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Market Notes and Quotes

06 Feb
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Market Notes and Quotes

Gold Market Discussion

Sometimes key insights and financial news, things that shed light on the value of the dollar, the solvency of the country, and gold, come our way at a furious pace.  

As part of our commitment to keep our clients and readers informed, we occasionally assemble them in one post.

Cities Can’t Pay Their Bills

“According to a recent analysis of the 75 most populous cities in the U.S., 63 of them can’t pay their bills and the total amount of unfunded debt among them is nearly $330 billion. Most of the debt is due to unfunded retiree benefits such as pension and health care costs.

“This year, pension debt accounts for $189.1 billion, and other post-employment benefits (OPEB) – mainly retiree health care liabilities – totaled $139.2 billion,” the third annual “Financial State of the Cities” report produced by the Chicago-based research organization, Truth in Accounting (TIA), states.”

  • Hartford News Times, 1/31/19

Student Loan Crisis Goes Unmentioned

Student Loan Defaults

Overlooked in the State of the Union Address was “the truly record-breaking $1.465 trillion that Americans face in outstanding student loan debt. Though that figure was measured in November 2018, Politico education reporter Michael Stratford noted that the pending student debt now totals roughly $1.5 trillion.

“… Student loan debt has been cited as one of the reasons for declining homeownership and, only projected to worsen over time, economists worry that it could pose other serious financial risks.”

  • Fortune, 2/6/19

Gold:  The Bubble Alternative

“The essential attribute of gold is that it is a contra central bank asset. It’s the one asset that can’t be influenced, manipulated, created or destroyed, for that matter, by the central banks. It’s the one asset that history has proven, without a doubt, can retain its value regardless of the mayhem and financial disorder caused by governments…

“Gold is the alternative asset to a bubble ridden financial system that is driven by the central banks.”

– David Stockman, quoted in USAWatchdog, 2/6/19

UN Warns of Currency Wars

According to the UN report, continuing or hiking tariffs between [the US and China]  would have an unavoidable impact on the “still fragile” global economy, including disturbances in commodities, financial markets and currencies.

The UN trade conference report said, “One major concern is the risk that trade tensions could spiral into currency wars, making dollar-denominated debt more difficult to service.  Another worry is that more countries may join the fray and that protectionist policies could escalate to a global level.”

… A currency war occurs when nations deliberately depreciate the value of their domestic currencies in order to stimulate their economies.

  • CNBC

Bad News for 25 Million Americans Who Expect Their Pensions Are Funded

“Total unfunded liabilities at U.S. state and local public defined benefit pension plans are about $1.4 trillion — more than three times their pre-financial crisis level. After a decade of strong investment returns, the funded status of public pension plans continues to worsen. The next economic downturn will deliver the coup de grâce to some public pensions. As the probability of defaulting on promised benefits increases with falling asset prices and bloated pension liabilities, retirees nationwide will face the grim prospect of receiving greatly reduced benefits during their golden years.”

– The Hill

Central Banks Own Gold

Alan Greenspan

“If the dollar or any other fiat currency were universally acceptable at all times, central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute.”

– Alan Greenspan