced with massive margin calls in the COVID-19 lockdown stock market collapse.  They turned to gold for the liquidity they needed in the moment, but it was a brief affair and they wasted no time reestablishing their gold holdings.

That liquidity is a primary virtue of gold.  It is the world’s most liquid commodity, even in a crisis.

The next chart is a dramatic portrayal of the Federal Reserve in action.  Covering the same period as the gold bull market beginning in August 2018, it shows both the explosive growth of the money supply, MZM (in red) and Federal Reserve assets (in black).

Both are “hockey stick” charts, sudden turning straight up.  MZM, a broad measure of money supply, has grown about 35 percent over the period, to about $21 trillion.  

Fed assets, represents financial instruments, corporate and government bonds, stocks, funds, mortgage securities that the Federal Reserve has purchased out of money it created out of thin air, or more accurately by making a computer entry in an account somewhere.  

Fed assets have increased about 66 percent over the period to $7.1 trillion.  That outpaces gold’s gain of 52 percent from trough to peak.

The growth of both of these measures should leave even old and grizzled market veterans gasping for air.  The straight-up climb of both is relentless and unprecedented, even as the driving force behind a bull market.

The Federal Reserve has taken this country’s economy into very dangerous territory.  It is not enough for us to say that we don’t believe the Federal Reserve has any idea what it has done with these policies.  It is better that you should know that the Fed itself admits it doesn’t know what it has done.

We will simply leave you with the words of Fed chairman Jerome Powell just a few days ago:

“We’re not even thinking about thinking about the consequences of our actions.”

We think these charts makes that evident.

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Dollar Crash, Part III

The Fiddle-Dee-Dee Chronicles

We have written a couple of important posts lately about a coming dollar crash.  

In Dollar Breakdown Ahead! we cited former Yale economist Steven Roach, who says, ““U.S. living standards are about to be squeezed as never before.”

We followed up on Roach’s observations in “More on the Coming Dollar Crash”.  Roach says that there’s not much that Washington can do about the new dollar crash.  It’s already baked into the cake because of what they’ve already done.  Things like the Federal Reserve’s money printing, the $4 trillion deficit, and the $26 trillion national debt.  

(By the way, the national debt is growing so fast it is getting hard for us to keep up.  When we say its $24 trillion, it suddenly shows up as $25 trillion.  Once we start using that number, it’s too late.  Just the other day, on June 10, it broke above $26 trillion.  Since then they’ve added another $145 billion in red ink.  IN JUST A FEW DAYS!  You can follow the explosive growth of the debt on a daily basis at this US Treasury site.)

“The dollar is going to fall very, very sharply,” says Roach.  He thinks it could lose as much as 35 percent of its value.    

All of the things that Washington and the Fed have done lately have been ill-considered.  That’s not just our judgement.  They know it, too.  Fed Chairman Powell said that the Fed has “crossed a lot of red lines that had not been crossed before.”  He says “you do that and you figure it out afterward.”

Figure it out afterward?  That sounds to us like Scarlett O’Hara is in charge of monetary policy.  “Fiddle-dee-dee!  I’ll think about that tomorrow!”

Nothing they have done has fixed anything.  It has only pushed the confrontation with financial reality a little further down the road.  By then, the dollar and debt problems will be bigger.  The collapse will be even more destructive.  

Powell went to Georgetown Prep.  He has a degree from Princeton.  He has a law degree from Georgetown, where he edited the law journal.  Neither he nor Yellen and Bernanke before him can be called stupid.  But how could they be so disconnected from reality?  No wonder James Grant complains that the dollar used to be on the gold standard.  Now it’s on the Ph.D. standard.

Grant points out that Powell “does business in a building infused with the doctrines of the hundreds of doctors of economics on the Federal Reserve System’s generous payroll.”  Yet they don’t know what the consequences of their actions will be? 

Fiddle-dee-dee, indeed!  

We’ll, we are students of monetary history, so we’re just going to buy more gold!  

We advise you to do the same.

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Amazed at the Stock Market Bubble

We have reported to you recently about the Wall Street “smart money” buying gold.  Names like Dalio, Druckenmiller, Tudor Jones, Zell, Gundlach, Singer, Klarman, Einhorn, Mobius, Hendry, Zell…  See All the Smart Money is Buying Gold, and More About the Smart Money.

There are two more smart guys we want to mention.  We think it is important to share their views because they are both alarmed by what is going on in the stock market.

The first is Jeremy Grantham.  He’s the co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo, a major asset management firm.  Grantham is best known for spotting speculative bubbles in the markets, including Japan’s stock market bubble in the 80s, the dot com bubble, and the housing bubble.

Grantham is “amazed” that the stock market could be so high.  That’s because the price/earnings ratio is in the top 10 percent in its history, while the underlying economy is in the worst 10 percent in its history.  The market and the economy have never been more disconnected, he says

Grantham calls it “one of the most impressive mismatches in history.”

“This will end badly,” says Grantham.  “it’s becoming the fourth real McCoy bubble of my career.”

There are a lot of other smart guys, but one of the smartest ones we know is David Stockman.  He was President Reagan’s budget director and a true financial whiz kid in his youth.  Now after a long career on Wall Street, he’s not only still smart, he’s also wise.    

David Stockman

Commenting on the current state of the economy and hopes for a recovery, Stockman says, “I think this will be a long, deep ‘L’ shaped bottom…. We went through a month in which 30 million people suddenly found themselves with no paycheck, in April, and the stock market had the best month in 52 years.”  

“Now what kind of sense does that make?”

We agree.  Not much.

“I do think we are near the end of the line of this whole phony Keynesian central banking regime,” says Stockman.  “Once confidence finally evaporates, there will be a massive stampede into real money.

Emphasis ours.  Real money.

We urge our friends and clients to avoid the stock market bubble, so clearly driven by Fed policies and not by economic growth and dynamism.

And we would like to help you beat the coming stampede into real money.  Contact Republic Monetary Exchange today and speak with one of our gold and silver specialists about protecting your family and your wealth.

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More on the Coming Dollar Crash

The dollar will crash under the staggering weight of its debt!

In fact, “The dollar is going to fall very, very sharply.”  That’s what Steven Roach says.  He’s very concerned.

We wrote about Roach last week (Dollar Breakdown Ahead!), calling him “a pretty sensible guy.” That was when he told Bloomberg News that “US living standards are about to be squeezed as never before.”

Well, that’s what happens when your currency crashes.  

Now Roach has taken the message to CNBC, where he said his forecast calls for as much as a 35 percent drop against other currencies.

If Roach is right, the price of gold will skyrocket!

“The U.S. economy has been afflicted with some significant macro imbalances for a long time, namely a very low domestic savings rate and a chronic current account deficit,” said Roach, a Yale professor and former chairman of Morgan Stanley Asia.  

““These problems are going from bad to worse as we blow out the fiscal deficit in the years ahead,” he says.  He points to the Stagflation Decade of the 1970s as a model for what to expect:  weak or negative economic growth combined with rising prices.  

That’s the worst of both worlds!

The following chart shows the collapsing purchasing power of the dollar over 300 years by comparing it to gold.  You can see a bad crash of the dollar during the Civil War era, one from which it recovered when gold was restored to the monetary system.

The next dollar crash came with FDR’s gold grab in the 1930s.  That was followed by the crash when Nixon abandoned the gold standard in 1971.

There isn’t much that lawmakers and Washington can do about the new dollar crash, says Roach.  

But you can do something for yourself. Take steps to protect yourself and your family with gold and silver.  Speak with a Republic Monetary Exchange precious metals consultant today

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Showdown

Nobody can watch everything all the time.  There are too many channels.  And the domestic news has reached the outer limits.  In fact, it is mesmerizing: demonstrations and looting, a new country with its own warlords that spring right up in the middle of a major American city, yesterday’s parade of authority figures proven wrong today, bailouts for the cronies, the COVID-19 deaths and lockdowns, burgeoning deficits and staggering money printing, a presidential election season getting underway, and a stock market that lurches and stumbles, and reels and staggers.

It’s like trying to take your eyes off a train wreck.  We know.  We watch it, too.

Yet there are other stories being screened on the 2020 channels that we would all be wise to watch as well.  These are the geopolitical developments that threaten the world with financial chaos and war.  We’ll mention just one of the global hot spots—China—that it would pay to follow because dangerous geopolitics drive gold prices higher.

Tensions with China are running high.  Over Hong Kong…  the Wuhan Virus… the trade war.  Charges and counter-charges flying across the Atlantic.  The vital waterways of the South China seas are crowded with warships, raising the risk of an accident or incident. Chinese fighters briefly entered Taiwan’s airspace last week, while China is very upset with a US military flight over Taiwan, also last week.

The Senate Armed Services Committee just days ago approved a new military fund of $6 billion “to confront China.”  That’s the way that Defense News headlined the story.  The measure would enable U.S. military operations in the region it calls the “Indo-Pacific.”

US and China trade war

Don’t ask where the billions come from.  Last week the national debt just rolled right past $26 trillion.  (By the way, the Pentagon just announced plans to shovel $250 million more to Ukraine.  It’s a great comfort, we’re sure, knowing that while American cities burn and its shops and stores are looted, Ukraine will be protected.  Your tax dollars at work!)

We’ll save news about a few of the other hot spot like Russia, Iraq, and Korea for another day, and for now will simply urge you not to wait for an international showdown to invest in gold.  

Protect your wealth before it happens.

We now return control of your television back to you.

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Rising costs of food and goods

Grocery Prices Take Off

The authorities cannot print trillions of dollars, money unbacked by anything and conjured out of nothing, without impacting prices.

And that is probably the best reason today to buy gold.  Because the Federal Reserve has been printing money like there is no tomorrow.  

Last year at this time, in the middle of June, the Fed carried $3.8 trillion of assets on its book. That’s $3.8 trillion dollars worth of financial instruments, mortgage bonds, debt securities, government bonds.  

Now, twelve months later its assets have climbed to $7.1 trillion.  That means that in the last twelve months the Fed has purchased $3.3 trillion more.  It has printed $3.3 trillion in the last year.  Most of it in the last three or four months.

All that new money blows the stock market bubble back up for now.  That’s why they do it.  As David Stockman said, the Fed is the vassal of Wall Street and the banking cartel that created it in the first place.   Bubble after bubble.  The Fed “dances with them that brung ‘em.”

Sometimes a Fed money printing spree blows consumer prices higher.  Look back to the 1970s and double-digit consumer price increases.  

Sometimes the money printing inflates dot com stocks.  Another time it is housing prices.  The next time it’s the stock or the bond market.

This time it could very well be consumer prices that take off.  A hat tip to economist Robert Wenzel at Economic Policy Journal for pointing out news from the Wall Street Journal that we might have missed, the “Fastest-Rising Food Prices in Decades.”

Food prices increased 5.8 percent between March 1 and May 30, compared with the same time a year ago.

The Consumer Price Index reports that steaks, ribs and pork roasts are up 10 percent.  Just the April 2.6 percent increase in grocery prices is the biggest monthly increase since the inflationary 1970s.  

It would be fair to blame some of it on the coronavirus pandemic.  It certainly hit the meat industry hard.  But no matter what sector of the economy forms the biggest bubble, as Wenzel says, “It is only the beginning folks.

“Mad Jay Powell is pumping trillions of dollars into the economy that will be bidding for the goods and services out there.”

The best thing you can do is protect yourself with precious metals.  We know a thing or two about periods like this because we’ve lived them before.  Call or visit Republic Monetary Exchange today.

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Dollar Breakdown Ahead

“U.S. living standards are about to be squeezed as never before.”

Oh, great!  Exploding federal budget deficits are catching up with us.  The chickens are coming home to roost and a crash in the dollar is headed our way.

That’s according to a piece on Bloomberg News the other day, A Crash in the Dollar Is Coming.  It’s by Stephen Roach, an economist at Yale University now, before that with Morgan Stanley, and with the Fed.

We have followed Roach for a long time.  He writes a lot and is a pretty sensible guy.

Roach says, “The seeds of this problem were sown by a profound shortfall in domestic U.S. savings that was glaringly apparent before the pandemic.”  

Unemployed and panicked American’s quit spending with the onset of the pandemic, so the US savings rate did turn up sharply.  But it hasn’t been enough to offset the exploding federal deficit.  

The coming dollar downturn will be inflationary, according to Roach.  Couple that with the slowdown effect of the pandemic measures, and you have the worst of two worlds:  stagflation.  Rising prices and little or no economic growth.  

Oh, great.

And that’s not all.  According to Roach, the growing trade war will mean that much of what Americans buy will be diverted from low-cost to higher-cost producers.  That’s another tax on consumers.  And who will fund our deficits, buy US Treasury securities? Take China out of that picture as well.  Fewer buyers mean higher interest rates.

Oh, great.  But as Roach says, the privilege we’ve had with the dollar shouldn’t have been taken for granted.  And now a collapse of the dollar is headed our way.

Oh, well.  But what can you do?  

There is something you can do instead of sitting around muttering “oh, great,” and bemoaning the inevitable.  Take the vital steps needed to protect yourself and profit with gold and silver.  

You can do that!  

To get started actually doing something, call and speak with a Republic Monetary Exchange precious metals specialist today.

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Preparing for the Seen and Unseen

Cities burning, a plague on the land, businesses failing, millions unemployed.

That is what is visible.

What is hidden from most people is the destruction of our monetary system by mad money printing and a mountain of unpayable debt that is close to collapse.

That’s unseen.  For now.

We have written many times about the unseen destruction of out monetary system, overloaded by debt and undermined by made-up money.  It is one of our specialties.  Almost everything we have written over the past couple of years deals with termites, unseen, at work in our monetary system.

Now, just a few words about what is seen all around us.  From the COVID-19 shutdown to the riots in our streets, it is all very visible in the news.  We don’t write as much about things that everyone sees because, well, because everyone sees them.

But now it is time now to think about how to protect yourself from what is out in the open.  What looks like the fraying of our civil life.

Over the centuries people in such circumstances have turned to gold and silver.  In troubled times we think owning both is very wise.  But in addition to being underpriced relative to gold, silver has the advantage of providing y0u with smaller units of purchasing power that can be especially useful in the event of disruptions in the normal functioning of modern life.  

What kind of disruptions?

  • Civil Curfews
  • No-go zones
  • Banks and businesses closed because of riots, plunder, looting
  • Pandemic shutdowns
  • Urban fires
  • Failure of public utilities during periods of lawlessness
  • Failure of the power grid due to mismanagement or sabotage
  • Store shelves empty

We are not interested in being alarmist, but we are watching the same news you are watching.  So we want to be realistic about what can happen. There are places in our country that the fabric of social order has already been shredded, where civil order has come to an end.

How far will it go?  We don’t know.  Nobody does. That’s why we suggest you ask yourself some tough questions.

Are you prepared for a time when the ATMs no longer spit out cash on demand?  When banks aren’t open to cash checks?  When medical centers close because of violence?  When cyber-criminals attack the financial nodes of the digital world?  When deliveries to your gas station stop?  When a credit card is useless?  When you need to go somewhere else suddenly?  When you call the police and they don’t come?

Real money can come in mighty handy in times of crises.

Don’t get us wrong.  We do not think precious metals can fix everything.  But it is like the old saying that money doesn’t buy happiness… But it can buy you a better class of problems!

We think this is a good time to add silver to your portfolio.  For everyday monetary needs in a crisis.

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The World Keeps Turning to Gold

The policy responses to the COVID-19 virus continue driving investors and institutions around the world to protect themselves with gold.  Riots and looting will drive more people to gold.

They are watching governmental failure.  They are seeing deficit-funded spending soar.  They are watching digital money printing at speeds unthinkable only last year.

The latest numbers from the World Gold Council show that through the first 5 months of 2020 (through May), gold ETFs have added more gold than in all twelve months of the biggest growth year ever, 2009.

Over the past 12 months, assets in global gold ETFs have nearly doubled.

We repeat here a crucial point about ETFs we made in May (If It’s Paper It’s Not Gold):

“One of real gold’s primary virtues is that it is not somebody else’s liability.  Real gold that you own is not dependent on someone else’s promises, performance or solvency.  

“Not so with paper gold or other vehicles that purport to represent or to be based on the ownership of gold at some indeterminate place, time, and form.  This applies to futures, options, ETF’s, shares, forward contracts, and IOUs of all kinds.

“If you want the protection that gold offers, you want real gold.  Not paper.  Paper is not gold.”

We also recommend you review the events that began in March when the pandemic lockdown created shortages and the inability of other dealers to make timely delivery of gold and silver to their clients.  

ETFs were at the center of the disconnect between world gold prices, index prices and the other prices of gold that you may read about in the newspaper, and the real price for physical gold and silver you can take home and put in your safe.  

The Wall Street Journal coined a new term for gold because of this decoupling:  “unobtanium.” 

Republic Monetary Exchange was unlike many dealers.  Right through the period, we were still able to make immediate delivery to all our clients, just as we continue to do every day!

But we think the episode highlights the pitfalls of trying to replicate the value of real gold with ETFs and other paper representations about gold.  

As we have written before, one of the most important reasons to own gold and silver is to avoid major risks common to stocks, bonds, banks, and other financial assets and transactions:  the risk of insolvency and default.

All these financial markets and institutions carry a risk of insolvency and default.  That goes for ETFs, too.  Institutional risks throughout the world economy appear to be growing daily.    

But gold and silver are monetary commodities in their own right.  They are not claims to something else somewhere else down the road.  The value of an ounce of gold or silver is utterly indifferent to the issuer’s total debt, or the wisdom of its political leaders.   An ounce of gold is an ounce of gold no matter whose image or national motto is engraved on it.  

Its value is not contingent on someone else’s integrity.

The growth of gold ETFs shows a fast-spreading concern with the solvency of governments and the reliability of their money.

But only real gold and real silver will perform in a crisis.

Find out more about the importance of owning gold by speaking with a Republic Monetary Exchange precious metals specialist.  They are here to answer your questions and help you achieve your personal financial objectives.

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Gold and the Money Supply

Wonder why gold is headed higher?

Take a look at how much money the Federal Reserve is printing.  And how it pulls gold right along with it!

This chart above tracks the growing money supply (in black), using a broad measure of liquidity called Money of Zero Maturity.  It consists of cash, and cash-like instruments such as checking deposits, money market accounts, and small-denomination time deposits.

After having grown by less than a trillion dollars a year for the previous five years, suddenly Money Supply has grown by $4 trillion in less than six months!

That’s quite a magical money machine you have there, Mr. Powell!

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Silver Opportunities in the Bull Market

In a precious metals bull market like this, it usually takes silver a while to wake up! 

Silver is waking up now.

We like to alert you to great profit opportunities.  Gold goes first.  It leads the way.  But when silver starts moving, it really rips!

Silver has started moving!  The gold/silver ratio, which reached 130 to one in March, has fallen to 97 to one.

The gold/silver ratio is simply the price of gold divided by the price of silver.  It reflects how many ounces of silver it takes to equal an ounce of gold.  When silver appreciates faster than gold, the ratio moves down.  When gold appreciates faster the ratio moves up.

Using the gold/silver ratio as a trading strategy, one that keeps you fully invested in precious metals all the time is a powerful means of growing the total number of ounces of gold and silver you own.

An example for illustration purposes using the spot prices of the metals, ignoring transaction costs and premiums, can help make the strategy clear.  In March one could hypothetically have traded one ounce of gold for 130 ounces of silver.  The ratio of 130 to one was the highest gold to silver ratios in history. 

Now the gold/silver ratio has turned down.

The ratio has fallen because the silver market has awakened and the price of silver has begun moving faster than gold itself!  Now, an ounce of gold is equal to 97 ounces of silver; the ratio is 97 to one.  This is still a historically high ratio that has only been equaled twice in history, once during World War II and once in 1990. 

The following chart shows the ratio over the last 20 years. Since the two metals have different supply-demand fundamentals, their prices do not move in lockstep.  The ratio is always in motion, creating the opportunity to emphasize in your portfolio the one poised for the greatest percentage gains.

The gold/silver ratio strategy indicates that right now the metal poised for the greatest percentage gain is silver.  We are never surprised to see silver climb faster than gold.  We are never surprised to see the gold/silver ratio begin to turn lower.  It is a common feature of gold and silver bull markets.  

At some point those who use this strategy, trading gold for silver now, will trade back into gold when the ratio moves lower, thereby substantially increasing their total gold holdings.  Your Republic Monetary Exchange precious metals specialist can give you examples of this strategy at work.  Depending on your unique objectives it can make sense to be in the precious metal poised for the fastest appreciation.   

Speak with your Republic Monetary Exchange precious metal specialist to see if taking advantage of today’s gold/silver ratio, still at historic highs and beginning to turn lower, makes sense for you.  He will explain how to grow the number of ounces of precious metals in your portfolio.  Trading the gold/silver ratio is a simple strategy, one that many of our clients and I have used for years. 

We think it represents a tremendous opportunity.

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financial warfare

Financial Warfare

Don’t count on China helping fund much more of America’s growing mountain of debt.  Better to wonder how long it will continue holding all the US Treasury debt it currently has.

That’s because things are escalating between the US and China.  It has gotten to the point of official name-calling.

China holds $1.08 trillion of US Treasury debt.  Stated differently, China’s government is a creditor of the US government.  It has loaned the US more than a trillion dollars.  The only other country that loans Uncle Sam that kind of money in Japan.  It has loaned the US—the world’s biggest debtor–$1.27 trillion.

china-yuan-dollars

Right now, the US needs all the creditors it can find.  That’s because its borrowing appetite is off the charts, gorging on $4 trillion or more in fresh borrowing this year alone.  And when you need to fund a $27 trillion dollar national debt, you need all the lenders you can get to stay afloat.  

About $7 trillion of the US national debt comes from foreigners.  Including China.  Those countries don’t lend us that money just because they like us so much.  They do so because it meets their needs to have dollar reserves for settling cross-border commerce and debt obligations and to provide some underpinning for their own currencies.

But China could probably lighten up its Treasury holdings considerably.  Russia, until recently a major US creditor, dumped most of its dollars.  And put the money in gold instead.

So, here’s what’s on the agenda:  Trouble over Hong Kong.  More trade conflict.  Claims against China for COVID-19.  Congress has passed a human rights sanctions measure against China, now in the President’s hands.  Huawei.  China’s talk of retaliating against the Huawei ban with its eye on Boeing, Tesla, and Apple.  A growing pushback against Chinese students studying in the US.  Claims and counter-claims in the South China Sea’s shipping lanes.  Plus China’s considerable debt problem of its own.

Financial warfare is about to break wide open.

It’s not hard to imagine a sea lanes incident or accident that leads to hot warfare.  Especially in an election year.  When the tinder is ample and dry, it doesn’t take much to spark a conflagration.  (Look up the assassination of Archduke Ferdinand as an example.) 

Today there is more dry tinder in Sino-American relations that there was in the Balkans in 1914.  

Just as it’s a safe bet that gold prices will be higher next year, it’s a safe bet that China won’t still hold $1.08 trillion in US Treasury debt next year.  And that will mean more Fed money printing to fill the gap.

And that will make the higher gold price part of the bet a sure thing, too.

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It’s Not All That Complicated

It’s not all that complicated.  

For example, if the government spends like crazy and comes up with the money by just printing it, you should be suspicious of the long-term prospects of that money.

It’s not all that complicated.

We’ve tried to do a good job making fiscal and monetary policies simple.  Another example:  See out post on fiscal policy from early May that asked Is a US Debt Calamity Dead Ahead?  We reported that the US deficit for Fiscal Year 2020 was  going to explode.  It had been expected to run about a trillion dollars.  Then, suddenly that changed to $4.5 trillion.  That’s a lot of red ink.  It’s more than the five prior years’ deficits combined. 

Since the US was already unable to pay its debts, but has to keep borrowing more and printing more to keep the game going, of course a calamity is dead ahead.  If you doubt it, try the same kind of budget management at home.  

Calamity.  Not that complicated.  

Or take our recent commentary about monetary policy, What Hit Us?  We tried to show you how fast the Federal Reserve is printing money.  Pretty damn fast, to tell you the truth.  Fed officials like Kashkari and Powell have been quite outspoken about how they can print forever.  They sound proud of it, like accomplished counterfeiters might be proud of their handiwork.  Or maybe they know what a jam we’re in and they are putting on their brave faces.  But do dollars rolling off the Fed’s printing presses by the trillions make the dollars you’ve saved worth more or less?

Less.  Not that complicated

Michael “Mish” Shedlock

One of our favorite market commentators, Michael “Mish” Shedlock from Global Economic Trend Analysis, usually cuts through any fog and confusion, too.  And now he’s pointed out something that we, in the rush of domestic news, have not adequately reported.  Just how much of these same reckless fiscal and monetary policies are other leading economies engaged in?

Quite a lot.  Here’s a quick synopsis from Mish:

Japan:

Japan is considering a fresh stimulus package worth over $929 billion…. The package, to be funded by a second extra budget for the current fiscal year beginning in April, would follow a record $1.1 trillion spending plan deployed last month.  

China:

China will increase it’s budget fiscal deficit to a record 3.6% of gross domestic product this year, up from 2.8% in 2019.  This is the first time the ratio has exceeded 3% – a red line for decades.

European Union:

On April 23, the EU leaders announced ‘Unprecedented’ Stimulus Against Pandemic.  In addition, the EU is engaged in a stimulation policy of negative interest rates.  At the same time, the breakup of the EU is looking more likely.

Mish says, “given all this competitive currency debasement, I have a question: Got Gold?”

See?  It’s not that complicated.

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What Hit Us?

In this commentary we are sharing with you exactly the same message as on our radio messages this week.    

Except this is a little better because now we can also show you what we are talking about.  

It is especially important to see and understand this, because next year people everywhere are going to be wondering what hit us.

So here it is.

The Federal Reserve is printing dollars like Monopoly money!  

The Fed is printing trillions of dollars.  

Here’s a chart of Federal Reserve assets.  You notice that the graph has turned straight up.  It represents the things the Fed owns, financial instruments of one kind or another:  government bonds, mortgage securities and other debt instrument, including junk bonds.  

The Fed acquired all these things by purchasing them.

“Hey, wait a minute!” you might say.  “Where did the Fed get all the money to buy all those things?”  

Good question.  

It printed the money.  Well, it printed it digitally, actually.  But still it just made it up.

Monopoly money

It’s hard to comprehend how fast the Fed is printing money.  Go back and look when we shared this chart with y0u in the middle of April here.  At the time it showed Fed assets of $6 trillion.

Now they are up another trillion dollars, to $7 trillion.

The Fed has printed $2.7 trillion just since the first of March.    

Things are starting to move very fast.  You’ll want to check in on these commentaries more often now just to keep up.  And share them with your friends and family.

The world has experienced these bouts of crazed money printing before.  The always end very badly.  Always.  It is surprising that Fed officials don’t know that.  Or maybe they do.  Maybe they do, but they don’t care.  Or maybe they do, but they don’t feel they have any other choice.

In any case, it is a road to ruination.  Ask your Republic Monetary Exchange precious metals professional to share some examples from history of this kind of thing.  

For now, we’ll just tell you that what they are doing is bad for the cost of living. 

Very bad.  

But good for the price of gold.  

Very good!

Others are going to wonder what hit them.  But you’ll know.  

Just don’t wait to protect yourself.

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Central Banks Still Buying Gold!

The world’s central banks continued their diversification into gold with new acquisitions in the first quarter of 2020 (January – March).  The World Gold Council reports net new central bank gold purchases of 145 metric tons in the period.

We feature news about central bank gold buying because we believe it represents one of the most important global megatrends of our time.  Its primary impact is threefold:

  • Central bank gold purchases are a harbinger of growing “de-dollarization,” the waning role for the dollar as the world’s reserve currency.  As such they also signal a long-term decay in the dollar’s purchasing power.
  • The addition of gold to central bank reserves makes those nations less susceptible to US  foreign policy hegemony.  It is no secret that the rest of the world, including long-time US allies, are bristling at what they see as the heavy hand of US trade restrictions and sanctions that directly impact their economies.
  • The sheer quantity of central bank buying power has an unmistakable impact on gold’s trajectory.  Furthermore, gold in central bank reserves is gold in strong hands and is less likely to be sold. 

Although central bank purchases in the first quarter were nine percent above the five-year quarterly purchase average, they were eight percent lower than during the same quarter in 2019.

Russia announced that it suspended its gold buying program as of April 1.  The Central Bank of Russia has been the largest of the national gold buyers since 2005.  The World Gold Council says that “the bank gave no reason for the move.” However, petroleum and natural gas are Russia’s leading “cash crops,” so sharply lower energy prices this year have unquestionably impacted the country’s foreign currency earnings.

The Gold Council reported earlier that global investment demand for gold (bullion, coins, ETFs) in the first quarter of 2020 was 80 percent higher than the same quarter in 2019

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Jerome Powell

The Fed ‘Fesses Up

The Fed is doing what it did in reaction to the Panic of 2008.  The very measures that ran gold to stratospheric new highs in a few short years.

Only they’re doing much more of it.

But don’t just take it from us.  

Now you have it directly from Lawrence Powell, the chairman of the Federal Reserve.

And the gold market is responding the way it did last time.  By heading much higher.

Sunday night (5/17/20) on the CBS news show 60 Minutes, Powell confessed the whole money-printing scheme.  Here’s the exchange with anchorman Scott Pelley.

Fed Chairman Jerome Powell

Pelley: “In terms of size, Mr. Chairman, how does what the Fed is doing right now compare to the unprecedented action it took in 2008?”

Fed Chairman: “So the things we’re doing now are substantially larger. The asset purchases that we’re doing are a multiple of the programs that were done during the last crisis. . .

During that money-printing spree, after the collapse of Bear Stearns and Lehmann Brothers and as the housing market melted down, gold ran up almost $1,200 hundred dollars an ounce, from about $700 to $1900.  Silver rocketed from below $9 an ounce to almost $50.

Only this time, the Fed is creating even more money out of nothing than before and doing it much faster. (The Fed just prints it, said Powell, “We print it digitally.”)

As the interview continued, Chairman Powell assured Pelley that the Fed hasn’t done all it can do.  Despite the fact that the Fed has created $3 trillion out of nothing since the first of October, Powell says it can still do much more.

Fed Chairman:  Well, there’s a lot more we can do.  We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have. So there’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.

Pelley: What would the Fed’s next steps be, potentially?

Fed Chairman: Well, to begin, the one thing we can certainly do is we can enlarge our existing lending programs. We can start new lending programs if need be. We can do that. There are things we can do in monetary policy. There are a number of dimensions where we can move to make policy even more accommodative. Through forward guidance, we can change our asset purchase strategy. There are just a lot of things that we can do.

Pelley: What would the Fed’s next steps be, potentially?

Fed Chairman: Well, to begin, the one thing we can certainly do is we can enlarge our existing lending programs. We can start new lending programs if need be. We can do that. There are things we can do in monetary policy. There are a number of dimensions where we can move to make policy even more accommodative. Through forward guidance, we can change our asset purchase strategy. There are just a lot of things that we can do.

Two things:

First, buckle up.  The Fed money-printing machine is going to shake this country to its foundations.

And two, contact your Republic Monetary Exchange gold and silver professional today.

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If it’s Paper, It’s Not Gold!

We wonder how much longer Bernie Madoff’s stunning stock swindle could have continued but for the financial environment suddenly shifting.

It all fell apart for Madoff with the Wall Street shakeout that included the failure of Bear Stearns and Lehmann Brothers in the fall of 2008.  Investors everywhere were in trouble and began selling their holdings.  By November, Madoff was swamped with billions of dollars of redemptions for clients that he couldn’t meet.

Bernie Madoff

Soon he was in jail.  Madoff may be eligible for release if he lives to be 201 years old.

Not likely.

We tell this story because while financial funny business may go on all the time, it is in time of upheavals and reorientations that it gets exposed.  Times like this.  As Warren Buffett put it, “When the tide goes out, you see who’s been swimming naked.’

We don’t have the time and expertise to be forensic accountants.  We aren’t in a position to investigate everything happening on Wall Street.  But with the tide has gone out in some of the markets, and monetary and fiscal policy as unhinged as they have ever been in our lifetimes, we think this is a good time to remind our friends and clients that if it’s paper, it’s not real gold.

One of real gold’s primary virtues is that it is not somebody else’s liability.  Real gold that you own is not dependent on someone else’s promises, performance, or solvency.  

Not so with paper gold or other vehicles that purport to represent or to be based on the ownership of gold at some indeterminate place, time, and form.  This applies to futures, options, ETF’s, shares, forward contracts, and IOUs of all kinds.

If you want the protection that gold offers, you want real gold.  Not paper.  Paper is not gold.

We bring this up now because there are questions about gold that is represented to be accounted for in some of the world’s financial centers.  

Often mistaken, a “Gold” ETF is actually just a paper ETF.

An account on the financial news website ZeroHedge is asking questions about the source and perhaps even the title to gold held by the world’s largest gold Exchange Traded Fund.  The report asks whether “the same gold bars are claimed by two distinct parties, the central bank which lent the gold and still accounts for it on its balance sheet, and an exchange-traded gold-backed ETF which thinks that it has title to those same gold bars.”

We don’t know all the facts, or where this story will lead, but here is a link to it, Amid Gold Market Turmoil, HSBC Taps Bank Of England For GLD Bars, if you’d like to know more.

We alerted you in March that some dealers were not able to make immediate delivery of gold and silver to their customers.  Because of the extreme demand for precious metals in these uncertain times, the prices for real gold and silver decoupled from the price of precious metals substitutes and paper benchmark prices.  The world gold and silver prices, index prices and the prices of ETFs that you read about in the newspaper were disconnected from the real price for physical gold and silver you can take home and put in your safe.  

Look, foreign governments are suspicious enough that they have been repatriating their gold from other national banks for some time now.  Americans have not been able to get a simple audit of the Federal Reserve or of our gold.  By the way, an audit is not just an inventory.  It goes beyond counting bars with the Fed or at Fort Knox.  An audit seeks to know if the titles have been compromised, it the gold has been pledged, promised, loaned, hypothecated, or re-hypothecated.  That seems to be where the real risk may be.

But there has been no audit.

This is no way to run a business.  Or a government.

Now, the tide has gone out on our financial system.  Big changes are headed our way.

You need gold and silver in these uncertain times to protect your wealth, yourself, and your family.

And by that, we mean real gold and silver.  That’s what we deliver here at Republic Monetary Exchange.  

We deal with real gold and silver.  That you own.  That you take with you.

Not paper.

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Gold Nuggets and News for May 2020

As we reach the midway of the month, here are some recent developments and news stories we don’t think our friends and clients should miss!

Food prices are starting to climb.

Here’s the headline from CNBC:  US grocery costs jump the most in 46 years, led by rising prices for meat and eggs.

“The Labor Department reported Tuesday that prices U.S. consumers paid for groceries jumped 2.6 percent in April, the largest one-month pop since February 1974.

“The price of the meats, poultry, fish and eggs category rose 4.3 percent, fruits and vegetables climbed 1.5 percent, and cereals and bakery products advanced 2.9 percent.”

It’s not illiquidity… It’s insolvency!

The problem on America’s financial landscaped is not something the Fed can fixed by just printing more money.  It’s not a problem of liquidity.  It’s a problem of insolvency.

That’s the view of Stanley Druckenmiller, the legendary hedge fund manager. 

“The consensus seems to be don’t worry, the Fed has your back,” Druckenmiller said recently. “There’s one problem with that.  Our analysis says it’s not true.”

Trillions in stimulus programs equal plenty of liquidity, but it doesn’t insure growth.  Stated differently, you can lower rates and pump money into the economy, but is it going to make people comfortable flying or make businesses want to expand capacity in the face of weak demand, or make people want to book cruises?  The stimulus programs aren’t enough to make the economy bounce back.  “It was basically a combination of transfer payments to individuals, basically paying them more not to work than to work. And in addition to that, it was a bunch of payments to zombie companies to keep them alive.”

Bloomberg characterized Druckenmiller’s views as “among the strongest comments yet by a Wall Street heavyweight on the bleak outlook facing the U.S.”

We’ve referred to Druckenmiller in these comments recently as among “the smart money” Wall Street figures who are buying gold.

If people don’t buy something, does the price go up or down?  If people don’t drive does gasoline go up or down?  If people don’t fly, do airfares go up or down?

Looping back to rising food prices for a moment.  The Consumer Price Index for April, released this week, was down 0.08 percent.  According to the Bureau of Labor Statistics, that’s the biggest monthly decline since December 2008.

But hold the phone a second!

Economist Robert Wenzel points out that the drop was in things that nobody is buying.  

But people still eat:

“A 20.6-percent decline in the gasoline index was the largest contributor to the monthly decrease. The indexes for apparel, motor vehicle insurance, airline fares, and lodging away from home all fell sharply as well.

“On the other hand,  food indexes rose in April, with the index for food at home posting its largest monthly increase since February 1974. The prices for food at home increased in the month by 3.5% and the prices for food away from home increased by 4.21%.

“The index for meats, poultry, fish, and eggs increased the most, rising 4.3 percent as the index for eggs increased 16.1 percent. The index for cereals and bakery products rose 2.9 percent in April, its largest monthly increase ever…. 

“Within a month or so, I expect the travel related price indexes to flatten out and then you are going to start to see major across the board indexes showing price increases given the money the Federal Reserve is pumping into the system.”

Republic Monetary Exchange  — Take delivery of your gold and silver today!

We are continuing to hear reports of other dealerships facing difficulty making delivery of gold and silver to their clients.  

Here at Republic Monetary Exchange we always recommend best practices and despite the difficulties others may have, we still have gold and silver in inventory.  

You can buy today and take delivery today!

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Gold Bull Room to Run 2016

How Long? (Before Gold Hits the New High)

Like Jeopardy!, today’s post comes in the form of a question.

How long?

It’s getting close, but how long?  

How long before gold makes a new all-time high?

We’re not trying to be tricky, since gold is already making new all-time highs all around the world. 

Gold has recently set new record highs in major currencies like the Australian and Canadian dollars, the Swiss franc, the euro, China’s yuan, the Russian ruble, the Korean won, the Swedish krona, the Indian rupee.

It has made new highs in lesser currencies as well, including the monetary units of – in  alphabetical order – Afghanistan, Argentina, Brazil, Chile, Columbia, the Czech Republic… and right on through to Vietnam, Vanuatu (that a South Pacific island nation, in case you’re prepping for a future Jeopardy! appearance), Yemen, and Zambia.  

But how long before gold makes a new all-time high in US dollars?

Gold traded as high as $1,900 in September 2011.  That means that with gold trading around $1,700 as we write, it will need to climb almost 12 percent to reach its all-time high.

That doesn’t appear to be a daunting task in this bull market.  After all, gold is up more than $650 an ounce since it low in 2016.  That a gain of 62 percent.

Twelve months ago, last May, gold traded at its low for the year of $1267.  It has appreciated more than 34 percent in a year.

As we identified long ago, gold is in a primary bull market.  

Whatever your feeling about the response of Washington and the Federal Reserve to COVID-19, the policies that have been implemented do not represent a change from those that have driven gold to its gains of the last few years.

They are a continuation of those liquidity and deficit spending policies.  We aren’t taking bets on when gold crashes through its old highs to new records.  It’s not a contest.  But it looks like it will be sooner rather than later.

To position yourself for profit and protection in the gold bull market, speak with an Republic Monetary Exchange professional today.  They are prepared to help you make gold and silver a part of your portfolio in a safe and secure way that will provide you with peace of mind.

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More About the Smart Money

Want to Know More? Hint: They are Gold Buyers!

Although we wrote about the “smart money” buying gold almost two weeks ago, we would like to loop back around to it again because of the importance of the subject for our friends and clients.

It started when we reported that newsletter writer Fred Hickey had tweeted this message:

“All the smart money: Dalio, Druckenmiller, Tudor Jones, Zell, Gundlach, Singer, Klarman, Einhorn, Mobius (and some who I know are loading up but are doing it quietly) are long gold and understand the simple concept Hugh Hendry explains here. Question is: What are YOU waiting for?”

It is a good observation.  We’ve been reporting to you all along as this crew of smart money began moving to gold.

For example in January 2019 we reported on Sam Zell this way:

“For the first time in his life Sam Zell is buying gold.

“It’s enough to make us sit up and take notice.  Sam Zell is a real estate billionaire many times over.  His Wikipedia entry repeatedly uses the word “largest” to describe Zell’s accomplishments.  

“His company, Equity Group Investments, Wikipedia tells us, “was the genesis for three of the largest public real estate companies in history, including: Equity Residential, the largest apartment owner in the United States; Equity Office Properties Trust, the largest office owner in the country; and Equity Lifestyle, an owner/operator of manufactured home and resort communities. With their entry onto the public markets in the 1990s, Zell became recognized as a founding father of the modern real estate industry.  In addition, Zell has created a number of public and private companies in various other industries.”

gold bars stacked in a pyramid

Those accomplishments pretty much guarantee Zell a spot on the smart money list.

About a year ago we reported on hedge fund manager and philanthropist Paul Tudor Jones when he proclaimed, “the best trade is going to be gold.”

“If I have to pick my favorite for the next 12-24 months, it probably would be gold. I think gold goes beyond $1,400… it goes to $1,700 rather quickly. It has everything going for it in a world where rates are conceivably going to zero in the United States.”

Badda-bing, badda-boom!  He got all that just right!

Last year David Einhorn, the founder of Greenlight Capital said, “I hold gold, and I am never going to get rid of it. I hope that I never have to use it.”

In January we reported that Einhorn explained his position this way:

“The bipartisan consensus is that deficits don’t matter – it implies we can always print our way out of trouble.  All told, we can count on aggressive fiscal and monetary policies in both good times and bad. Gold continues to be a hedge in our portfolio against adverse outcomes related to those policies.”

We also cited Ray Dalio and his attraction to gold back in January.  Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, says we’re going through a paradigm shift and you need to be forward looking.

“Get out of cash,” Dalio warned.  “Cash is trash.”  

He has a point.   

They all have a point.  They’re the smart money.

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Public Finance: Don’t Look Too Closely!

The exploding US debt and the frenzy of Federal Reserve money printing is a reminder that the whole enterprise of public finance is not something you want to look at too closely… unless you are prepared for some really ugly stuff.

You will come face to face with deceit, theft, cronyism, hypocrisy, waste beyond measure, string pulling and influence peddling, the raw exercise of political power for private gain, and enormous riches for the few and impoverishment for the many.

Estimates are that COVID-19 will add $8 trillion to the government’s debt load over ten years.  There’s a lot of room in $8 trillion dollars for the kind of corruption we described above.

The $2 trillion CARES Act stovepiped hundreds of billions of dollars to large corporations.  Companies that were perfectly capable of setting aside capital to protect themselves from predictable cyclical and other business challenges used their earnings for stock buybacks instead.  Then, having enriched their senior management with swollen values for their stock options, they turned to the taxpayers to bail them out. 

In other words, their profits are privatized while their losses are socialized. 

Perhaps an account of the CARES Act appropriations that we already reported encapsulates the nature of public finance.  While restaurant workers and store clerks and drivers and others – Americans 30 million strong – lost their jobs, right off the top the emergency spending bill provided $25 million for additional House of Representative salaries!

According to the Manhattan Institute, with the pandemic “stimulus” measures total federal spending will surpass $49,000 per household.  Since median household annual income in the US is $61,937, the government is taking the lion’s share of it… some in today’s taxes, some in tomorrow’s, some by means of currency destruction.

So far, we’ve been writing about the fiscal side of the picture, Washington’s borrowing and spending.  We’ll let Ron Paul speak to the monetary side of the picture:

“Each of the Federal Reserve’s responses to the coronavirus shutdown increases the distortions of the market caused by the Federal Reserve’s meddling with the money supply and interest rates,” says Dr. Paul.  “These increased distortions guarantee the inevitable crash will be much more severe than the current downturn. The one upside is that the next meltdown will likely lead to the end of the fiat money system and thus the end of the welfare-warfare state.”

Where will the buck stop for all this fiscal and monetary excess?  With the US dollar, of course.  It will have to be massively devalued along the way. 

But there is something you can do.  You can protect yourself and even profit from this destruction with sensible investments in gold and silver.  Your Republic Monetary Exchange professional can advise you on the steps to take.

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US Debt Calamity Dead Ahead?

Tell us something we didn’t know!

In big, bold type the scare headline on the Drudge Report reads, “TREASURY BORROWS TRILLIONS MORE.”

And that links to a Wall Street Journal scare headline that reads, “U.S. Treasury Expects to Borrow $4.5 Trillion in Fiscal Year as Stimulus Spending Soars.”

Here’s the story. 

During the current April – June 2020 quarter, the Treasury expects to borrow $2.999 trillion.  (Think how hard they must have worked the numbers to keep from going over $3 trillion!)  

That means that during the current quarter, the Treasury will borrow more than it did in the entire previous five years combined!

And that is scary.  But because you read these posts, you’ve seen in coming.

Two months ago (Charts and the Stampede to Gold), we wrote, “With businesses slowing down due to the Covid-19 pandemic, tax revenue will fall.  It will fall further still if a payroll tax cut is implemented.

“At the same time, government spending will rise at a relentless rate with new spending on health-related measures.  

“That means the red line (gross Federal debt) will turn steeply higher.”   

In fact, it’s $1.5 trillion dollars higher today!  Just four weeks later!

Actually, we have been telling you for a very long time that the US monetary system – having abandoned the discipline of gold – will wind up in a steaming pile of collapsing debt.  

It’s not as though this hasn’t happened to governments over and over again throughout history.  

But for some reasons our political classes and monetary authorities think this time it will be different.  But it is never different.

Oh, sure, they’ll come up with something to try to paper it over.  They are very clever.  A new dollar perhaps?  An International Monetary Fund scheme?  A currency represented as being backed by gold but that really isn’t?  

Who knows what they’ll come up with? 

But the smart money knows a flim-flam when it sees one.  We wrote about the “smart money” the other day.  (See our recent post All the Smart Money is Buying Gold.)

We’d like to include Jim Rogers in the smart money category.  He’s watching the money printing like we are and is buying precious metals again for the first time in years.  Rogers currently prefers silver, saying, “The gold-silver price ratio is near its record high and so I prefer silver to gold because it is cheaper [on a relative basis].”

Remember that the only gold and silver that will matter is gold and silver that you can hold in your hands.  Not precious metals stocks or ETFs or a paper gold promises.  

Make Republic Monetary Exchange your go-to advisors to protect yourself and your family with real money, gold, and silver, that you take delivery of.

read now: All the Smart Money is Buying Gold
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Look What They Are Doing to the Dollar!

Don’t Take Any Wooden Nickels

It’s time to take a closer look at the financial measures authorities around the world have taken in response to the Coronavirus.

Bloomberg estimates that between direct spending, new money and credit creation, bank guarantees and loans, governments have spent $8 trillion on “stimulus” measures.

That’s more than ten percent of global government debt, which totals over $70 trillion.

The US government alone has spent $2.3 trillion.  And that’s almost ten percent of existing US debt.

That’s not the end of it.  Washington has more spending already on the drawing boards: more aid, more cash, direct payment to farmers, government purchases of meat and other provisions, more payroll support, and infrastructure spending.

But wait!  There’s even more!

In a piece from the Mises Institute, The Fed Has Gone Nuts. And It Can Get Worse, business professor Peter St. Onge starts with what the Fed has already done:

“Pushed interest rates to zero and expanded into ‘unlimited’ buying of assets, now reaching to corporate bonds and local government bonds. These bring the same concerns we had in 2008: trillions in new money to dilute the spending power of current savers, along with the risk of ‘moral hazard’ where the government covers the losses for corporate, and government, irresponsibility.

“What’s more concerning is what the Fed might do next. Proposals are floating up for four very corrosive measures: negative interest rates; directly subsidizing bonds; writing Fed checks for corporate equity or for a universal basic income up to $72,000 per year; and letting poor countries effectively print their own US dollars.”

Now the group president Trump calls “the Squad” is getting behind something even crazier.  It’s a proposal that pops every few years.  In the latest incarnation it would have the Treasury mint two $1 trillion platinum coins, and add that amount, $2 trillion, to the government books against which it would write welfare checks to the American people.

Why platinum?  To pretend that this made-up coin is real money.  But they could use anything, plastic, paper, mulberry bark, or wood, print some numbers on it and call it trillions.  

But it wouldn’t be real money anymore that new digital bookkeeping entries on the Fed’s books represent additional real value.

Once upon a time the wise and experienced used to advise the young and foolish not to take any wooden nickels.  

These days Americans are apt to fall for just about anything.  

Here’s a chart a colleague shared the other day.  It represents the US money supply MZM (a measure of cash and cash-like deposits, Money of Zero Maturity) in green, against the gold price.

You can see that the money supply line that was already increased by a trillion dollars a year, turned straight up with the pandemic this year.

But notice that as the money supply climbs, it pulls gold right along with it! 

All of these shenanigans will end in ruination for the value of the dollar.

That’s why informed people refuse to take any wooden nickels.  They prefer to own gold and silver.

Contact us here at Republic Monetary Exchange today. And get out of the way of the coming dollar calamity.

The Fed is printing dollars like crazy!  

That’s one reason gold keeps marching higher!

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Silver Institute Report Calls for $19 Silver

The Gold-Silver Ratio Reaches Unprecedented Highs During Shutdown!

The Silver Institute, a trade association has released its annual report on silver, the World Silver Survey.

The report, produced for the Institute by a private research firm, forecasts the silver price to reach $19 this year.  That represents an increase of 20 percent over the next 8 months.  

We think that factoring in off-the-charts spending and money printing by the government, that forecast is conservative, substantially understating the upside for silver this year.  Our view is colored by our long experience of watching silver dramatically out-perform gold in bull markets gone by.

The challenges for the 2020 Silver Institute report was incorporating unknowns about the effects of the COVID-19 pandemics into its forecasts.

Factoring in what is known about virus-driven mine shutdowns, along with other projections, it concludes that new mine silver production will fall by 5 percent this year, with overall global supply falling by 4 percent. 

In then looks to the shutdown’s impact on end-users, including silverware and jewelry.  Not surprisingly, it expects industrial fabrication to fall by 7 percent, “as a result of lower visitors to retail stores and the appetite for discretionary spending taking a hit.”

silver to gold ratio May 2017

The offset is “strong interest in silver from retail investors.”  The report forecasts a significant 16 percent increase in investor demand for silver bars and coins.  

Strong demand from institutional investors will contribute to higher silver prices this year, as well.  The report cites stimulus measures (that would be deficit spending by governments and central bank money printing), negative interest rates, and the other global macroeconomic concerns that will drive institutional silver buying.  

The report also notes the historically high gold-silver ratio, which suggests that on a historical basis silver is hugely undervalued compared to gold.  The ratio as we write this is about 113 to one, meaning that silver is so inexpensive that it takes 113 ounces to equal one ounce of gold.

A gold-silver ratio is this stratospheric range is simply unprecedented in all history.  As you can see from the five-year chart above, the ratio catapulted in this range with the pandemic shutdown, and even briefly touched 125 to one in March.  

The World Silver Survey takes note of this anomaly, which will prompt additional investor inflow into silver.  Stated differently, “silver should also benefit from bargain hunting, on the back of its historically low relative value compared to gold.”

Finally, one commentator, echoing the call by Bank of America earlier this month for much higher gold prices, notes drily, “They can’t print silver, either!”

Speak with your Republic Monetary Exchange professional today about silver’s place in your portfolio for both profit and protection.

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All the Smart Money is Buying Gold

What is the smart money doing?  

For once it’s pretty clear.

They’re buying gold.

But don’t take it from us.

Fred Hickey writes a newsletter called The High Tech Strategist.  He’s been at it since 1987.  

Here’s a recent tweet from Hickey;

“ALL the smart money: Dalio, Druckenmiller, Tudor Jones, Zell, Gundlach, Singer, Klarman, Einhorn, Mobius (and some who I know are loading up but are doing it quietly) are long gold and understand the simple concept Hugh Hendry explains here. The question is: What are YOU waiting for?”

Hendry is a former fund manager who was asked in 2010 interview about the Greek sovereign debt crisis.  He answered succinctly (and correctly), “I recommend you panic.” The explanation from Hendry about gold that Hickey refers to is equally succinct:  In trying to debase the dollar to help the economy, the Fed will “definitely” help gold.  

The day before his comment about the smart money, Hickey tweeted this:

“With ink not yet dry on latest half trillion $ spending bill, this story of another planned spending splurge should scare the devil out of anyone concerned about deficits, national debt & unlimited QE (to “pay” for all this). Gold protects against such craziness.”

Hickey says that despite the sell-off, the stock market is still in a bubble, just like it was in 2000 and 2007.  In a recent interview, he said, “Just look at market cap-to-GDP which is supposedly one of Warren Buffett’s favorite indicators. It’s currently at 130%, a level that has only been seen twice: Today obviously, and in 2000. That means we’re still at bubble levels.”

In fact, Hickey says, we’re looking at the greatest downturn since the Great Depression.”

It is very likely that once gold runs through its all time high of just over $1,900 an ounce, more people will take notice and quickly propel gold much higher

We recommend beating the rush and buying now at these still advantageous levels.  Contact your Republic Monetary Exchange professional today.

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Economic Chaos!

Economic chaos has descended on the land.  

And in such a time, there is nothing like gold and silver.

But is it a time of chaos?  

Look around!

This is what you’ll see:

  • Crashing crude oil prices dropped into negative territory.  Interest rates are negative.  Both are not only unprecedented, they are unnatural!
  • Doug Noland from Credit Bubble Bulletin says, “Now on a weekly basis, we’re witnessing things that couldn’t happen – actually happen.”
  • David Stockman writes that “Lockdown Nation is heading into an economic collapse of biblical proportions.”
  • 26.5 million Americans filed for unemployment in the last several weeks.  Washington spends trillions it doesn’t have.  The Federal Reserve prints trillions more.

Economic chaos!

170 countries will have negative economic growth this year, according to the head of the IMF.

Biblical proportions.

A food crisis could be next. 

The Tyson Pork Plant in Madison Wisconsin has 58 confirmed positive cases as of Sun. 4/26

Tyson Foods, Inc. was forced to shut down a processing plant in Washington state.  The New York Times reported last week that meat processors “have become major ‘hot spots’ for the coronavirus pandemic… The health crisis has revealed how these plants are becoming the weakest link in the nation’s food supply chain, posing a serious challenge to meat production.”

In times of economic chaos, of revolutions, invasions, famine, monetary failure, governmental bankruptcy and collapse, owning gold and silver is not merely important…  

It’s crucial!

Find out what you need to do.  Your Republic Monetary Exchange precious metals specialist is available to speak with you in confidence about protecting your assets and your family in this period of economic chaos.  Contact us today.

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Things Fall Apart

“Things fall apart; the center cannot hold.” –W.B. Yeats

Here’s the headline: “The US is suffering the fastest deterioration in operating conditions for over 11 years.”

The economy is turning down even faster than anytime during the Great Recession.   

How could it not?  Is anyone surprised that with restaurants and gyms, barber and beauty shops, and so-called non-essential businesses shuttered, while doctors can’t treat their patients or perform elective surgeries, and dentists are furloughing their staffs, and schools and travel mostly shut down, and movie theaters and ball parks are closed…

… that 26 million people have filed for unemployment in the last five weeks?

The chief economist for one of the big bank holding companies just observed that “it would take a miracle to keep this from turning into the Great Depression II.”

But there will be no miracles.  The politicians and PhDs running policy are the exact same one who had the country $24 trillion in debt and the Federal Reserve holding trillions in assets it paid for by monetary fraud to begin with.  Before the coronavirus shutdown.

Oh, it was legal monetary fraud, but it was fraud nonetheless.  Why do you think the Fed so strenuously hides what it is doing?  Why do you think it is terrified of being audited?

So, the ones who sold us the map that marched us into this swamp are being hired as guides to march us out.  

So they come up with more spending.  And more money printing.

Sure, more debt will make us economically stronger.  And more legal counterfeiting will make America more resilient.

And here’s how deep the problem runs:  The governing classes are almost unanimous about these “remedies.”  

Having never gotten anything right yet, they are sure… absolutely sure… that ruining the dollar and burying the people in more debt is the exact right thing to do.

As Yeats said,” The best lack all conviction, while the worst are full of passionate intensity.”

So, here’s a quick update.  Today, as I write this, the national debt is $24.609 trillion.  

That’s up $1. 308 trillion just since January 1.  

In the same days, the Fed has purchased an additional $2.4 trillion of debt instruments including junk bonds  with money it just made up!

How could gold not keep marching higher?

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Stop the Presses! Bank Discovers Fed Can’t Print Gold!

Bloomberg:  “Gold to Reach $3,000—50% Above Its Record, Bank of America Says”

You’ve probably seen it in black and white movies.  Movies set in the old days when everyone read newspapers. 

Upon discovering the most unexpected and shocking news, uncovering a major corruption scandal, a plot, or crime, the intrepid reporter bursts into the newspaper building shouting, “Stop the presses!”

We have such a moment now!

The nation’s second largest bank has discovered that the Fed can’t just print gold like it can dollars!  

Stop the presses!

Stop the presses!!!

Bank of America has issued a new report raising its gold price target by 50 percent, from $2,000 to $3,000 an ounce.

The report is titled, “The Fed can’t print gold.”  

Here’s the payoff line: “As central banks and governments double their balance sheets and fiscal deficits respectively, we have also decided to up our 18 month gold target from $2,000 to $3,000 an ounce.”

“With the Fed committing to do whatever it takes to prevent widespread bankruptcies across the US, Congress injecting a $2tn fiscal stimulus plan, and economic growth on standstill until there is a cure or a vaccine, inflation could rise even if GDP does not, says
BofA.  “This backdrop should prove very positive for gold, in our view….”

“Another important point to remember,” according to the report, “is that, just as central banks are socializing risk in financial markets, governments are increasing their spending like never before during peacetime. Fiscal spending plans across developed economies are nothing short of breathtaking whether we look at them in dollar terms or as a percentage of each nation’s GDP.”

We’re glad to see others taking note of the unprecedented money printing and spending, but don’t mind noting that others (ourselves included, by the way) saw this period coming.  More than six months ago gold expert Ron Paul made an uncommon prediction.  Dr. Paul said that he expected gold prices to reach $3,000 by the end of this year, 2020, a year earlier than the BofA target.

In any case, we wonder what will happen to gold prices as more people wake up and a critical mass of the public starts to notice this new, hyper-overdrive, rocket-booster fueled, proton-pill juiced, steroidal-speed freak phase of Washington’s spending and Fed money printing.  

That will be a real stop the presses moment!

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U.S Mint Shuts Down

Coronavirus Closes Mint

The US Mint at West Point has shut down because of the Coronavirus.

The West Point facility mints American Eagle investment gold, silver, and platinum bullion coins.  The production halt comes at a time of surging investor demand for the gold and silver coins.

Many dealers across the country are already out of gold and silver inventory.  The are making promises to their clients about eventual delivery, but at unknown dates in the future.

Republic Monetary Exchange still has gold and silver available for immediate delivery.  But you must hurry.  Supplies are beginning to dry up.  

Officials say the West Point Mint intends to reopen eventually, but it remains closed for the foreseeable future.  The San Francisco US Mint shut down in March.

To repeat, for now, Republic Monetary Exchange still has gold and silver in inventory.  You can buy today and take delivery today!  

But the closing of the New York mint will exacerbate supply issues.  

Contact Republic Monetary Exchange today!

Consumer Prices to Double?

“We are in process of destroying the dollar.”  

So says George Reisman.  He is Professor Emeritus of Economics at Pepperdine University.  

Tweeting observations about the current economic developments, Reisman says you should “not be surprised if, a year from now, prices are 20 percent or more higher than they are today and that tens of millions of elderly people on fixed incomes suffer greatly as a result.”

“The recently enacted ‘stimulus’ legislation costing $6.2 trillion can be paid for only by the printing of new and additional money in that amount, which will represent an increase in the M1 money supply to substantially more than double its present height,” tweeted Reisman.

“This amount of increase in the money supply is sufficient by itself to double or more than double prices and totally destroy the finances of the elderly, if not by next year, then over the next few years.”

“We must not allow trillions to become the new billions, and then the new millions, and the paper dollar to become the new toilet paper,” says Professor Reisman.

We’ve Been Wondering the Same Thing!

You’ve probably noticed the “dead cat bounce” in the stock market.  

That’s a market term taken from the expression that even a dead cat will bounce if you drop it from high enough.  With America shut down, enormous amounts of capital destroyed in the process, and the chances of it returning to what things were like before increasingly remote, the term certainly applies.

We thought we would share the following from Brian Maher of The Daily Reckoning:

“It has made obvious — to all with open eyes — that the stock market is a crook’s game, a vast swindle.

“How else could the stock market regain so many of its initial pandemic losses… while 16 million Americans file unemployment claims… and second-quarter GDP may contract 40%?

“The Federal Reserve has expanded its balance sheet some $1.6 trillion these past four weeks.

“There is your answer.”

Money Supply Growth!  

And finally, the graph of the day.

This is a 10-year chart of the M2 US money supply.  M2 is a measure of cash, checking deposits, and other things that are thought to be cash-like, or near money, including money market accounts, and savings deposits.  

The money supply has been growing fast to begin with.  It doubled in the last ten years.

In fact, the chart has now turned straight up!

Doug Noland notes that “M2 has expanded more during the past six months than it did the entire nineties.”

Buckle up!  They’re printing dollars like there’s no tomorrow!

Wouldn’t it be wise to get out of dollars and into something that authorities can’t just print?

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Look What They’re Doing with the Money!

No Wonder Gold is Headed Higher!

The Federal Reserve is printing money like crazy!  

That’s not just an expression.  The Fed is unhinged!

The following charts say it all.  What it shows is completely unprecedented!  

It is a chart of Fed assets.  It represents what the Fed carries on its books, anything it has paid money for.  That includes government bonds, mortgage and other securities.  And now, as we have reported, even junk bonds.   

How does the Fed pay for the assets it buys?  It creates the money out of nothing.  It creates it out of thin air.  It buys assets in the afternoon with money that didn’t exist in the morning!

Perhaps not one person in a thousand understands this flim-flam.  We call it “printing money,” although it’s really done on computers.

On the left side of the chart you can see that Fed assets, which had been flat at about $800 billion dollars for a long time, suddenly started climbing.  This was the Fed’s response to the Mortgage Meltdown in 2008.

Eventually it printed enough to get Fed assets up to about $4.5 trillion, mostly buying trash from the big banks to bail them out.  

Of course, in diluting the value of the dollar by printing more of them, the Fed ran the price of gold to all-time highs.

Now, in response to the coronavirus shutdown, the Fed is printing money again.  Look at the right of the chart.  

The line has turned straight up!  

In a matter of a few days, the Fed has printed close to $2 trillion!

This is diluting, cheapening, the value of the dollar, much faster than anything the Fed has ever done before.  It is hard to comprehend how much money the Fed is printing in such a short period.  It took about three years last time to do what it has now done in weeks.

As we say, it is completely unprecedented.  It is train wreck for the purchasing power of the dollar.

But it will drive gold – and silver, too – much, much higher.

Speak with your Republic Monetary Exchange gold and silver professional today about the train wreck ahead of us.  Find out how to avoid the financial carnage and profit from this recklessness.

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Scoundrels Found in Washington!

D.C. Doesn’t Care About the Dollar or Debt

A lot of timely questions and second thought about the coronavirus and the lockdown are appearing in the news right now.  We think it is always wise to question everything government does, but as we’ve said many times, we are neither virologists nor epidemiologists.

Our expertise in money.  And we can see what is going on in Washington in this moment of our national crisis.  

It is not good.

We view it as hard evidence that the US debt problem will not be solved.  It will end in a tragic bankruptcy and the destruction of the dollar.  It will cause people to flee to gold and silver.  

But we’re getting ahead of our short story.

At the end of March, Congress passed and the President signed into law the CARES Act.  It is a $2.3 trillion emergency spending measure aimed at tackling the US economic shutdown and the coronavirus pandemic.

$2.3 trillion is a lot of money.  It is the largest relief bill in history.   Trillion-dollar deficits are new enough that they are still shocking to most thinking people.  But with the CARES Act, what was going to be a trillion-dollar deficit has exploded.  

The 2020 deficit now is on track to be more than $3.8 trillion!

But it is a crisis, right?  Who cares about the price tak if all that spending is necessary, right?  These are emergency appropriations, right?

Well, apparently not.  Former Reagan administration Budget Director David Stockman has gone through the 880 page bill.  We’ll pass along some of what he found in his own words:

$25,000,000 for additional salary for House of Representatives (blows your mind, right off the bat!)

$100,000,000 to NASA (because, who knows why?)

$20,000,000,000 to the USPS (because, why the hell not?)

$300,000,000 to the Endowment for the Arts (Ah, screw it – let’s do it! They’ll never know)

$300,000,000 for the Endowment for the Humanities (because, not that many people even knew that was a thing?)

$15,000,000 for Veterans Employment Training (for when the GI Bill isn’t enough)

$435,000,000 for mental health support (Man, oh man, that’s a lot of suicide hotlines)

$30,000,000,000 for the Department of Education stabilization fund (Whoa, that’s a big one! Wonder how much goes to the NEA?)

$200,000,000 to Safe Schools Emergency Response to Violence Program (I guess the virus is kind of violent)

$300,000,000 to Public Broadcasting (NPR has to be bought and paid for by somebody. That somebody is you.)

$500,000,000 to Museums and Libraries (Who the hell knows how we are going to use it?)

$720,000,000 to Social Security Admin (But get this – of this, only $200,000,000 is to benefit people. The rest is for admin costs.)

$25,000,000 for Cleaning supplies for the Capitol Building (Seriously, it’s on page 136)

$7,500,000 to the Smithsonian for additional salaries (Wait a minute, what about the virus?)

$35,000,000 to the JFK Center for performing Arts (See above)

$3,000,000,000 upgrade to the IT department at the VA (I guess $3 billion ought to cover it.)

$315,000,000 for State Department Diplomatic Programs (What the hell does this mean?)

$95,000,000 for the Agency of International Development (What is this? Let’s keep the money here and clean up the streets of S.F. and L.A.)

There’s much more like that, but we’ll stop there because you get the point.  The national debt was unpayable before this bill, but even that is not enough for the scoundrels in Washington.  They will even use a deadly crisis to fund their pet projects and to spend money that benefits their crony constituents.

They are not capable of acting statesmanlike, not even in a crisis.  They will not deal with our fiscal problems.  They will not address the debt.

They will tank the US dollar.

Buy gold and silver now.

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Do the Opposite of the Fed!

If they buy junk, you buy gold and silver!

Monetary policy in this country is coming apart at the seams.  In our last post, we commented on the Federal Reserve now venturing into junk bond territory.  

If the Fed is buying junk bonds for its portfolio, it’s like a screaming siren alarm going off in the middle of the night that you need to do the exact opposite.  If the Fed is buying risk assets, you must buy safety assets, gold and silver.  Go to the high end of the spectrum to protect your personal wealth while the dollar in being destroyed.   

By the way, it appears that the Federal Reserve does not even have the legal authority to buy junk bonds (more on that from Michael Shedlock, here).  But we’ve never thought legality would stop the Fed from doing something foolish.

Here’s the way the New York Times reported on the Fed’s new $2.3 trillion foray into dangerous territory:  “The Fed announced that it would use Treasury Department funds recently authorized by Congress to buy municipal bonds and expand corporate bond-buying programs to include some riskier debt.”

Get that?  “Riskier debt.”  

The lapdog press couldn’t even bring itself to use the word “junk” until the 28th paragraph, long after most readers are finished with the story.

The 2008 panic and the bursting of the mortgage bubble should still be fresh in the minds of many of our clients.  The mortgage industry and those that loaded up on subprime mortgages – we’re talking about you Lehman Brothers and Bear Stearns – learned that risk assets have, well, risk.  Especially headed into a recession.  As we were by the end of 2007.

So now, headed into a brutal recession thanks to the staggering economic costs of the COVID-19 lockdown, the Fed is following the example of Lehman and Bear.  

When the Fed is buying junk, it’s a good time buy precious metals.  A growing number of people are figuring that out.

Because of the extreme demand for precious metals, the prices for real gold and silver have decoupled from the price of gold substitutes and paper benchmark prices.  The world gold prices and index prices you read about in the newspaper are not the real price for physical gold you can take home and put in your safe.  There is not enough gold at those benchmark prices.

Most dealers are unable to make prompt delivery to their customers at any price.  

But Republic Monetary Exchange has gold and silver.  Today!  For immediate delivery!  Right here in Phoenix!  

But you must hurry.   We don’t know how long we will be able to meet the extreme demand.  

It is strictly first come, first serve!

Buy TODAY, take delivery TODAY!  

 Call your Republic Monetary Exchange gold and silver professional today.  Lock in your order and take delivery today.

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silver to gold ratio May 2017

Gold and Silver: It’s Going Fast!

Gold took a big jump on Thursday (4/9) when the Federal Reserve announced its latest monetary outrage.  

The Fed is ramping its money printing to manic levels so that it can even buy junk bonds!  

Junk bonds.  Bonds that aren’t even rated investment grade.    

The Fed is stepping off the financial precipice.

It’s a long ways down for the dollar.  

The CNBC story said that gold jumped $50 “on the view that the Fed initiatives could be inflationary.”

Could be?

Could be?

For all of its other excesses, the Fed now comes up with a new $2.3 trillion dollar plan that includes buying junk bond ETFs.  Even as the economy is crashing.  

What will the Fed do next?  Start buying stock in individual companies?  We’re getting close to that.  You think we’re in a pork fest now?  That will be Washington cronies going hog wild at the special interest trough!  

It’ll be Mussolini time in America.

Now more than ever, you need to and pay attention to your portfolio and contact Republic Monetary Exchange.  If the Fed is adding junk to its portfolio, you need to do the opposite and add the most enduring and valued money of the ages to yours:  gold and silver.

We advise you to act now!  Do not delay!  But take the following warnings to heart:

WARNING:  Our competitors are out of inventory.  Some are promising to deliver gold and silver to their clients at some unknown, unspecified date far off in the future.  

WARNING:  If you pay them now, they say, they will try to get you gold and silver in six or eight weeks or some other time down the road and deliver it to you then.

WARNNG:  We strongly advise you against doing that.  Especially in these volatile times.  And especially when Republic Monetary Exchange has inventory on hand for immediate delivery!

While other gold dealers are unable to make deliveries., Republic Monetary Exchange still has inventory.  

But it is going fast!  

It’s first come, first served!

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Good Advice from Rich Dad!

So, what are you going to do with your coronavirus stimulus money – otherwise known as the economic impact payment?  

Its money headed your way as early as mid-April, part of the $2 trillion bill Congress passed, and President Trump signed last month.

The economic impact payments amount to $1,200 for individuals, $2,400 for married couples and $500 for each qualifying child.

Robert Kiyosaki has some great advice for that money.  Use it to buy silver.

Not many people can claim to have had an impact on the public’s financial conversation of Robert Kiyosaki.  

Kiyosaki is the author of the author of Rich Dad Poor Dad, the best-selling personal finance book of all time.  He has taught tens of millions of people around the world to think about money and financial independence differently.  

His reach has been extraordinary.  Robert has authored 28 books which have sold more than 40 million copies.  But he does more than that, having created board games and software games to teach financial literacy both children and adults.  And then there is are speeches, interviews, articles, seminars…

Robert Kiyosaki understands paper money and the Federal Reserve.  And he loves silver!  He thinks it is among the best of all possible investments, especially in times like these.  “Silver is the most undervalued, lowest-risk, best investment of all asset classes,” he says.

Now he suggests that if the government gives you free money, you should use it wisely.  Don’t save dollars, says Kiyosaki.  Why save dollars when “Fed counterfeiting is printing trillions of fake dollars?”  

One of the things he recommends doing with your stimulus payment is buying silver.  “It’s the best buy for future security!”

We think that makes sense, too.  Afterall, the government is already $24 trillion dollars in the red.  When it passes a new spending bill, it has to borrow or print the money to fund it.  

Kiyosaki says he won’t stop buying silver until it hits $40 an ounce.

Talk to a Republic Monetary Exchange professional today to learn more about investing in silver.

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How Did We Get Here?

12 MONTHS OF MARKET CALLS, ADVICE, WARNINGS, AND RECOMMENDATIONS 

See Where We’ve Been and What We’ve Said about Where We’re Going! 

Here at Republic Monetary Exchange, we spend a lot of time and energy to see that our friends and clients get the very best market analysis possible.  And while we don’t claim modern-day Nostradamus status, we have a distinct advantage over others who attempt to look down the road as we have done:  We have been at this a long time and have seen a lot of monetary malpractice first hand, and have studied the precedents from other times and places.  

We thought that now, with America at an inflection point, not quite moving to restore our former state, and only on the verge of moving into a “brave new world,” it would be helpful to review some of the market calls, advice, warnings, and recommendations we have made over the past 12 months, beginning last April.  

We’ve taken short extracts from our popular blog posts over the year, highlighted essentials, and provided a link to the entire commentary.  

So here you go: 

IT’S THE TITANIC AND THE ICEBERG- FULL SPEED AHEAD
April 5, 2019

A look back at 4/5/19:  Even a year ago it was apparent that the Fed would have to revert to more QE money printing to try to inflate away the otherwise unpayable national debt.

The Federal Reserve “printed” almost $4 trillion during the Quantitative Easing episode.  Most of that hasn’t entered the consumer economy yet, but a lot of it has been stovepiped Wall Street’s way; hence the stock market bubble.  Watch out. 
There’s no reason that it won’t try to inflate away much of the national debt with more money printing.  
Of course, that will sink the dollar.  And send gold prices to the moon.    
The debtberg lies straight ahead.  Think of the Titanic.  We are perilously close and incapable of changing direction in time.  
You need to protect yourself and your family with gold. 

THE FED BUBBLE
April 12, 2019

the fed bubble

A look back at 4/12/19: It is impossible to know in advance what exactly will pop the latest central bank money bubble.  You can only know for sure that it will pop… 

None of this will be enough to keep the stock market bubble from popping, no matter how much it gets juiced.   You can juice a runner with something to keep him going, but not forever.  Eventually, he can’t be juiced any more.
We survey world events -- deep economic trouble in China, the European Union coming apart at the seams, trade hostilities growing – and add in a weakening domestic economy – and there is no shortage of pins to pop this bubble.
You’ll be happy to have moved to gold when the air comes out of stocks.  And wait until you see what happens then, even crazier Fed policies like “helicopter money” that we wrote about here, and even “Modern Monetary Theory,” the newest hyper-inflationary enthusiasm of people like Alexandria Ocasio-Cortez.  
We’ll keep you informed.  But get out of the way. 

Now.

MMT AND HELICOPTER MONEY 
April 26, 2019

A look back at 4/26/19:  We ourselves hoped against hope a year ago that Washington wouldn’t buy the Modern Monetary Theory nonsense.  But it’s being implemented today in the Fed’s Covid-19 policies.

You can’t believe how crazy things are in Washington.
Things haven’t been sound on the money front for a long time.  Certainly not since the Fed was created and we left the gold standard.
But things have gotten crazier than ever.  Now people in Washington and their academic minions are working on hyper-inflationary schemes you probably haven’t even heard of! 
Like “Helicopter Money.”  And “Modern Monetary Theory.”  That’s the one Alexandria Ocasio-Cortez likes.
The Fed’s printing press has been destroying the dollar anyway, but now the crazies want to get their hands on it.
…MMT is all the rage.  Academics who should know better (and they would know better if they had studied historical schemes like John Law’s Mississippi Bubble debacle three hundred years ago) are climbing aboard.  And politicians, many of whom will subscribe to any scheme that allows them to promise to give things to people and get re-elected, are falling all over themselves to sign up.
MMT hasn’t reached critical mass yet, but I suspect it will soon.  Remember the old saying that those whom the gods would destroy, they first make mad.
Protect yourself and profit from the madness of our times with gold.   

HANGING BY A THREAD
May 1, 2019

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A look back at 5/1/19: We developed quite a reputation for our timely warnings about the stock market at the end of 2018.  And we earned that reputation again this year…

What took place in stocks late in the year can honestly be described as a bloodbath.  Only the most extraordinary policy reversal by the Federal Reserve was able to keep Wall Street, hedge funds, and their robot algorithms trading in the game.  
… Stock market valuations are an illusion, the product of the Fed’s monetary sleight of hand.  
In other words, the stock market is once again hanging by a thread.
Now you would think that after the dot.com bubble and the housing bubble, the people would be in no mood for a third Fed-engineered bubble in this young century.  But the people don’t really understand how these things work.  And the media doesn’t help them.
That’s why we take it as part of our job to help them figure it out with these posts, to show them the wizard behind the curtain.  

ANOTHER BUBBLE
May 8, 2019

A look back at 5/8/19:  Once again we pointed out last May that the stock market bubble would be popped… because that is the fate of all bubbles… 

This stock market is a bubble.  It’s not a bubble because we say it is a bubble.  It’s a bubble because like all bubbles it is driven by the artificial creation of money and credit.
And like all bubbles, it will meet its pin.
That pin could be anything.  Expected or unexpected.
Now, you would think that after the dot.com bubble and the housing bubble, the people would be in no mood for a third Fed-engineered bubble in this young century.  But as we have been saying, the people don’t really understand how these things work.  
And the media sure isn’t going to tell them. 

GOLD TAKES OFF!  NEW SILVER STRENGTH!
June 20, 2019

A look back at 6/20/19Last summer we identified the beginning of the new bull market…

We cannot be more clear:  These powerful moves in gold and silver are not accidents.  The world is growing more dangerous by the moment, and central bank authorities, not just at the Federal Reserve, but in Europe and around the world, know no other course but massive credit creation and money printing.  
It is a path of dollar destruction.  
It is a road of no return. 
We advise our friends and clients to add aggressively to their precious metal holdings now. 

TWO THOUGHTS FOR THE SECOND HALF OF 2019
July 2, 2019

A look back at 7/2/19:  A few months earlier, in April, we had advised clients that “so far this year, any pullback of gold below $1,300 has been a favorable opportunity to add to your holdings.”  

By June, with the new gold bull market underway, we raised our target, suggesting clients take advantage of any dips below $1,400.  We got a few such breaks in July.

Still, modesty demands that we chalk up to good luck that our clients had several opportunities to buy gold below $1,300 as we suggested before the bull market sprang to life in June….
We would like to suggest now that any pullback to $1,400 or below is a good gold buying opportunity.  But be warned:  it may not last.  There is a very real and broad-based rotation into gold taking place at the level of governments and major institutions globally.  
Something big is happening.  Take advantage of the price break while you can.  

THEY’RE BUYING GOLD
July 14, 2019

China adds gold in December

A look back at 7/14/19:  If you could watch only one indicator for the future of both the dollar (lower) and gold (higher) it should be what foreign central banks are doing…

Foreign governments and their central banks have lost faith in the US dollar.  
Trust in the dollar dates back more than a century when people used expressions like “sound as a dollar,” or “the dollar is as good as gold.” 
Although faith in the dollar lasted for a long time, today it is eroding rapidly.  
… Foreigners have reasons of their own for shying away from the dollar.   Things like the Iraq war didn’t help.  Economic sanctions that have replaced diplomacy are another reason that foreign nations are abandoning the dollar.
But those reasons wouldn’t really matter, and the dollar’s preeminence would last, if the dollar were still as good as gold.
But, of course, it is not.  
That’s why China added 10.3 tons of gold to its reserves in June.  That’s the seventh straight month that China added to its official gold position.  It is in addition to the 74 tons it added in the six months through May.  
The last year has seen China reduce its US Treasury holdings by around $70 billion.

THE BULL MARKET:  GOLD AND SILVER HEAD HIGHER!
August 3, 2019

Bull vs Bear Market Gold

A look back at 8/3/19In this post we confirmed the new gold and silver bull market was off and running...  

Other authorities, like gold expert and former presidential candidate Ron Paul, have joined us in identifying this as a gold and silver bull market.  
Let’s review what has happened.
Gold is up more than $400 an ounce since its low of $1046 in late 2016….
This market is just getting going.  Wait until you see what happens when large swaths of the public begin to realize they need to protect themselves from stock market bubbles, criminally destructive monetary policies around the world, and compounding government and corporate debt.  
Then you won’t need a textbook definition to recognize the bull market! 

DEFAULT RISK
September 10, 2019

A look back at 9/10/19:   Even before COVID-19, few Americans had a clue how their prosperity will be impacted by the rippling waves of default and bankruptcy that were already on the horizon.  But if it was bad before, now it is about to become overwhelming…

One of the most important reasons to own gold and silver is to avoid major risks common to stocks, bonds, banks, and other financial assets and transactions:  the risk of insolvency and default.
All these financial markets and institutions carry a risk of insolvency and default.  Those are risks that grow more threatening with each passing day.  
But gold and silver are monetary commodities in their own right.  They are not claims to something else somewhere else down the road.  The value of an ounce of gold or silver is utterly indifferent to the issuer’s total debt, or the wisdom of its political leaders.   An ounce of gold is an ounce of gold no matter whose image or national motto is engraved on it.  
Its value is not contingent on someone else’s integrity.

THREE MORE NUGGETS OF NEWS
September 24, 2019

A look back at 9/24/19:  We made a pretty good call when we warned our friends and clients about the October Effect in the stock market.  The DJIA hit a high of 27.000 at the beginning of October and began falling.  Hard.  Over the next three months, it fell to 21,700.  That’s a loss of more than 20 percent.  Same with the S&P500.

On the evidence, we believe the stock market is being floated on Fed policy and not on economic reality.  Indeed, the level of corporate debt is so high that there is a real risk of a prairie fire of defaults and bankruptcies sweeping corporate America in the event of a and economic downturn.
In any case, as September comes to an end, we want to warn stock market investors of the October effect.  Goldman Sachs is warning about October volatility, which it saying runs 25 percent higher than other months dating back to 1928.
The October Effect stock market crashes include the Panic of 1907, Black Tuesday (1929), Black Thursday (1929) Black Monday (1929) and Black Monday (1987).

IMPEACHMENT AND THE STOCK MARKET
October 1, 2019

Trumpflation and Gold

A look back at 10/1/19: Once again we warned that the stock market was being sustained by money manipulation and that a crash was inevitable, regardless of political developments…

President Trump says that if he is impeached, the stock market will crash.
We think that he is right.  
We also think the stock market will crash even if he is not impeached.
That is because stocks are kept aloft by monetary policy.  It is a neat trick, to appear to levitate the entire economy by monetary magic and the printing press, but that is an illusion that will shatter….
All evidence and precedent suggest another stock market crash is inevitable.  We urge you to avoid the risk and to move to the safe havens of gold and silver – no matter what happens with the impeachment.

GOLD COINS FOR BLACK SWANS
October 9, 2019

A look back at 10/9/19: We have insisted all along that the problems with our debt and monetary malpractice would be their own undoing.  They could be triggered by anything.  In this October post, long before anyone heard of COVID-19, we speculated about some of those triggers, including “the spread of disease like the flu epidemic of a century ago…”

A Black Swan is an unexpected event.
9/11 was a Black Swan event.
So, what will the next Black Swan events be?  It’s hard to say because they are unexpected….
Making a list of the possible trigger events for such a calamity is an inexhaustible exercise.  We write often about the financial possibilities since they loom larger and more certain with each passing day:  the ending of the dollar reserve system; unpayable sovereign and other debt; cascading government and private bankruptcies; bank failure; foreign dumping of US treasuries; runaway inflation and crippling stagflation.
But we need to allow for even less predictable Black Swans that can trigger these economic/monetary calamities.  Those include everything from the sudden outbreak of war, widespread crop failures, and the spread of disease like the flu epidemic of a century ago, to uncontrollable civil turmoil, power grid failures, earthquakes, volcanic eruptions, and even less likely events like an asteroid impact.
Unexpected?  Unlikely?  Precisely the qualities of the Black Swan events that order and reorder just about everything in our lives.

MONEY PRINTERS GONE WILD!
October 27, 2019

Trump Chooses the Printing Press

A look back at 10/27/2019:   The Fed didn’t announce it.  In fact, it tried to hide it.  But we noted a new round of Quantitative Easing in late October.  Now, less than six months later, it is proving to be bigger that anyone could have imagined…

The Federal Reserve has quietly launched a massive new round of money printing.  
We hope you will take time with this very important piece.  It should be shared widely.  It describes a new phase of Fed monetary management, a turning point that people will look back on as a crucial moment in the US economy, and one that will drive gold to new heights.
The Fed has quietly launched a new round of Quantitative Easing (QE), the most outrageous monetary experiment in American history.… 
This money supply growth and the new QE is a policy error that must result in serious consequences for the general economy, as well a much higher gold prices.
The Fed can create more dollars with a computer keystroke, but it can’t print more gold.
That’s why gold goes up.  

ANOTHER RATE CUT?  MORE THAN MEETS THE EYE?
November 3, 2019

A look back at 11/3/19:  We knew that liquidity trouble was brewing behind the scenes in the US economy and pointed it out in this post.  The depth of the liquidity problem is still not widely understood and has been overshadowed by the Fed actions of the last month.  But it will not go away…

The stock market is cruising along around all-time highs.  The economy, we are told, is doing great.  In fact, we are in the longest economic expansion in history, we are told.  On Friday we learned what the Fed would already have had a peek at, that employment was strong, with “blowout” numbers.
But if everything was hunky-dory, why did the Fed feel it was necessary to cut rates three straight times in a row?  
In September the Fed began providing billions of dollars to the repo market, the overnight and short-term borrowing market among financial institutions, banks and hedge funds, which found itself in a “liquidity event.”  
The Federal Reserve has tried to soft-pedal it, but in October it launched a massive new money printing program….
They don’t do this because they think everything is just fine.    
Nor was QE money printing a policy option created for times when everything is alright, either.
There is more to all this than meets the eye.  Extreme measures are being taken.  Extreme measures imply extreme conditions.  The Fed is acting like something big is brewing.  

BEWARE THE MOTHER OF ALL BUBBLES!
November 12, 2019

A look back at 11/12/19: We remember the money Americans lost in the popping of the dot com bubble, and the millions who lost their homes in the middle of the mortgage bubble.  So in November we wrote about the pain of the popping of the latest bubble.  Right now, during the lockdown phase of the Coved-19 pandemic, few are looking ahead at the pain this bubble will mean…

Market bubbles don’t just happen.  They are the result of the government or its financial arm artificially creating excesses money and credit conditions.  Fractional reserve banking, policies like Quantitative Easing, outright money printing, and interest rate manipulations are the tools they use to create these excesses, sending misleading signals to investors and businesses alike.
The pain of bubbles popping – the unemployment, the impoverishment of millions, the bankruptcies, the loss of families’ hard-earned financial security, even the loss of freedom and the ruin of entire countries – seem like they should be reason enough for bubble policies to be avoided in favor of sound, gold based monetary systems.  But the inevitable suffering of the people is never enough to stop the bubble-blowers.  

BUY GOLD SAFELY:  FACE TO FACE!
November 24, 2019

A look back at 11/24/19:  We must have been looking down the road when we wrote this piece.  But it’s only because we’ve seen it before… Other dealers and our competitors that can’t deliver precious metals and ask their clients to pay and wait for their gold and silver… eventually.

Don’t do that!  Republic Monetary Exchange makes immediate deliver!

We believe everyone should own gold and silver.    But we encourage people to use best practices in both buying and selling precious metals.
Said differently, we encourage people to use common sense.
We just don’t think it’s a good idea to buy gold and silver from boiler room operators or to send your money somewhere across the country to a voice on the phone.   At a place you know nothing about.
And then wait for weeks to get your gold.
You should be able to buy with confidence.  Face-to-face.  Getting your gold and silver right then for most of the commonly traded products.  On the spot upon receipt of good funds.  That’s how we do business.  Best practices.

WHAT IS THE FED SO AFRAID OF?
December 15, 2019

A look back at 12/15/19:   Of course, Federal Reserve officials knew more than we did about the extent of liquidity problems caused by their manipulations when we wrote about it in mid-December.  But we spotted their desperation and knew something was up…

The Federal Reserve is panicking.  Or at least it is acting like it, with moves of seeming desperation that are not clearly explained.
The Fed is quietly printing money like crazy.  But it isn’t saying what it is so afraid of.
For anyone steeped in the unhinged Keynesian theories that rule at the central bank, three interest rate cuts in 2019 are not internally logical.   The US economy is enjoying the longest sustained boom in history, now running 126 months.  And unemployment is said to be at a 50-year low.
Keynesian theory calls for lowering rates, deficit spending, and loose money when the economy is in contraction.  Not in an expansion.  
And now the Fed has cranked its money creation machines to eleven.  As the rock music parody motion picture Spinal Tap showed, eleven is even faster than the top rate of ten!
And indeed, the new money printing regime is faster than Quantitative Easing, the unprecedented monetary experiment that gushed forth almost $4 trillion beginning in the Great Recession.
Liquidity operations, more repo funding, more QE.  We refer to them generically:  more money printing.
What is going on in the Marriner Eccles Building in Washington?  Why has the Fed cranked the presses up faster than fast?
Although it’s all shrouded in mystery, we can suggest some possibilities.
Informed sources say the Fed is desperately trying to stop interest rates from flaring up… and spreading like wildfire.  

STANDING IN LINE TO BUY GOLD
January 22, 2020

A look back at 1/22/20:  No amount of standing in line has been able to help people trying to get gold from many of our competitors… They just don’t have the goods.  At Republic Monetary Exchange, we have inventory and continue to deliver for our clients…

It has happened before.   And it will happen again.  
We didn’t expect it to happen now.  But it did, in Germany earlier this month.
We’ve seen it before.  People standing in lines that snake around the block, that is, waiting for their turn to buy gold.  Hoping that they’ll get their turn before it’s too late.

THE CORONAVIRUS, BLACK PLAGUE, AND BLACK SWANS
January 28, 2020

A look back at 1/28/2020:  We left it to others to comment about the long-term outlook for the coronavirus, but we are well-situated to comment on the outlook for gold….

For now, we only wish to point out that the coronavirus outbreak is a classic “Black Swan” event. A Black Swan is an unexpected event that has an outsized impact. 
 9/11 was a Black Swan event.
Black Swan events are almost always destructive to the established order.  That would be things like government finances, trade, state currencies, and stock markets.  
They are almost always bullish for gold.

PANDEMIC – STOCKS, GOLD, AND CENTRAL BANKS
February 4, 2020

A look back at 2/4/20:  As the pandemic continued to unfold in early February, the stock market sell-off had only just begun. We wrote that there is no way out for the Fed.  There is no way out for the US economy as a whole, or for the monetary system.  There is only the opportunity for people to protect themselves individually…

If the Coronavirus has the deadly punch that many fear, its financial impact on the stock markets will be devastating and gold will rocket higher.  If Coronavirus proves to be less than a pandemic-level catastrophe, the central banks’ additional money printing will send gold higher as well.
The central banks are in a box of their own creation.  
The risk to stocks is extraordinarily high.  Gold is the only safe haven.  

CHARTS AND THE STAMPEDE TO GOLD
March 11, 2020

A look back at 3/11/20:  The Fed doesn’t know what to do other than try to force interest rates lower and “stimulate” the economy by printing money.  In March we provided a graphic representation of mirror image between the Fed’s artificially low interest rates and higher gold prices.  

Now the Fed has forced interest rates to never-before-seen lows, with the 10-year yield has actually dipped below .5 percent. Plunging rates in 2020 on the right side of the chart are impossible to miss.  They foretell higher gold prices. 
We would not like to have the job of persuading US Treasury bond buyers and auction bidders that loaning money to Uncle Sam for 10 years at for a paltry one-half a percent annual return is a good deal.  Especially since it is clear that the Washington big spenders are going to have to borrow an additional trillion dollars or more each year for the foreseeable future.  
A guaranteed loss is assured since it is the policy of the Federal Reserve to erode the purchasing power of the dollar at four times that rate each year. 

●    ●     ●

So there is a review of some of our market calls, advice, warnings, and recommendations from the last 12 months.  You will be well-informed by a review of these articles.  But remember, it is not enough to know.  One must act.

Bookmark our website.  Read our alerts.  We even encourage you to share these posts on Facebook and Twitter.

Then, when you’re ready to act, call or stop by Republic Monetary Exchange.  

But don’t wait until it’s too late!

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Record Demand for American Eagles

To protect their wealth, many Americans are reacting to unsettling conditions in prudent and time-tested ways.

They are trying to protect their wealth with precious metals.  

The US Mint reports record-shattering gold and silver coin sales for the month of March!

According to the latest numbers from Coin News, the Mint sold 142,000 ounces of American Eagle gold coins in March.  That’s up from 7,000 ounces the prior month.  It represents an increase of 1,135 percent over March 2019.

The silver sales reflect an even greater demand.  American Eagle silver coins sales totaled 4,832,500 ounces in March.  That’s up from 650,000 ounces in February.  It is an increase of 469 percent versus last March.

Coin News points to silver supply shortages from the US Mint in February and March.  “Silver Eagle sales in February 2019 were stunted when the coins temporarily sold out. However, the coins also temporarily sold out earlier this month (March) and were subsequently rationed.)”

Even with the blistering pace of US Mint sales, many dealers around the country are not able to make timely deliveries to their clients.

However, unlike others, Republic Monetary Exchange still has inventory and provides its clients with immediate delivery of gold and silver.  

Avoid the needless risk of placing and paying for orders elsewhere with dealers that are asking for advance payment and then promising delivery at some uncertain date in the future.  

Republic Monetary Exchange subscribes to best practices and can meet your gold and silver needs today, providing immediate delivery.  

Protect your wealth in these times of economic upheaval.  Republic Monetary Exchange Can Help. Contact us today!

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RME Has Gold and Silver

Others Have Long Delays… Can’t Deliver Metals Now!

Republic Monetary Exchange has gold and silver available now, even in these turbulent times, for immediate delivery.

Buy gold and silver today from Republic Monetary Exchange, and take delivery today!

WARNING:  Our competitors are out of inventory.  Some are promising to deliver gold and silver to their clients at some unknown, unspecified date far off in the future.  

WARNING:  If you pay them now, they say, they will try to get you gold and silver in six or eight weeks or some other time down the road and deliver it to you then.

WARNING:  We strongly advise you against doing that.  Especially in these volatile times.  And especially when Republic Monetary Exchange has inventory on hand for immediate delivery!

Because of the extreme demand for precious metals in these uncertain times, the prices for real gold and silver have decoupled from the price of gold substitutes and paper benchmark prices.  The world gold prices and index prices you read about in the newspaper are not the real price for physical gold you can take home and put in your safe.  There is not enough gold at those benchmark prices.

Most dealers are unable to make prompt delivery to their customers at any price.  

But Republic Monetary Exchange has gold and silver.  Today!  For immediate delivery!  Right here in Phoenix!  

But you must hurry.   We don’t know how long we will be able to meet the extreme demand.  

It is strictly first-come, first-serve!

Buy TODAY, take delivery TODAY!  

Call your Republic Monetary Exchange gold and silver professional today.  Lock in your order and take delivery now, not “sometime later”.

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Gold Briefs and Essential News

Goldman Sachs – “Time to buy the Currency of Last Resort”

Goldman Sachs gets it.  “We have long argued that gold is the currency of last resort, acting as a hedge against currency debasement when policymakers act to accommodate shocks such as the one being experienced now,” said the investment banking giant this week.

The company cited the 2008 precedent when the Federal Reserve announced its Quantitative Easing liquidity operations.  Over the next three years, gold surged to all-time highs.  

Similarly, in the current pandemic environment, the Fed has announced that it will use “its full range of tools” in liquidity operations.

Money Printers Gone Wild!  A Trillion Here, a Trillion There!

The coronavirus and bailout package in Washington could amount to more than a quarter of America’s Gross Domestic Product.   

Altogether the package could total $6 trillion!  

At the White House coronavirus task force briefing on Tuesday, Larry Kudlow, the President’s economic advisor, said measures would include $4 trillion in lending power for the Federal Reserve as well as the $2 trillion aid package.

“This package will be the single largest main street assistance program in the history of the United States,” Kudlow said.

US Output Drops at Fastest Rate in a Decade

The Purchasing Managers Index reports on the expected contraction of the US economy.  It’s business output index shows a sharp decline in March, following a decline in February.

“The service sector signaled an especially steep downturn in business activity, while manufacturers registered the sharpest drop in output since August 2009.

“Companies also reported the first contraction of new business since data collection began. The marked decrease in new orders stemmed from sharp falls in client demand following the outbreak of COVID-19, according to panel members.”

Republic Monetary Exchange Continues to Meet Client Needs!

While many – if not most – of our competitors across the country have found themselves unable to meet the needs of clients anxious to acquire gold and silver, Republic Monetary Exchange continues to provide its customers with the popular gold and silver products they seek.

Many of our competitors are out of gold and silver.  Either sold out, or without the inventory, market connections, and experience we have.  In any case, they are not able to deliver gold and silver.

Many dealers ask to be paid today for gold and silver that may be delivered at some indeterminate time in the future.  We recommend strongly against that.

We urge you to contact Republic Monetary Exchange today.  Speak with one of our precious metals experts and prepare now for conditions to come.  

Do not wait for more Washington red ink and trillions in printing press money to drive gold and silver prices to new highs.  Contact us today!

ONE ADDITIONAL NOTE:  We know that events have squeezed many people’s personal finances and that some may need to sell gold and silver.  Perhaps you’ve heard our advertising over the years, that in addition to offering the best prices to buyers of precious metals, because we operate a continuous two-way market, buying and selling, we are able to pay the most for gold and silver when you wish to sell.  

Let us help you, even if you didn’t buy your gold and silver from us.

Beware the Hyper-Inflating Fed

Don’t Get Quarantined in Dollars!

You do not want to risk being locked down in an incurable paper money economy.  One with no escape.  You need to be aware of just how grim the prognosis is for the Fed’s dollar.  

So today we share an observation from Tom Dyson, who writes a newsletter called Postcards from the Fringe.  Dyson is himself a veteran of the “repo” desk at Citigroup.

“The Federal Reserve’s balance sheet is about to EXPLODE higher,” he notes.  

Here’s why:

Dyson believes that between existing spending and the trillion-dollar deficit it is already running, a parade of stimulus schemers, and plunging tax revenue from a stalled economy, the Treasury is going to have to borrow another $10 trillion on top of the $23.5 trillion it already owes.  

But stand back and ask who is going to fund that debt?  Who is going to buy trillions of more treasury bonds?

Not China, says Dyson.  He’s correct.  China is up to its eyeballs in its own problems and not just the Coronavirus.  It’s a debt problem, staggering, to begin with, it grows with the health crisis and the slowdown.

Not the oil-exporting nations.  Not at these petroleum prices, for some below the cost of production.

Not emerging markets says Dyson.  They are having to dump their treasuries to support their plummeting currencies.

And not Wall Street.  “Asset managers are dumping their Treasury holdings to meet redemption requests and margin calls,” he writes.

So who does that leave?  It will be left to the Fed to “monetize the debt.”  That means magically turn the debt into money.  It must print money to buy US government bonds.  The Fed is not even making a secret of its willingness to print money until the cows come home.

“And that’s why the Fed’s balance sheet has started to hyperinflate,” says Dyson.  “It’s at $4.5 trillion now. If I’m right about the hole the government finds itself in right now, the Fed’s balance sheet will pass $10 trillion later this year… and then pass $20 trillion or $30 trillion in the next few years.”

If you don’t own gold and silver, then face it: your portfolio is quarantined in dollars.

And that is not a good place to be. 

Especially now!

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Stop Searching! RME has Gold and Silver In Stock TODAY

Others Sold Out!   Long Delays!  

Not Republic Monetary Exchange!  

Silver Eagles and other products are available For Immediate Delivery!  Buy Today… Take Delivery Today

Empty store shelves.  Staples of life missing from stores.  A stock market collapse.  Quarantines.  And the hunt for toilet paper seems to have suddenly become a leading topic in American life!

You are right if you feel an urgency to own gold and silver!

The events of the last few weeks have crystallized the importance of owning gold and silver.   Under the circumstances, people realize that means owning physical gold and silver.  Precious metals in their possession.  Gold and silver bullion and coins that they can get their hands on for-profit and for safety in times of trouble.

Many of our competitors are out of gold and silver.  Either sold out, or without the inventory, market connections, and experience we have.  In any case, they are not able to deliver gold and silver.

Some say pay them now, but it will be weeks before they can come up with your gold.  

That is a bad idea!  Do not do that!

Buy TODAY, take delivery TODAY at Republic Monetary Exchange!  Paper promises about gold or representations that someone somewhere has gold or gold shares or gold futures in your name that may or may not be delivered sometime in the future are no more comforting than someone somewhere else claiming to be holding toilet paper on your behalf in New York or Beijing when you need it now!

We are Republic Monetary Exchange. We’ve been around a long time, both buying and selling precious metals.  We have inventory for immediate delivery.  Now!  

And while we think everyone needs to own gold and silver, if you need to sell precious metals, remember because of our volumes and active market, we pay the most when you need to sell. 

Call us or stop by today to add more silver or gold while supplies last and premiums rise again.

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News and Views About the Markets and Economy

We know that even if you are unable to go to work, practicing social distancing, or even quarantined, that you still can’t read everything.  So here is a sampling for you of observations and insights from people we turn to from time to time.

Bretton Woods Research writes that we are only in the third inning of this process of Federal Reserve actions, falling oil, shutdowns, and adjustments.  It foresees a lot more downside for the stock market: “Depending on the length of the shutdown, it’s possible to see a downside scenario where the S&P 500 reaches 1750 almost 50% below the 2020 peak.”

That’s almost another 30 percent lower than we are today.

Veteran gold and silver analyst Jim Sinclair’s associate Bill Holter doesn’t pull any punches.  He says global bankruptcy will result from the world’s most over-leveraged shutting down for a month or more.  

“It is over folks,” says Holter.  “The system is coming apart at the seams and the ‘promises’ the world ran so smoothly on for so long are being laid bare. You might ask, which promises? The answer is ALL promises.

Holter points out that precious metals prices on the exchanges are for paper representations of the metals and are quite different from the actual prices for real gold and silver that you can hold in your hands.  “In the metals arena, you see paper pricing extremely weak. However, the real world shows something very different. The US Mint is out of both gold and silver eagles. Other sovereign mints are also running out of supply or already out.”

Conditions have been changing fast.   Be sure to check in with your Republic Monetary Exchange gold professional for current conditions and product availability.

David Stockman is keeping an eye on the growing roll of bailout-ees:  “They are talking about Bailouts for Everybody—airlines, shale producers, Boeing, corporate America, the banks, hotels, restaurants, cruise lines, casinos, small business, medium business, every business and some or all of the households of America in the form of helicopter money from Washington.”

We ask you to bear in mind that when Washington and the Fed bailout everybody when they pass out $1,000 check to everybody, everybody pays.  They really bail out nobody, because the burden is borne by the recipients.  By everybody.  The cost is hidden in the falling purchasing power of the paper money.

And that is extremely bullish for gold.

Even more unhinged, and more bullish for gold is the belief that we – Washington, the Fed, the US taxpayers – can bail out everybody.  Even so, the Fed announced its decision on Thursday (3/9) to make dollar loans to a slew of foreign central banks for the next six months.

ZeroHedge:

“How much dollars will be available? As per the release, the Fed will release up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank and $30 billion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank of New Zealand.”

We will end today’s discussion by looping back around to our own comments recently about the Plunge Protection Team, here.  Yesterday (3/18), White House economic advisor Larry Kudlow floated the idea of a sovereign wealth fund, that the Federal Reserve print money to buy stock.  Kudlow war purportedly limiting the idea to companies the seek government aid in the COVID-19 episode.  

But that kind of limitation will fall quickly.  We’ve seen these kinds of things before and we’ve seen this particular idea coming.  It is a reflection of the unmatched influence of the government’s Wall Street cronies.  Taken to its logical extreme, they basically want to empower the Fed to buy stocks and guarantee their stock market profits.  This proposal is advancing quietly, but quickly.  

As we said, “If it is allowed to do this, say goodbye to American prosperity.  Cronyism and influence peddling will run rampant in a carnival of corruption as state bureaucrats and officials decide which stocks to buy and at what prices.  As money flows to the influential and the well-connected, honest pricing, innovation and free-market competition will grind to a halt, product inferiority will rule the day and the living standard of the American people will fall hard.

“It will be Mussolini time in America.  

“Buy gold.  And if the government starts buying stocks, buy more gold.”

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Now What?

It could have been one of many other things, but the Coronavirus is the pin that popped the stock market bubble.  

Now the Federal Reserve has started another aggressive round of Quantitative Easing.  It does so under the general behavioral rule that when you’re holding a hammer, everything looks like a nail. 

Printing money is the Fed’s hammer.  It uses that tool for every crisis.  In the original QE program, the Fed created almost $4 trillion dollars.  In response, gold marched higher over the next three years, from just above $700 an ounce in 2008 to its all-time high of $1900 in 2011. 

Having already launched its new money printing binge last fall, before the Coronavirus, the Fed is now stomping on the accelerator.  As the red arrow points out, the Fed’s balance sheet, having leveled off somewhat at the end of last year, turned virtually straight up at the end of February.  And it will climb much higher from here.  Indeed, it is already on track for a new all-time high, past $4.5 trillion and headed quickly to $5 trillion.

What does that mean?  It means a heck of a lot of new money printing.  And that’s early in the crisis.  New inflation-funded spending initiatives are coming faster than anyone can track.

But the stock market sell-off and the business shutdowns in place and to come are so devastating, that nothing that could be considered “normal,” even on the scale of the prior liquidity easing will be effective.  

JP Morgan

Doug Noland of Credit Bubble Bulletin puts it this way:  

“I do doubt fiscal and monetary stimulus will resuscitate the Bubble in global leveraged speculation. Illiquidity and market dysfunction have been exposed. Huge losses have been suffered and ‘money’ will flee popular (and overcrowded) leveraged strategies (i.e. risk parity). I also suspect confidence in derivatives has also likely been shaken. Liquidity risk will be a persistent feature of global markets.” 

Warren Buffett described times like these in a more folksy way:  “When the tide goes out you see who’s been swimming naked.”

Make no mistake.  The tide has gone out.

Now we must hold our breath while we watch to see the financial trouble that will be exposed, in banks, funds, brokers, companies, pension plans, insurance companies, and investment products like annuities.  The criminal recklessness on display will extend to all levels of government.  

This is not an age of fiscal prudence or honest stewardship.  The politicians and government have established the standards of our age, with its fraudulent representations.  It taught generations of Americans that they, like the government itself, could spend their way to prosperity.  It taught that it could make up money out of thin air, that deficit doesn’t matter, that debt doesn’t matter either because we somehow owe it to ourselves.  They taught the people that they can all live at someone else’s expense.  And they even taught that honest accounting doesn’t matter and that something as routine and sensible as an audit was beneath the dignity of the world’s largest money manipulator, the Federal Reserve System.

Now all these lessons have to be unlearned.  After so many years of delusion, there is pain involved in confronting reality.  But reality always asserts itself in the end.

Now is the time to buy gold.  That is because gold is the only financial/monetary asset that is not someone else’s liability.  It is not a hopelessly indebted company or government.  It is not dependent on someone else’s honesty, prudence, or accounting practices.  It is not dependent on the pictures engraved on it, or on the country that minted it.  It is not a promise of performance that may or may not be met in the future.  

As J.P. Morgan said in congressional testimony over a hundred years ago, “Gold is money.  Everything else is credit”

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Global gold prices

The Gold Price During the Stock Market Blood Bath

A Look at the Price of Gold During the Stock Market Selloff

In February we described a familiar market pattern in a stock market collapse.  Stock investors forced to come up with cash to meet margin calls or to cover other losses often turn to gold as a source for their liquidity needs.

In Blood Running on Wall Street!, we wrote:

“Traders in markets with perfectly sound economic fundamentals can sometimes liquidate their positions in other things to meet margin calls in collapsing markets.  It appears that in the general carnage of the stock market, large investors scrambling for cash to meet margin calls took profits in gold, the most liquid commodity of all.

“To repeat, we have seen this kind of action before, and we know what happened then.  Gold fell hard – but only briefly – in the fall of 2008 during the stock market carnage of the mortgage meltdown. 

gold bars bullion

“But that margin call selling opened a window of opportunity to buy gold at ‘sale prices.’  

“Of course, it didn’t last long.  Soon gold was racing to new all-time highs.  Three years later it was up well over 2 ½ times its October 2008 low.”  

Now. as the stock sell-off deepened, the pattern repeated itself last week.

On Thursday (3/12) an Investing.com story headline read, “Gold Loses $1,600 Support as Investors Sell to Save Bleeding Wall Street.”

“Gold lost its key $1,600 support on Thursday as investors cashed out their long positions in the yellow metal in a scramble to cover margins and losses on Wall Street amid the U.S.”

Bloomberg News wrote that gold selling showed, “how extreme the selling pressure has been in every corner of the markets.

The Investing.com story goes on to quote as an analyst who says, “Gold investors are scratching their heads as the fear trade is only seeing steady flows into Treasuries right now.”

We think moving into US Treasuries is an extremely bad move.  When the yield on the 10-year US treasury bond dipped to .5 percent last week we wrote that we think loaning money to the government is to guarantee to lose purchasing power.  That is because the Federal Reserve’s stated policy is to erode the purchasing power of the dollar at four times that rate.

Gold Bars

We strongly advise against seeking safety in the bond market.  Bear in mind that if interest rates rise in reaction to events, the result is a fall in bond prices.  Furthermore, since the correction in gold prices is widely agreed to be a result of margin call selling by those suffering losses in stocks, we view the lower price as almost certainly temporary and therefore an attractive buying opportunity.

One final note:  The COVID-19 crisis has produced almost universal calls for the Fed and the government to spend money and defer or reduce taxes.  The Fed and the administration are complying with both monetary and fiscal policies.  This is a certain sign that policymakers here and abroad will be flooding the US and the global economy with new liquidity.  An enormous amount of liquidity.  

Money pumping.  Liquidity Operations.  Open Market Committee interventions.  Quantitative Easing.  We prefer to call it “money printing.”  It is the artificial expansion of money and credit by the central bank.  Juicing the markets.  By any name, it will devalue the purchasing power of the dollar and other currencies.  

And it will drive gold higher.  That’s why we renew our call for our friends and clients to take advantage of today’s lower gold prices…

While you can.

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Charts and the Stampede to Gold

We’d like to step back from the daily reports of the wild swings and mounting losses in the stock market to let you ponder a couple of longer-term, big picture items.  We think the two charts that follow are mostly self-explanatory, so we will just tell you what they represent and otherwise keep out commentary to a minimum.

The first chart plots the relentless rise in the US federal debt (in red), now at $23.5 trillion dollars.  Because the value of the dollar is subject to the debt as is the Federal Reserve’s willingness to create more dollars to keep the debt game going, you can see that for years the rising debt pulls dollar gold prices higher. 

By the way, with businesses slowing down due to the Covid-19 pandemic, tax revenue will fall.  It will fall further still if a payroll tax cut is implemented.

At the same time, government spending will rise at a relentless rate with new spending on health-related measures.  

That means the red line will turn steeply higher.   And pull the gold line along with it.

The next chart shows the US Treasury 10-year bond rate back to 2015 (the blue line) compared to the gold price over the same period.  Their mirror image movement is impossible to miss.  Over the period, as interest rates have ticked up, gold has paused or moved lower; as interest rates have fallen, gold has moved higher.  

Plunging Rates

Now the Fed has forced interest rates to never-before-seen lows, with the 10-year yield actually dipping below 5 percent.  Plunging rates in 2020 on the right side of the chart are impossible to miss.  They foretell higher gold prices.

We would not like to have the job of persuading US Treasury bond buyers and auction bidders that loaning money to Uncle Sam for 10 years at for a paltry one-half a percent annual return is a good deal.  Especially since it is clear that the Washington big spenders are going to have to borrow an additional trillion dollars or more each year for the foreseeable future.  

A guaranteed loss is assured since it is the policy of the Federal Reserve to erode the purchasing power of the dollar at four times that rate each year. 

It can sometimes take a while for critical masses of the people to wake up, but at some point, the guaranteed loss of purchasing power will become apparent to everybody and cause a stampede into gold and silver.

Why not beat the rush?  Contact your Republic Monetary Exchange gold professional today.

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The Plunge Protection Team

After long years in Washington, the presidential candidate didn’t seem to know what it was.  Senator John McCain was caught up short when Ron Paul asked him in the 2008 Republican debates what his position would be on the President’s Working Group on Financial Markets.  

It’s doubtful most people of Capitol Hill, much less the American people, know any more than McCain about what we call the Plunge Protection Team.

We call it that because this high-level panel of government officials and the Federal Reserve chairman was created by President Reagan after Black Monday, the October 1987 stock market crash.  That sell-off amounted to a 23 percent stock market free-fall as measured by the Dow Jones Industrial Average.

The explicit mission of the Plunge Protection Team was “enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation’s financial markets and maintaining investor confidence.”  

In other words, it was to protect the stock market from plunging. 

Of course, the only resources the government or the Fed has to buy stocks or options or index futures to try to blow up the stock market bubble are resources it takes from the American people.  Or it puts its regulatory apparatus to work to divert people’s economic activities into channels it believes best.

Think about that:  the wealth of the American people being put to work supporting the crony classes.  It’s actually even worse than that because it misleads the people about the true value of stocks.  It amounts to the government secretly going to work to pump the market up and persuade the people to buy our own stocks at levels unsustainable in a market free of the state’s fat thumb on the scales.  

So you will not be surprised to learn that in the current stock market blood bath, the Plunge Protection Team was assembled by phone.

On Monday (3/9) the Dow 30 stock index fell 2,014 points, a one-day total of 7.8 percent.  The S&P500 fell 7.6 percent.  In the aftermath of the selling panic, according to a report by Zero Hedge, the Plunge Protection Team joined a telephone conference called by Treasury Secretary Steven Mnuchin.

The following day, Tuesday, the Dow reclaimed 1,167 points, or 4.88%, while the S&P 500 gained 4.94 percent. It is impossible to know whether this is the result of government market intervention.  But a one-day intervention wasn’t enough to halt the hemorrhaging in stocks which continued on Wednesday.

Here is a lesson to be remembered in these times.  The government is like a blowhard huckster.  It is always trying to blow bubbles, to inflate markets and conditions.  It will use all the powers at its disposal to do so.  You have seen it push and pull on policy levers to inflate its earlier bubble in the dot com market and in housing.  The market always seeks to deflate away those excesses, even if it has to wait for something unexpected like the coronavirus to pop the government’s bubble.

We advise you once again to stay away from markets that are only sustained by gimmicky monetary policy.  

One other thing.  Already there is movement in Wall Street circles for the government or the Federal Reserve to step in and begin buying stocks to stop the sell-off and prop up the market.  This is the endgame of a syndrome that we have written about repeatedly:  that the Federal Reserve has become the towel boy of Wall Street, and believes it has the mandate to keep stock prices at a permanently high plateau.  

If it is allowed to do this, say goodbye to American prosperity.  Cronyism and influence peddling will run rampant in a carnival of corruption as state bureaucrats and officials decide which stocks to buy and at what prices.  As money flows to the influential and the well-connected, honest pricing, innovation, and free-market competition will grind to a halt, product inferiority will rule the day and the living standard of the American people will fall hard.

It will be Mussolini time in America.  

Buy gold.  And if the government starts buying stocks, buy more gold.

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Silver Eagles Spike; Gold is Headed Higher

The Unexpected

We expect gold to move much higher this year.

We expect it because we keep an eye on Washington.    

But you need to think about the unexpected, too.  

Monty Python, the comedy troupe had a routine about the fact that “nobody expects the Spanish Inquisition.”  We don’t expect it either.

But more realistically, nobody expected the coronavirus.  Nobody much expects most natural disasters. But they happen.  So do wars and revolutions, mostly unexpected.

So we urge you to prepare for the unexpected with gold and silver.  

Federal debt and money printing?  We know where that’s headed.  But we’re here to help you prepare for the unexpected, too.  Things like coronavirus and natural disasters.  Things that the last couple of weeks have demonstrated can rock a top-heavy stock market or threaten an entire economy.

The Spiking Sales of U.S. Mint Silver Eagles

The arrival of the unexpected may be responsible for spiking sales of US Mint Silver Eagles.  The move in recent days has been dramatic.  

In February the mint reported sales of 650,00 of the one-ounce silver coins for the entire month.  But it sold 750,000 in just the first five days of March!  

The surging sales is another sign of the developing gold and silver bull market and a growing public awareness of financial challenges on the horizon.  Be sure to speak with your Republic Monetary Exchange precious metals advisor about silver and the advantage of owning US silver Eagles.

At the same time ask to find out more about trading the gold/silver ratio, a powerful strategy to increase your precious metals portfolio.

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Gold Headed Higher

Gold is headed to an all-time high in dollar terms.  

So says Jeffrey Gundlach, CEO of Double Line Capital.  Gundlach, known as “the bond king,” told CNBC viewers on Thursday, (3/5) that gold is the thing to own.  “I turned bullish on gold in the summer of 2018,” he said.  The dollar getting weaker appears to be almost a policy of the Fed as it “panics” and slashes rates, he said.  

“The Fed slashing rates is clearly going to be dollar negative.  And that means gold is going to go higher.

“Gold is doing super well, even with the dollar unchanged,” he pointed out, raising the question of just how high gold will go as lower interest rates take their toll on the dollar.  

“Gold is at a record high in terms of the Euro and many other currencies.  And I feel it is almost a certainty that gold is going to tog to an all-time high versus the dollar as well.”

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Market Mayhem: A Close Look at the Fed Policy Responsible For It!

The Fed cut interest rates.  Stocks fell.  Gold climbed.

In an unscheduled emergency meeting Tuesday, the nation’s central bank cut the benchmark federal funds rate by a half-point to a range of 1%-1.25%.  It cut the discount rate as well.

It made the moves in response to COVID-19, the Coronavirus.  

Stocks fell.  The Dow lost almost 800 points.

Gold rocketed $43 higher.

It makes perfect sense.  In the last two weeks, the Dow has plunged below both its long-term and short-term moving averages, both of which have rolled over and turned down (the blue and red lines respectively on the following charts).

Gold, on the other hand, is above both trend lines.  Both trend lines are moving up.  And even in the face of margin-call selling of gold by stock traders that we wrote about last Friday was not enough to break support at the short-term trend line.  (“Traders in markets with perfectly sound economic fundamentals can sometimes liquidate their positions in other things to meet margin calls in collapsing markets.  It appears that in the general carnage of the stock market, large investors scrambling for cash to meet margin calls took profits in gold, the most liquid commodity of all.”  From our 2/29 commentary “What the Historic Wall Street Tumble Means for Precious Metals”)

We believe that Fed policy will mean still lower stock prices.  And much higher gold.  In this commentary, we would like to share with you why this is so.  

We might as well start with the C-virus.  People everywhere are wondering about the coronavirus and asking the same thing:  How bad will it get?

We wonder as well, but since there is little we can do about the public health impact, we confine most of our thoughts to the financial impact it will have.  

As far as that goes, the handwriting is already on the wall.  Wherever the medical calamity ends up on a scale of 1 to 10, from mild to unrestrained tragedy, the markets have made clear that the stocks cannot weather the storm, while gold continues to provide shelter like nothing else.

There are people in high places watching just as intently as we are, and though they have no more medical skills to bring to bear on the crisis than do we, they have intervened with more interest rate manipulation, nonetheless.

“The U.S. economy remains strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments…” So said Fed chairman Jay Powell.   That was before the Tuesday rate cut.

The Fed is always “monitoring the situation.” It is always “keeping a close watch on conditions.”  

For all that monitoring and watching, what can it actually do about what it sees?  Let’s take it from the beginning.

Prosperity is the result of production.  Cars, food, consumer goods, energy, clothes, entertainment, personal and professional services.  Wealth is the increase in these things.  Does the Fed produce any of these things?

No.  It can only print more money and credit.  And the creation of money and credit is not the creation of actual wealth.  

In fact, the Fed’s creation of more money and credit – by pouring money into the repo markets, or printing money to drive rates down – can temporarily inflate financial markets, but ultimately only lessens the value of the money you already have.

Seriously, if the Fed can plan and create economic outcomes, why exactly have we had the worst economic dislocations in the country’s history under its regime?  The Great Depression.   The Great Recession.  A housing bust that saw millions lose their homes.  The destruction of the dollar’s purchasing power.  Weak economic growth.  $23 trillion dollars in federal debt.  As much as ten times that hidden debt.  A stalled-out middle class.  A widening wealth gap. 

Is it possible that the Fed planned and created these outcomes intentionally?  Or is it more likely that the Fed created these consequences by failing to understand the fundamentals of markets and prices, of production and consumption?  Created them with a fantasy-land misunderstanding of its own ability to affect the interactions of hundreds of millions of producers far-flung across the country and around the world with its constant interventions, meddling in rates, bailing out reckless banks, and destroying the price discovery function of markets?

Columnist and best-selling author John Tammy points out that Fed stimulus is no different than another government spending “that shrinks the supply of resources that would otherwise be made available to private sector producers.  

“The Fed can only act insofar as the private sector creates resources that economic actors would seek in the marketplace, so ‘policy action’ by the Fed is by definition intervention on the part of non-market actors that pushes resources to where they wouldn’t otherwise go in a free economy helpfully free of government meddlers. Just as government spending happens to the detriment of private investment, production, and growth, so do Fed or central bank machinations take place at the expense of private, market-disciplined lending and investment, production, and growth. In short, the [Fed] intervention called for… will almost as a rule blunt any recovery from COVID-19.”

There is no question the coronavirus is suppressing economic activity.  But will you be more willing to go gambling in a palatial Singapore casino with the Fed’s lowering of the fed funds and discount rates?  More willing to fly to Korea or Italy?  Or even fly domestically?  Will Chinese suppliers of essential industrial parts and electronics in areas hard hit by the C-virus suddenly go back to work producing goods needed by foreign manufacturers now that the Fed has lowered rates?

“We do recognize a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain. We get that,” said Powell. “But we do believe that our action will provide a meaningful boost to the economy.”

It will certainly provide a boost to prices.  It shrinks the supply of resources in the productive economy, as Tammy describes.  At the same time, following David Stockman, we might point out that the breakdown of global supply chains means higher production costs “… via a lot more cost (for inventories, second suppliers, shorter supply lines etc.,) and a lot less profit.”

At the same time, monetary policy dilutes the value of every other dollar in existence.

Economist Robert Wenzel summed up Fed policy this way:  “Money supply growth has been extraordinarily strong in recent months and this Fed action will result in even stronger money growth—which will add to the upward pressure on prices that has been slowly developing.” 

So the Fed has driven stocks down.  And gold up.  

More of the same is in the offing.

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What the Historic Wall Street Tumble Means for Gold and Silver

Blood Running on Wall Street Creates Buying Opportunity for Precious Metals

You might not have been too worried last Monday when the Dow Jones Industrial Average fell 227 points.  But you certainly must have taken notice of the carnage on Tuesday when it fell 1031 points.  The collapse was confirmed for any doubters by midweek because on Wednesday the Dow plunged another 879 points.  And then came the worst day in the history of the Dow, Thursday, February 27, when the Dow fell 1190 points.  

Friday’s loss of another 357 points capped off the week, the worst stock market performance since the last fiscal crisis, the Mortgage Meltdown in 2008.  Altogether the Dow had a loss of 12 percent for the week; the S&P fell 11 percent.  

Look closely at this, one of the ugliest charts we’ve ever seen, as the Dow falls off the cliff:

For our part, we wrote last Monday that New York stock brokerages that were calling for a mere correction in response to the coronavirus were guilty of “gross understatements.”

Even more absurd was the comment of Jim Cramer on Wednesday (2/26) as he urged his viewers to get off the sidelines and into the stock market.  “If you haven’t put anything to work, I think you’re playing with fire,” said the CNBC “Mad Money” host.

Huh?  If you are on the sidelines, avoiding the danger entirely, you’re playing with fire?

In early October we warned about the spread of disease (Gold Coins for Black Swans) when we wrote about unpredictable events that make gold a crucial part of your portfolio:

“Those include everything from the sudden outbreak of war, widespread crop failures, and the spread of disease like the flu epidemic of a century ago, to uncontrollable civil turmoil, power grid failures, earthquakes, volcanic eruptions, and even less likely events like an asteroid impact.

“Unexpected?  Unlikely?  Precisely the qualities of the Black Swan events that order and reorder just about everything in our lives.”

Since then, the unlikely events that have actually occurred are the fires that devastated Australia, a plague of locusts in Africa, and bats in Australia.  Outbreaks of Swine Fever and bird flu.  All that and earthquakes, too.  

Yet the worst of these unexpected events appears to be the COVID-19 outbreak.

The stock market has been whistling past the graveyard about the coronavirus from the beginning of the news from China.  

Last week it could no longer avert its gaze.  The Wall Street Journal summarized the bad news with a headline:  “The Week that Wiped $3.6 Trillion Off the Stock Market.”

Gold was caught in the crossfire.  Although it surged close to $1,700 on Monday as the virus news spread, it fell hard on Friday amidst what could be called a low-grade panic on Wall Street, finishing at $1,566.  

We Have Seen this Kind of Action Before

Traders in markets with perfectly sound economic fundamentals can sometimes liquidate their positions in other things to meet margin calls in collapsing markets.  It appears that in the general carnage of the stock market, large investors scrambling for cash to meet margin calls took profits in gold, the most liquid commodity of all.

To repeat, we have seen this kind of action before, and we know what happened then.  Gold fell hard – but only briefly – in the fall of 2008 during the stock market carnage of the mortgage meltdown.   

But that margin call selling opened a window of opportunity to buy gold at “sale prices.”

Of course, it didn’t last long.  Soon gold was racing to new all-time highs.  Three years later it was up well over 2 ½ times its October 2008 low.  

We haven’t liked what we have learned so far about COVID-19.  As we have said repeatedly, we are not epidemiologists and don’t pretend to know what even the experts themselves don’t yet know either.  But having spent a lifetime learning about how money reacts in a crisis, so we urge you to avoid any further bloodletting in the stock market as this pandemic plays out.  Take advantage of the dip in gold and silver prices while you can.

As we wrote in October, “Owning physical gold and silver is the single most important thing you can do to protect yourself from low predictable events that carry outsize impacts.”

Take action now.  We could be witnessing the beginning of the 2020 economic crisis. Analysts have been saying for years that the next one would be way worse than 2008. It’s still not too late. Contact Republic Monetary Exchange today and diversify your portfolio with physical gold and silver.

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Gold in the Age of Bernie

We are compelled to take our attention off the spreading of the Coronavirus for this post, simply to remind you of the presidential race.  It’s become something of a bidding war as the Democratic candidates outbid one another for what the intend to give the American people –  guaranteed jobs, national rent control, and free housing, free health care, free college, free daycare, yada, yada, yada.  

Next Tuesday, March 3, is Super Tuesday, with Democratic primaries in 14 states.  More than a third of the Democratic National Convention delegates will be awarded on Super Tuesday.  

Right now Bernie Sanders is the odds-on favorite to snatch the Democratic nomination according to all the betting markets.  Real Clear Politics places Sanders’ average among the markets at 55 percent.  

Michael Bloomberg is way behind at 21 percent.

How is the rise of Bernie Sanders affecting the outlook for the markets?  Frankly, it’s not good for stocks.  It is very good for gold.  

Goldman Sachs, which had an earlier target for gold to reach $1600 later this year, has raised its forecast.  The firm now calls for gold to climb to $1700 over the next three months, and to $1750 in six months.

The investment bank identifies three factors in its projection:

1) Fear-driven investment demand based on the coronavirus;

2) Large global savings glut, while gold has a better outlook for appreciation than bonds in the next recession; 

3) The rise of Bernie Sanders, with a policy of large tax hikes that can slam stocks, and a proposed wealth tax that makes gold especially inviting for high net worth individuals.

Jeffrey Gundlach, the man known as “the Bond King, and the CEO of DoubleLine Capital, also views Sanders as a threat to the stock market.  In an email to CNBC on Wednesday (2/26) Gundlach wrote, “If this stock market reversal is due exclusively to the virus, then why is United Healthcare down far more than (the S&P 500)? Why is healthcare as a sector broadly not outperforming? Answer to these questions: The market is digesting a better than 50 percent chance of Bernie getting the nomination.”

Senator Sanders’ plan to overhaul the economy runs up to at least $50 trillion.   He says the Medicare For All part of his plan would cost $30 trillion over ten years, but this week was only able to offer the means to fund $17.5 trillion of it.  That $17.5 trillion is necessarily the result of new taxes, and Sanders is just getting started.  

It reminds of Margaret Thatcher’s pithy observation that the problem with socialism “is that pretty soon you run out of other people’s money.”  

Of Sanders boosting investment demand for gold, Goldman Sachs says his “proposed wealth tax could incentivize high net worth individuals to buy physical gold bars and store them in a vault, where it is more difficult for governments to reach them.”

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The Bat Virus Lesson: Buy Gold

A lot of things aren’t yet clear about COVID-19.  But one lesson is clear:  Buy gold to protect yourself in a crisis!

People around the world get the flu every year.  Some people die from it.   The important public health question is just how lethal any spreading strain is.  

We don’t know the answer about this coronavirus.    

Estimates in the press range from 0.04 percent mortality to 2 percent. 

The difference is a factor of 50.  It matters a lot.

Two percent of the US population is 6,540,000.  That is a wartime level of magnitude.  0.04 percent is 130,800.  That’s more than twice the number of Americans that died in the Vietnam war.

Fortunately, those numbers must be adjusted by the percent of people who would actually fall victim to the coronavirus.  It is estimated that about ten percent of the US population get the flu in any given year.  In a particularly bad strain, that may rise to 25 – 30 percent.  

We’ve taken the time to look at these numbers to show just how little is known about this disease.  The range of possible consequences is simply immense.

But we do know that in a crisis, the world turns to gold.

That was evident on Monday (2/25) when both South Korea and Italy raised the alarm about the spread of the virus in those countries.  So much for the hope it would be mostly “contained” to China.  The Dow Industrials fell more than a thousand points.  It was the worst day single day in two years for both the Dow and the S&P 500.  Gold raced toward the $1,7o0 mark.  On the spot (physical cash markets) gold hit a high Monday of $1,688, a seven year high, before settling back a little to close at $1,671. 

In reviewing what we have written about the coronavirus so far, we would like to repeat our advice: to use this outbreak as time to pivot to caution with stock and bond holdings.  In January we looked down the road and wrote that from what we could see, the coronavirus “looks very worrisome indeed.  It may be much bigger than anything the world has experienced since the Spanish flu epidemic that claimed hundreds of thousands of American lives just over 100 years ago.”  (The Coronavirus, Black Plagues, and Black Swans)

On February 9 (In a Crisis), we wrote, “Some of our readers will recall all the things that were shut down after 9/11, especially air travel.  Today’s epidemic has us wondering how long these grids can function if whole cities and workers are quarantined.  We may learn from China’s experience.  In any case, we wonder what would happen if the increasingly stressed national electricity grid went down, or if transportation were broadly encumbered.  

“What would you do if a power grid interruption meant ATM machines stop spitting out cash?  Or if emergency health measures mean that banks and other business can’t open for some time?

“Tragedies can provide us valuable reminders.  When the questions have to do with the monetary system, the answer is that in a crisis you would be very happy to own gold and silver, the world’s most liquid commodities. Precious metals have weathered the storms and saved fortunes and even lives for people throughout the ages and around the world.”

As we write in the middle of the trading day on Tuesday (2/25) everything on our screens is red.  That means down.  The Dow is off more than 900 points.  And gold has given back some of its Monday gains.  We are grateful for that, because it means a more favorable buying price (for now!) as this crisis continues to unfold.

The eventual impact of COVID-19 is unknown.  But the centrality of gold in a global crisis is very well known.

If you have not reduced your exposure to stock and bond markets and spoken to a Republic Monetary Exchange gold and silver specialist about protecting yourself and your family with gold, we urge you to do so at once.

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Gold Prices Roar Higher

Market Looks Ahead, Doesn’t Like What’s Coming Our Way!

Gold prices screamed to seven-year highs on Friday.  Early Monday morning, investors woke up to see the Dow Jones hammered down over 700 points while gold continued its rise, reaching as high as $1,687, up over $40 per ounce from its previous close. This is as of print. This gold bull market seems poised to continue its vigorous run.

No wonder.  Have you been watching the news?

A deadly virus from China.  A plague of locusts in Africa, and bats in Australia.  Outbreaks of Swine Fever and bird flu.  All that and earthquakes, too.

These may not be biblical events, but they are reminders to protect your family’s wealth from the unexpected.  

The Drudge Report headline Friday was short and to the point about the coronavirus:  OUTBREAK SHIFTS, SPREADS.  “This new virus represents a tremendous public health threat,” said a CDC official on a call with reporters Friday.  

We have been raising the alarm about the coronavirus since January when we identified it as a classic black swan event:  “an unexpected event with an outsize impact.”  (See The Coronavirus, Black Plague, and Black Swans.)

But the COVID-19 virus, bats, and locusts aren’t the only developments to be concerned with.  They aren’t the only things driving gold higher.  Remember that the new gold bull market got underway last summer, well before the plagues.  

The factors driving gold include the skyrocketing US debt, global de-dollarization, Fed policy, and US interest rates.

And don’t forget the top-heavy stock market.  At the same time we wrote last week that the stock market has the “jitters,” Goldman Sachs was telling its clients that a near-term correction “is looking much more probable.”  Oppenheimer agrees, telling its clients “the impact of the coronavirus on earnings may well be underestimated in current stock prices.”

We think those are gross understatements.

On the interest rate front, the yield on the 30-year US Treasury sank to an all-time low on Friday.

Would you loan money to the US government for 30 years for an annual return of only 1.89 percent?  That’s a negative real return if the Fed succeeds in its target of debauching the dollar by two percent a year.  We think that as the global de-dollarization movement continues, the Treasury will be forced to pay far more than today’s rates to borrow enough to fund its debt.  Those higher rates mean huge capital losses in the bond markets.  

It’s shaping up to be a bloodbath, the financial equivalent of a global plague.

For those who have not already done so, we recommend our friends and clients move to safety now.  The stock and bond markets have had a powerful run, but they are no place to be as a crisis deepens.  

No other financial safe haven can even compare with gold.  It is universally desired in good times and bad.

Visit with your Republic Monetary Exchange gold and silver professional for specific suggestions based on your portfolio.

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Bubbles Always Pop

We don’t know who first said that the stock market is a bubble in search of a pin, but it’s an image that is both vivid and true.

It would be easy to excuse missing the current stock market bubble, if we hadn’t already suffered the popping of the dot.com bubble and the housing bubble in just the last 20 years.  When the dot.com bubble burst the Nasdaq lost 80 percent of its value.  When the housing bubble found its pin, millions of Americans lost their homes.

The current stock market bubble is sustained by the following beliefs:

  • The coronavirus doesn’t matter.
  • An economic slowdown in unlikely.
  • Deficits don’t matter.
  • The national debt doesn’t matter.
  • The Federal can really control interest rates.

Yet any one of those things can be the pin the bubble is in search of.   

Indeed, there are more pins than those.  In a new article, the popular economist Nouriel Roubini identifies geopolitical pins among the others.  

He writes that the markets are “blissfully in denial of the many predictable global crises that could come to a head this year.”  

“For starters, the United States is locked in an escalating strategic rivalry with at least four implicitly aligned revisionist powers: China, Russia, Iran, and North Korea.”

“As of early 2020,” says Roubini, “this is where we stand: the US and Iran have already had a military confrontation that will likely soon escalate; China is in the grip of a viral outbreak that could become a global pandemic; cyberwarfare is ongoing; major holders of US Treasuries are pursuing diversification strategies; the Democratic presidential primary is exposing rifts in the opposition to Trump and already casting doubt on vote-counting processes; rivalries between the US and four revisionist powers are escalating.”

Another observer, Charles Hugh Smith, addresses the topic of bubbles on his Of Two Minds blog.  His post The Fed Has Created a Monster Bubble It Can No Longer Ignore is worth reading.  

We’ll share two important points Smith makes:

“History has never recorded a bubble which settled magically onto a ‘permanently high plateau’ and stayed there for months or years.  So the Fed has finally reached the point of no return: either it accepts a painful bursting of the monster moral-hazard bubble it has created or it lets the monster lead the stampede over the cliff to a financial collapse that the Fed can’t rescue with the usual tools of lowering interest rates and bailing out banks.”

And:

“The problem is that bubbles always pop, and they pop regardless of what central banks do. This is contrary to the popular opinion that if only the Fed had saved Lehman Brothers, the Global Financial Meltdown of 2008 would never have happened.”

If you’d like a little more detail about the Fed’s role in creating bubbles, see our post Do You Really Think This Can End Well?  In it we wrote, “What we are saying is simply this:  The stock market is a bubble of enormous proportions.  The Fed will try to keep it inflated, but eventually it will fail.  Eventually rates will rise.”

“And as always, the bigger the bubble, the bigger the bust.

“That’s just one reason why you should own gold.”

Contact Republic Monetary Exchange today to learn how to protect yourself and your wealth before the bubble finds its pin.

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End the Fed and Avoid Economic Disaster!

Today’s comments come from former Congressman and presidential candidate Ron Paul.

“The only way to avoid economic disaster,” says Dr. Paul, “is to cut spending and audit, then end, the Federal Reserve.”

Dr. Paul is a well-known gold authority with a great track record for predicting the calamities that result from economic irresponsibility.  His warnings given before the 2008 mortgage meltdown, an unnecessary tragedy that cost millions of Americans their homes, should be studied by everyone – Fed officials in particular – who insist that financial bubbles can’t be identified in advance.  

For years, as a member of the House Banking Committee, Paul would hold Federal Reserve chairmen’s feet to the fire in their official congressional appearances.

At one such hearing, Congressman Paul asked Fed chief Ben Bernanke if gold was money.

“No,” said Bernanke.

“Then why do central banks hold it?” asked Dr. Paul.

Paul’s latest warnings about economic disaster come from his February 17 column about the administration’s new fiscal year 2021 budget proposal.  He writes:

“President Trump deserves credit for proposing an 11.6 billion dollars cut in funding for the Department of State and the US Agency for International Development (USAID). Foreign aid does little to help impoverished people overseas. Instead, it benefits foreign government officials willing to do the US government’s bidding. The State Department and USAID are extensively involved in US intervention abroad, including efforts to overthrow governments….

“Even if Congress agrees to all of President Trump’s cuts, federal deficits will still be over one trillion dollars for the next several years. However, President Trump claims the budget will balance in 15 years. In order to show a balanced budget by 2035, the administration assumes three percent economic growth for most of the next decade. This level of growth is unlikely to come to pass. Instead, the current boom will likely end soon, and the economy will experience another major recession. Signs that we are on the verge of a downturn include rising homelessness and the Federal Reserve’s bailout of the repurchasing market.”

Dr. Paul observes that if Fed interest policies remain unchanged, it will inevitably lead to a dollar crisis.  If on the other hand, the Fed lets rates normalize, the debt bubble will burst.  

As we have said in these discussions, the Fed has put itself into a box.

Read Dr. Paul’s latest column HERE.

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Stock Market Jitters

The Coronavirus is giving a lot of stock market professionals the jitters.   

No wonder.  An economic slowdown in China, spreading with the virus, spells trouble for highly-leveraged sectors of its economy, trouble that can snowball quickly to other sectors.  

And to other countries.

It’s wise to be defensive now.  Simply ask yourself how attractive is the thought of being quarantined in some foreign port on a cruise ship right now.  A slowdown in travel, hospitality, and trade will have wide consequences for stocks.

Consider supply chains as well.  Companies that depend on parts manufactured in China are drawing down thin inventories as the quarantines tighten.  The quarantine is already crippling some Korean automobile manufacturing dependent of Chinese suppliers.

You get the idea.  As the cliché goes, it really is a global economy.  That will become even more clear if the virus isn’t contained and dominoes start falling.

We think most people work way too hard for their money to swallow whole the empty assurances that this outbreak will be contained.  No matter what the WHO and the CDC and the Chinese bureaucrats say, the truth is they don’t really know.  Nobody really knows.

One thing we do know from the monetary philosophy that reigns at central banks:  they will try to offset any slowdown with additional liquidity.   Central bankers questioned about the risks of the coronavirus have made that clear.

It is no time to be complacent.  Protect your profits with gold.

As the world has discovered many times, gold is the best place to go in a crisis.  

Learn more and protect yourself from a jittery stock market.  Call Republic Monetary Exchange and speak with one of our gold and silver professionals. 

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Do You Trust Washington or Gold?

It’s time to review the latest numbers.  We hear from Washington that the economy is stronger than ever.  Perhaps.  But that doesn’t mean the American middle class is in good shape.  

So here are the disturbing facts:

Americans are so financially stressed that 32 percent of them run out of money between paychecks.  The percentages of those who run dry between paydays are worse among the poorest workers, but the problem of living from paycheck to paycheck is not limited to them alone.  For example, 31 percent of workers earning $100,000 to $129,999 suffer from the same syndrome: running out of money between paydays.

Americans are deeper in debt than ever before.  US household debt has passed $14 trillion dollars.  That’s $1.5 trillion more than late in 2008, when the economy cratered and millions of American lost their homes.  Meanwhile, and although the economy is in an record expansion now going on 127 months, credit card debt is at record highs.  Just in the last quarter alone balances rose 5 percent to $930 billion, while delinquencies are at an 18-month high.  Half of student loans are non-performing, in some state of deferral, grace period, or default.

Yet in a prolonged expansion and what is touted as the strongest economy ever, the chairman of the Federal Reserve had to lecture congress about its deficits.  Powell made the obvious point that the current deficit and debt trajectory is unsustainable.  

On Monday, President Trump proposed a federal budget for fiscal year 2021, one that comes with another trillion-dollar deficit.  And never mind that the proposal is claimed to put the government on track for a balanced budget in 15 years.  We are old enough hands that we have heard that sort of thing before.  In fact we have heard it more times than we can count.  

Here’s a reality check: the only budget that ever counts in Washington is the one for the current year.

And we don’t rely it in very much.

We don’t put much faith in anything that comes out of Washington.  As we said, we’ve are students of history and have ourselves been around for a long time.  

That’s why we put our trust in gold.

Shouldn’t you do the same?

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