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Bigworld, Thanks. That sounds like a logical strategy.
Reportedly some of the Treasury auctions last week had poor demand, which prompted a worrying rise in Treasury yields, which contributed to the selloff in stocks. I figure we'll see more of that in the years ahead (lack of demand for US Treasuries), as the global de-dollarization process grows.
Also, with US debt rising by an astounding 1 tril every 100 days, it will be in the $40-50 tril range within the next several years. So a ticking time bomb, and increasingly the world will leave the US dollar system. For this reason, with my own monthly bond ladder, for now I decided to only go out to Dec 2026. That's when the US debt hits 40 tril, on its way to 50 tril by 2029 (see below), assuming a rate of 3 tril in new debt per year. I'm figuring the dollar crisis hits between 40 and 50 tril, so in the 2026-2029 period. At that point the bond allocation will need to be near zero, and stocks will presumably also get clobbered, so that only leaves hard assets like paid-for real estate, land, metals, etc -
Mid 2024 -- 34.5 tril
Mid 2025 -- 37.5 tril
Mid 2026 -- 40.5 tril
Mid 2027 -- 43.5 tril
Mid 2028 -- 46.5 tril
Mid 2029 -- 49.5 tril
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gfp: I'll post Rinear's column on Sunday. I see too many stocks hitting 52 week lows. I see too many insiders unloading shares. The market is being held up by a handful of stocks due to weighting. Buffett has his biggest war chest ever just waiting to pounce after a crash. The market is going up and down based on one factor...whether they think the Fed will cut rates this summer. I think we are in a stealth bear market. But if the Fed comes through with a rate cut then we rally again. I'm not shorting. Too risky. Just holding my real asset plays with some defensive high yielding stocks like DVN and ENB. Parking extra cash in silver with Vaulted. For convenience we bank with Wells Fargo, which is a too big to fail bank. I still think the commercial real estate implosion is eventually going to take down a lot of smaller regional banks.
Bigworld, I'd be curious to get Rinear's take on what happened with the stock market in today's last half hour (?) It sure looked like the PPT stepped in, and on big volume. The recent selloff was close to getting out of hand, but at ~ 3:30, it was like someone flipped a switch and up she went.
I remember a similar pattern occurring last October, on the Friday before the 'event' that started the Israel-Hamas war. Around 3.30 on Friday, the market was threatening a scary 'crescendo puke', but some mysterious force suddenly stepped in massively on the buy side. Then the next day (Sat), the Hamas 'attack' occurred. In hindsight it was obvious the Fed / PPT had come to the rescue late Friday, presumably with foreknowledge that the Hamas 'attack' would occur the next day (Saturday). Then the next week they (Fed / PPT) piled on and continued the buying, keeping the market from tanking.
Fwiw, I'm figuring the motivation this time is to prevent a deepening stock market rout from becoming an issue that could affect the US election. The Fed would actually prefer a weaker stock market right now to help in their inflation fight (by reducing the 'wealth effect'), but Powell has to be careful to avoid a market drop getting out of hand and hurting Biden & Co. So this is part of my rationale for trying to stay long the stock market, albeit with only a token position (10%). I figure Powell has to step in if stocks start to weaken too much.
But even with a 'Fed Put' to limit the downside, the market looks treacherous. It's obvious the Fed and broader finance oligarchy want to help the incumbent Dems, but there are also some extreme factions (neocons, etc) who desperately want the opposite. We can only guess, but it appears there are some deep divisions within the Deep State these days. The main oligarchy wants to focus on Russia/China (via the Ukraine war), but the neocon factions desperately need to stop Iran's nuclear program (via the 'US bombs Iran' strategy). Biden & Co refuse to do 'US bombs Iran', so one way or another, the neocon groups have to get a Rep administration. Anyway, that's my analysis, based on limited info. But just a guess, and lots of unknowns and landmines over the next 6 months..
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GFP: What I am keeping in Vaulted I don't really consider to be an investment. I consider it as a cash allocation held in something other than the US Dollar. I don't know when the bank failures are going to start, but they didn't put in "bail-in" laws and regulations a few years ago for nothing. I will keep about $10,000 in our checking account for month to month expenses and a cash cushion for unexpected things like car repairs, etc. The fundamentals for silver remain strong. It is still 40% off its all time highs. And silver usage exceeds mining output. Silver is used in solar applications, pharmaceuticals and electronics. Sure, the price has been manipulated for over a decade. But at some point the demand from futures buyers for actual delivery is going to exceed the Comex and London markets ability to supply. A squeeze will happen and silver will go to new highs. The timing is unknowable. but the math is clear. Silver is going much higher. Unlike the purchasing power of the US Dollar.
Rickards' latest on Gold, CBDC -
>>> Trump Vows to Stop Biden Bucks
BY JAMES RICKARDS
MAY 28, 2024
https://dailyreckoning.com/trump-vows-to-stop-biden-bucks-2/
Trump Vows to Stop Biden Bucks
This past weekend, Donald Trump spoke at the Libertarian Party’s national convention. The media are gloating that the crowd booed Trump at times.
But the fact that they gave Trump a cool reception shouldn’t come as a surprise. Many libertarians (though not all) are for open borders. Trump wants a border wall. Libertarians doctrinally support unfettered free trade, while Trump believes in tariffs to protect American industries and workers.
But Trump was cheered when he addressed a topic I’ve been talking about for over two years — central bank digital currencies (CBDCs), or as I call them, Biden Bucks.
Trump pledged that he would block the implementation of CBDCs if elected:
To protect Americans from government tyranny, as your president, I will never allow the creation of a central bank digital currency.
He warned that CBDCs were a “dangerous threat to freedom” and that they would give the government “absolute control” over money.
Whatever you think of Trump personally, he’s absolutely correct about CBDCs. I’ve extensively documented the threats they pose to your freedom and privacy. The federal government would be able to track every purchase you made and punish you if it didn’t approve of how you spent your money.
CBDCs are direct liabilities of a central bank. That means they own the money — you don’t. With that comes control. They basically give you permission to use that money, but permission can be subject to conditions.
And in case of recession, they could impose negative interest rates on your money in order to force you to spend money, which is supposed to stimulate the economy.
Proponents of CBDCs argue that I’m being paranoid and that the government wouldn’t use them to control you. Many of them probably believe that and think CBDCs are nothing more than a more efficient payments system.
But history shows over and over again that if you grant government a certain power, it’ll eventually use it.
It usually happens under the pretext of some emergency. To cite an example, the Patriot Act never would have passed if it wasn’t for 9/11. But once the emergency recedes, government rarely gives up its power.
Last week I raised the possibility that the individual states could potentially defeat the implementation of Biden Bucks. In the latest development, the House of Representatives is joining the fray.
Last Thursday, the House voted to advance legislation blocking the development of Biden Bucks, called the CBDC Anti-Surveillance State Act. All Republicans voted for it. They were joined by just three Democrats.
The legislation would have to make it through the Senate, which is unlikely given Democratic control of the Senate through Kamala Harris’ tie-breaking vote. But the fact that actual legislation is coming out to stop Biden Bucks is a major sign of progress.
This issue may finally be getting the attention it needs.
I like to think I can take credit for that since I’ve been one of few voices who’s been publicly warning about Biden Bucks.
It won’t be easy to stop them, but it’s a fight we need to have because so much is at stake. If we fail, you can kiss your freedom and privacy goodbye.
Owning gold is a powerful step you can take to defend your wealth against Biden Bucks because the government can’t control it.
Below, I show you how to go on your own personal gold standard. Read on.
Go on Your Own Personal Gold Standard
By Jim Rickards
Elites are extremely hostile to the idea that gold should have any role whatsoever in the monetary system. To them, gold is truly a barbarous relic, as John Maynard Keynes was supposed to have said. You might as well propose bringing back the horse and buggy.
Except Keynes never said gold was a barbarous relic. What he did say was more interesting. In his 1924 book Monetary Reform, Keynes in fact wrote, “The gold standard is already a barbarous relic.”
Keynes was discussing not gold, but the gold standard. There might not seem to be a difference, but there is. In the 1924 context, he was right. The classical gold standard ended in 1914 with the outbreak of WWI. To pay for the war, combatants printed massive amounts of money.
After the war many wanted to return to the prewar gold standard. In 1925, for example, the British exchequer was Winston Churchill. He wanted to return to the old gold price, ignoring the fact that the wartime money printing demanded a much higher gold price. He in effect overvalued the pound.
Keynes told Churchill this would be a deflationary disaster. If Britain was to go back on a gold standard, it would have to set the gold price higher. But Churchill ignored his advice.
The result was massive deflation and depression in Great Britain, years before depression struck the rest of the world.
The notoriously flawed gold exchange standard that prevailed until 1939 should never have been adopted, and should have been eliminated before WWII did the job. These days, there isn’t a central bank in the world that wants to go back to a gold standard (though many are hoarding gold themselves). But that’s not the point. The question is whether they will have to.
I’ve had conversations with several Federal Reserve Bank presidents. When you ask them point-blank, “Is there a theoretical limit to the Fed’s balance sheet?” they say no. They say there are policy reasons to make it higher or lower, but that there’s no limit to the amount of money you can print.
That’s completely wrong. That’s what they say; that’s how they think; and that’s how they act. But in their heart of hearts, some people at the Fed know it’s wrong. Luckily, people can vote with their feet…
I always tell people who say we’re not on the gold standard that, in a way, we are. You can put yourself on a personal gold standard just by buying gold. In other words, if you think that the value of paper money will be in some jeopardy, or confidence in paper money may be lost, one way to protect yourself is by buying gold. And there’s nothing stopping you.
The typical response is, “What’s the point of owning gold? They’re just going to confiscate it, like Roosevelt did in 1933.” I find that extremely unlikely.
In 1933, we’d just come through four years of the Great Depression, and Roosevelt was new in office. People talk about the first hundred days, but he closed the banks right after he was sworn in. And he confiscated gold only a few weeks later.
And it wasn’t as if Eliot Ness was going door to door, breaking into your house and taking gold. They wanted to get a small number of people who had 400-ounce bars in bank vaults. And they got those people because they were able to close the banks and use them as intermediaries to confiscate that gold.
But now, gold is far more dispersed, and there’s far less trust in government. If the government tried to confiscate gold today, there would be various forms of resistance. The government knows this. So they wouldn’t issue that order, because they know it couldn’t be enforced, and it might cause various kinds of civil disobedience or pushback.
As long as you can own gold, you can put yourself on your own gold standard by converting paper money to gold. I recommend you do that. I’m not suggesting you convert all your dollars to gold. Not at all.
But I do recommend having 10% of your investable assets in gold for the conservative investor, and maybe 20% for the aggressive investor — no more than that. Those are very high allocations relative to what people have. Most people own no gold.
If demand spiked suddenly, there’s not enough gold in the world — at current prices — to satisfy that demand. Gold prices would have to rise dramatically to bring them in line with demand.
If some scenarios play out, you are going to see the price of gold rocket to the moon. And it may happen in a very short time.
You shouldn’t expect a steady, gradual increase. Gold may to drift along sideways, going nowhere for a period. Then you’ll see a spike, then another spike and then a super-spike. It could happen within months.
At that point, gold becomes a major force. Ultimately I expect gold to reach $15,000 an ounce or more. That figure isn’t made up. I didn’t come up with it to be provocative. It’s a product of the actual math. They’re the numbers you get when you simply divide the money supply by the amount of gold in the market. Under some scenarios, gold could even reach $27,000. There are many variables in play.
When the super-spike happens, you’re going to have two Americas. You’re going to have one America that was not prepared. Paper savings will be wiped out; 401(k)s will be devalued; pensions, insurance and annuities will be devalued through inflation. That’s because it’s not just the price of gold going up. It’s the dollar going down. Gold is just an indicator.
It’s like taking the temperature of a patient with a fever and blaming it on the thermometer when it reads 104. The thermometer’s not to blame for the fever; it’s just telling you what’s going on.
Likewise, the price of gold isn’t an economic object or aim in itself; it’s a price signal. It tells you what’s going on in the economy.
And gold at the levels I’m talking about would mean that you’ve now verged into hyperinflation, or something close to it, because nothing happens in isolation.
Once expectations shift toward inflation, which is happening, it can be dramatic. Though the rate of inflation has reduced since peaking in June 2022, inflation’s not going away. People are now beginning to sense that.
Still, central banks will never voluntarily return to a gold standard. But if gold is such a barbarous relic, if gold has no role in the monetary system, if gold is a “stupid” investment, then why are the Russians and Chinese, among others, stockpiling gold hand over fist? Are they stupid?
Well, I’ve spoken with many of them and I can assure you they’re not stupid. But if there’s a run on paper currencies (which is entirely possible) or borderline hyperinflation (also possible), central banks may have to go to a gold standard. Not because they want to, but because they find it necessary to calm the markets.
I suggest you buy your gold at current levels — around $2,360 — and ride the wave up to much higher levels. It’ll protect your wealth in the days ahead. Like every market, it will fluctuate. Nothing goes up in a straight line. But you want to focus on the longer-term picture. And it looks very bright for gold.
So I invite you to go on your own personal gold standard. One day, the rest of the world may join you.
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Bigworld, That Vaulted program does sound interesting, and has liquidity and convenience advantages over holding bullion. And the silver markup especially is much lower than with bullion. Getting some metals exposure using GLD / SLV is another option, with lower costs and fees. It's just 'paper' gold, but is well suited for trading.
I figure it's best to have things spread around to avoid too much in one asset class. What gets me with metals is the volatility. Those 5% moves are great when it's going up, but it's a roller coaster, and also the price suppression mechanism periodically kicks in.
Btw, with stocks I've been sitting with a 10% allocation, but am not looking forward to the rest of the year. With the election approaching, I'm hoping the Fedsters want to keep the market reasonably buoyant, but lots of landmines lurking. I'm tempted to put that 10% in the money market / T-bills and collect the easy 5%, but am trying to think longer term and maintain at least some stock exposure.
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Bigworld, >> the plandemic <<
With Covid, while it's been pretty well established that the virus came out of a lab, it's a big jump to assume that the release was deliberate. While there are some suspicious red flags that suggest a deliberate release, what is missing is the motive, ie what would be gained? I can come up with possible motives, but there are problems with each -
1 - Neutralize China -- One obvious scenario has Covid as a US developed race-specific bioweapon targeting Asians, with the goal of neutralizing China as a rival to the US/West. That was the first thing I thought of when Covid appeared in late 2019, but it soon became apparent that Covid is not race specific, although it's possible that the US scientists had intended it to be race specific, but screwed up.
2 - Vaccines -- Another scenario has Covid as the justification for the vaccine mandates. So the vaccines were the goal, with some type of population control agent contained within the vaccine. One problem here is that there were different vaccines from different companies, and the 'cooked' vaccine would presumably only be found in one. And if the goal / motive is population control, the US and West would be hit worst, with China getting off scot-free since they developed their own 'non-cooked' vaccines.
3 - China Did It -- China has a big overpopulation problem, so they decide to cull the herd. This theory has many problems, including why would Xi impose such s strict lockdown if his goal was to cut China's population in half? Variations on this idea are that he timed Covid's release with the Wuhan Military Games in order to spread Covid globally. But the same could be said for the 'US Did It' scenarios, using the Wuhan Games as a super spreader event, and to obscure Covid's origins, etc.
4 - 2020 election -- Another idea floating around is that Covid was deliberately released to make possible the fixing of the 2020 election (mail-in voting, etc). But it makes no sense to wreck the global economy just to stop one candidate, since the Deep State could just 'do a JFK', or use one of their infamous pills that induce a heart attack or pulmonary embolism.
5 - Order out of Chaos -- A longer term time horizon that is still unfolding. Who knows, but looks like the jury is still out.
Add in some bungling due to the incompetence of our heavily inbred 'elites' -
gfp: Whatever happens I think precious metals will retain their value in purchasing power. And if the world just happens to go back to a partial gold backing of an international trade currency then gold will have to be repriced far higher than it is now as Rickards has written about. Nice move upward in almost all commodities today, especially silver. I bought $10K last week through Vaulted and the rise in silver has already overtaken the 2% over spot commission you pay to buy (1.6% for gold). Compared to the premium you pay to buy coins....the Vaulted program is easy to use and is very cost effective. You transfer money from your checking account. Once it gets credited in Vaulted you make your purchase. It goes through in minutes. If I want to sell the same thing in reverse. You place the sell order, it gets executed within minutes and the money gets credited. If you want to take out the cash you just transfer it back into your checking account. No worries about shipping. Just 0.6% storage fee billed at 0.3% twice a year. Very reasonable for the ease and safety.
Bigworld, >> Bretton Woods type international reset <<
The US/West finance oligarchy could have strategically transitioned to the SDR / Special Drawing Rights years ago (say after the 2008 financial crisis). The US would have lost some dominance, but combined with Europe, the 'West' would have remained as the top dog globally, with China forever locked into a subordinate position. There would have been no rise of BRICS to worry about, and the growing US debt bomb would have been made moot. US/West hegemony would have been made permanent.
For whatever reason they didn't go that route, and we are now are faced with the rise of the mega rival China-Russia-BRICS, the global exodus out of the dollar system, and the looming dollar debt bomb disaster. 15 years ago, China-Russia would have welcomed the SDR as the new world's reserve, if only to get out from under the thumb of dollar hegemony. Now, they (BRICS) have their own replacement in the works, and the 'window of opportunity' for an SDR type solution has passed.
Back ~ 2016, Jim Rickards suggested (see below) that the US/West finance oligarchs would deliberately create a crisis to force the world into the new global financial system (SDRs or similar arrangement). That would have been the time to do it (10-15 years ago), before China-Russia-BRICS really got rolling. But instead, they decided to ride the dollar system into the ground, and try to hold things together, via the US military and financial warfare, sanctions, de-SWIFT-ing, etc. Now they (we) are increasingly left with war as the last option. Historically this is what happens to empires, but the difference now is that the teetering empire has over 5000 nuclear weapons.
gfp: The government is borrowing an additional $3 Trillion a year so our debt will hit $40 Trillion next year. The rest of the world is de-dollarizing. They don't want our paper IOUs in sufficient quantities any more. So all this debt either has to be taken on by domestic investors of the Fed will grow it's balance sheet even more and purchase the paper, which is why inflation is a real problem. Which is why I'm parking my extra liquidity in gold and silver through Vaulted instead of Treasury paper or bank deposits. We're going to hit a financial crisis at some point. Bank failures which could lead to bail ins. Government insolvencies. Then before you know it we'll get a Bretton Woods type international reset where gold is repriced many multiples above its current manipulated pricing.
gfp: Since the plandemic I cannot think of a worse sector to be invested in than commercial real estate. Due to a weak economy and work from home options large city commercial properties are being sold for as little as 10 cents on the Dollar. There is a huge over capacity of commercial buildings, and most would be too costly to retrofit to residential space. Shopping mall REITs are also to be avoided. Mall traffic is down because inflation has robbed a large portion of consumers of their discretionary income. Many can't even afford the basics anymore. Retailers like Target have been issuing warnings about the tapped out consumer. So are fast food franchises.
gfp: Age issues or not, if our corrupt and cowardly "representatives" in Washington foist this prison planet money system on us my wife and I will be forced to move off shore. Panama, Costa Rica, Thailand, Indonesia, or who knows. But I will not live in a prison of the government's making. Their evil and corruption has been on display for decades.
>>> US federal budget crosses grim milestone as interest payments overtake defense spending
Yahoo Finance
by Rick Newman
May 22, 2024
https://finance.yahoo.com/news/us-federal-budget-crosses-grim-milestone-as-interest-payments-overtake-defense-spending-155521072.html
The United States has long had the world’s biggest defense budget, with spending this year set to approach $900 billion.
Yet this spending is rapidly being eclipsed by the fastest-growing portion of federal outflows: interest payments on the national debt.
For the first seven months of fiscal year 2024, which began last October, net interest payments totaled $514 billion, outpacing defense by $20 billion. Budget analysts think that trend will continue, making 2024 the first year ever that the United States will spend more on interest payments than on national defense.
Just two years ago, interest payments were the seventh-largest federal spending category, behind Social Security, health programs other than Medicare, income assistance, national defense, Medicare, and education.
Interest is now the third-biggest expenditure after Social Security and health. And not because any of the other programs are shrinking. While most government expenditures grow modestly from year to year, interest expenses in 2024 are running 41% higher than in 2023.
Interest payments are ballooning for two obvious reasons.
The first is that annual deficits have exploded, leaving the nation with a gargantuan $34.6 trillion in total federal debt, 156% higher than the national debt at the end of 2010.
In the 1990s, the average federal deficit was $138 billion per year. In the 2000s, it was $318 billion. In the 2010s, it was $829 billion. Since 2020, the annual deficit has swelled to $2.24 trillion, largely due to pandemic-related stimulus measures in 2020 and 2021. The projection for 2024 is a $1.5 trillion shortfall.
As a percentage of GDP, the annual deficit has nearly doubled in just 10 years, from 2.8% in 2014 to a projected 5.3% in 2024. So there's just a lot more borrowing to pay interest on.
The government is also paying more to borrow as interest rates have shot up over the last two years. Like consumers buying homes and cars, Uncle Sam benefits from cheap money when rates are low and bears a heavier burden when rates are high.
From 2010 through 2021, the average interest rate on all Treasury securities sold to the public was just 2.1%, which helped keep total interest payments manageable.
But in 2022, the Federal Reserve started jacking up rates to tame inflation, and the government now pays an average interest rate of 3.3%. So, the amount of borrowed money keeps going up, and the cost of borrowing that money is rising too.
More taxpayer money going to interest expenses will eventually leave less money for everything else, and at some point, the Treasury won’t be able to borrow its way out of the problem anymore.
It's an unsustainable situation, which could lead investors to lose faith in the government’s creditworthiness and demand even higher rates to buy Treasurys.
The urgency of the problem, however, is open to debate.
At the recent Milken Institute conference in Los Angeles, luminaries such as billionaire investor Ken Griffin and former House Speaker Paul Ryan warned of a looming debt crisis if the government’s interest costs continue to mushroom. But many prominent financiers also touted the United States as the best destination in the world for investment, despite all its problems.
And many predictions of a debt crisis when interest expenses were a lot lower have so far turned out to be wrong.
Two people who seem unperturbed by America’s debt burden are President Joe Biden and former President Donald Trump, the two leading candidates in this year’s race for the White House. Neither is making deficit reduction a focus of his presidential campaign.
Biden does have a plan of sorts. He’d raise taxes on businesses and the wealthy and use some of that revenue to trim annual deficits. But Biden also wants to spend more on social programs, which could offset any savings.
Trump says he’d encourage more oil and natural gas drilling, which would somehow produce a windfall of tax revenue that would pay down the debt. But there’s no obvious way that would happen, no matter how much drilling takes place.
Besides, both men have presided over a huge run-up in the national debt.
The national debt rose by $7.8 trillion during Trump’s four years as president and $6.8 trillion during Biden’s first three years and four months.
Earlier this year, the Committee for a Responsible Federal Budget helped Yahoo Finance analyze who’s responsible for the national debt, and the blame falls more or less equally on administrations of both parties borrowing to finance wars, tax cuts, spending programs, and stimulus measures during recessions.
When the time does arrive to fix the debt, the inevitable solution will be a mix of spending cuts and tax hikes that will make a lot of people unhappy.
Which reveals the real reason no politician wants to address the problem — everyone hopes it'll be the guy after them.
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>>> A $10 Billion Real-Estate Fund Is Bleeding Cash and Running Out of Options
The Wall Street Journal
by Peter Grant
5-20-24
https://www.msn.com/en-us/money/realestate/a-10-billion-real-estate-fund-is-bleeding-cash-and-running-out-of-options/ar-BB1mHSJw?cvid=b2ff3c3a3bdd460de568db2dc9f0b0e8&ei=39
A giant commercial real-estate fund is scrambling to escape a looming cash crunch caused by the long line of investors who want their money back.
The $10 billion fund from Starwood Capital Group has been trying to preserve its available cash and credit by limiting investor redemptions. In the first quarter, the fund was hit with $1.3 billion in withdrawal requests but satisfied less than $500 million of them, according to regulatory filings.
Even with these limitations, the fund’s liquidity, consisting of cash, marketable securities and a bank line of credit, has been drying up. It totaled $752 million at the end of April, down from $1.1 billion at the end of last year. It was $2.2 billion at the end of 2022, according to filings.
“They don’t have a lot of liquidity left,” said Kevin Gannon, chief executive of Robert A. Stanger, an investment bank that specializes in real-estate funds.
These developments have left the Starwood Real Estate Income Trust, known as Sreit, with three options—none of them appealing. It could take on more debt. It could sell properties into a tough market. Or it could halt completely or limit further redemptions, a move that would greatly impair the fund’s ability to raise new money. Unless it takes one of these three steps, Sreit looks poised to run out of cash and credit before year-end if the current pace of redemptions continues.
Rates, Risk & Real Estate: Starwood REIT limits withdrawals
Other real-estate funds are handling the pressure from the long queue of redemptions in varying degrees. The largest of the funds, Blackstone Real Estate Income Trust, or Breit, has $7.5 billion in liquidity and earlier this year was able to fulfill all redemption requests. But withdrawals continue to exceed new fundraising.
Sreit was one of the most prominent real-estate funds launched between 2017 and 2022, second in size only to Breit. These funds, known as nontraded real-estate investment trusts, invest in commercial property similar to publicly traded REITs. In all, these vehicles raised about $95 billion, mostly from individual investors, according to Stanger.
The funds also were very popular when interest rates were low because they paid dividends in the 5% range. Sold through financial advisers, they also gave small investors the opportunity to participate in what was then a hot commercial-property market.
But investors started to bolt as interest rates jumped and commercial real-estate values fell. In late 2022, Sreit and others began limiting redemptions to as much as 2% of their net asset values a month and up to 5% a quarter.
New fundraising also has dropped sharply as some analysts have criticized the structure of the funds and financial advisers have raised warnings. Sreit’s new fundraising has dwindled to about $15 million a month, down from more than $600 million a month in the first half of 2022.
Sreit’s ability to make redemptions will help determine whether the funds will be a long-term feature of the real-estate market or fade away. Some analysts believe that the funds are proving themselves through a tough commercial-property market. Others say the funds are showing major problems.
Because it can’t raise enough new funds to make up for even its limited redemptions, Starwood has been considering a number of difficult options, say people familiar with the firm’s thinking.
The fund could borrow more, but that would be costly at today’s high interest rates. Sreit’s current debt is already equal to 57% of its assets, which is more than many comparable real-estate funds. Sreit’s target leverage is 50% to 65%.
The fund could sell assets. Sreit owns hundreds of properties throughout the country, mostly warehouses and rental apartment buildings in the Sunbelt. But the value of most commercial real estate has been hammered by high interest rates, which drive up costs in the high-leverage business. Rental apartments have also been hurt by overbuilding in many markets.
Most rental-apartment owners who bought in the years just before the interest-rate spike “would prefer not to sell in this market,” said Matthew Werner, managing director with asset manager Chilton Capital Management.
Finally, Sreit could halt or limit further investor redemptions. But analysts believe that would be a last resort because it would make it even harder to raise new money. One of the main selling points of Sreit has been that investors would be able to redeem their shares, subject to the 2% and 5% restrictions.
A redemption halt “would be fatal,” Stanger’s Gannon said. “You wouldn’t be able to raise another dime.”
Sreit was launched in 2018 by Starwood Capital, a private-equity firm headed by Barry Sternlicht, the storied real-estate investor and founder of the Starwood Hotels chain. Sreit raised more than $13.5 billion in equity, which it used to buy more than $25 billion in real-estate assets.
The fund attempted to sell properties last year as the redemption queues began to lengthen. Sreit sold a portfolio of single-family rental homes to Dallas-based Invitation Homes for $650 million, including debt.
But more recently, the fund has slowed sales because of depressed prices. Like other owners, Sreit is hoping prices will rebound later this year, especially if the Federal Reserve begins to cut interest rates.
Instead, Sreit has relied on its line of credit. But that won’t last much longer at the rate the fund is drawing it down. The line has $275 million of capacity, down from its original size of $1.55 billion.
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Rickards - CBDC -
>>> The Last Hope Against Biden Bucks?
BY JAMES RICKARDS
MAY 21, 2024
https://dailyreckoning.com/the-last-hope-against-biden-bucks/
The Last Hope Against Biden Bucks?
For the past two years, I’ve been warning about the emergence of central bank digital currencies (CBDCs), or as I like to call the U.S. version, “Biden Bucks.”
Can good old-fashioned American federalism stop them? We’ll consider that possibility today.
If you’re a new reader who isn’t familiar with Biden Bucks, or an existing reader who could use a reminder, the Biden administration is planning to create a purely digital dollar.
These Biden Bucks would have the full backing of the U.S. Federal Reserve. They’d replace the cash (“fiat”) dollar we have now. And if Biden got his way, they’d be the sole, mandatory currency of the United States.
What does this mean for you? It would make your money less truly your own. It would be subject to government control.
We Just Want a More Efficient Payment System!
Biden Bucks are being peddled as a more efficient and convenient form of money. They say they’re just simplifying the payment system and making it more efficient. It’ll be much more convenient than the convoluted system we have today.
And they’re actually right about that. A digital dollar will be simpler, more efficient and more convenient to use.
Assume you buy gasoline at your local gas station. You pay with a credit card, which begins a payment process involving maybe five separate parties.
These include the merchant from whom you bought the gas, the credit card company, the bank and an intermediary called a merchant acquirer (no need to explain what a merchant acquirer does for today’s purposes, but just realize that it’s part of the payment system).
Ultimately the bank that issues your credit card sends you a bill, which you pay. You also pay a fee, maybe 3%, all to buy the gas.
But with a central bank digital currency, you could simply pay for the gas with an account you have at the Fed.
You would get rid of all the middlemen. You could bypass the merchant acquirer, the banks and the credit card company. A digital dollar would also eliminate many of the fees we currently face.
So yes, the payment system would be faster, cheaper, easier, more streamlined and more secure. What’s not to like as far as you’re concerned?
Well, if you’re concerned about your personal privacy, everything.
We Can’t Let You Destroy the Environment
Imagine this. To further advance his Green New Scam, what if Joe Biden and his cronies decided that gasoline needed to be rationed?
Your Biden Bucks could be rendered useless at the gas pump once you’ve purchased a certain amount of gasoline in a week! You want gas, but all you get is a one-word message: Declined.
How’s that for control?
Biden Bucks would create new ways for the government to control how much you could buy of an item, or even ban purchases altogether. It would keep score of every financial decision you make.
In a world of Biden Bucks, the government will even know your physical whereabouts at the point of purchase.
It’s a short step from there to putting you under FBI investigation if you vote for the wrong candidate or give donations to the wrong political party. If any of this sounds extreme, fantastical or otherwise far-fetched, it’s not.
Look at all the ways the government has abused its power to target its opposition in recent years.
Government Always Wants More Power
From unconstitutional “lawfare” against Trump, to the jailing of harmless J6 protesters who did nothing more than walk around the Capitol taking selfies (I’m not talking about those who committed violence that day, who should be punished to the full extent of the law), the federal government has overstepped its bounds.
Several months ago, the FBI and Financial Crimes Enforcement Network (FinCEN) sent letters to U.S. banks asking them to identify and provide a list to the government of customers using Zelle, Venmo and similar payment channels who mentioned “MAGA,” or “Trump” in their message traffic.
They also asked for details on bookstore purchases of religious articles including Bibles. Finally, they asked for details on those shopping at Cabela’s, Dick’s Sporting Goods or Bass Pro Shops, presumably on the view that those are places to buy guns and ammo.
This is a clear-cut violation of the First Amendment (free speech, freedom of religion), Second Amendment (right to bear arms) and Fourth Amendment (no unreasonable search and seizure).
It’s not a crime to write “MAGA,” etc. and therefore there’s no reasonable basis for suspecting a crime, and therefore no right to get the information without a warrant, which requires a judge. Any judge would likely reject the warrant request since there’s no probable cause.
This is an obvious case of profiling. If you shoot someone and you’re wearing a MAGA hat, you get arrested for the shooting, not the hat. In this case, the hat is enough to put you under surveillance because you have been profiled as “an enemy of the people” by the government’s definition.
I predicted this kind of surveillance would arise with the use of Biden Bucks since the government would have your financial records and would not have to go to the banks or get a warrant. I’d like to say I was wrong, but unfortunately I was right.
Why do you think it would stop there? Government always seeks to expand its power.
The Slippery Slope
In the latest example of federal overreach, the latest update of the IRS Internal Review Manual expands the scope of IRS investigation and audit activity to include anyone who impedes the government’s “ability to govern” or who poses a “threat to public safety or national security.”
Such phrases sound benign when applied to foreign terrorists or criminal masterminds. Then you realize they can just as easily be applied to political opponents, Trump supporters, podcasters, opinion writers, political organizers or everyday Americans who stand in the way of the administration’s ambitions.
The IRS can use threats of audits and investigations to intimidate social media platforms like Google, Facebook and Instagram into shutting down MAGA Republicans and others who oppose Biden policies.
The updated IRS manual also allows the IRS to leak taxpayer information to the Justice Department, the Department of Homeland Security or other agencies with enforcement power in order to sic those agencies on targeted victims.
This happens in a context where simple political opposition has been criminalized giving the IRS carte blanche to choose their victims. If you’re outspoken against the Biden administration, keep your tax records handy and get ready for a knock on the door.
So, again, why would you be surprised if the government used Biden Bucks to punish its political opponents? It’s just the natural progression.
Can it be stopped? There’s one possibility — and it comes from the individual states.
The Last Hope?
Last year, Indiana became the first state to reject CBDCs as a form of money. This year it enacted an additional measure that prohibited state agencies from accepting CBDCs as payments.
Florida, North Dakota, South Dakota, Tennessee, Utah, Alabama and Georgia have passed similar laws to block the imposition of CBDCs.
Will they succeed? It would be a triumph of federalism if they did, which has a rich American tradition.
But proponents of Biden Bucks invoke Article VI, Paragraph 2 of the Constitution, otherwise known as the federal Supremacy Clause. It establishes that the federal law takes precedence over state law.
Over the years, the federal government has gradually expanded its powers under the Supremacy Clause.
It might be an uphill battle, but the states might just be our best defense against the implementation of Biden Bucks.
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Rickards -- Land, Art, Gold, Diamonds -
>>> The “Old Money” Secret to Wealth
BY JAMES RICKARDS
MAY 20, 2024
https://dailyreckoning.com/the-old-money-secret-to-wealth/
The “Old Money” Secret to Wealth
I believe that we’re heading for another liquidity crisis or financial crisis. That doesn’t mean it’ll happen tomorrow, but there are disturbing signs that it might not be too far off.
It doesn’t mean the world’s going to end. But investors who aren’t prepared could see large portions of their portfolios wiped out. It could take years to rebuild them, and many investors just don’t have the time to recoup those losses.
But how do you prepare? You might want to start by looking at how “old money” preserves its wealth. Today I want to explore that.
On a cool evening in the fall of 2012, I joined a private dinner in Rome with a small group of the world’s wealthiest investors.
We dined at Palazzo Colonna, a private palace that’s been owned by one family for 31 generations or 900 years. My dinner companions were mainly Europeans, some Asians and relatively few from the United States.
Amid marble, gold, paintings and palatial architecture, I mused on the meaning of old money compared with the new money crowd that congregated for cocktails near the Connecticut home in which I lived at the time.
Old Money vs. New Money
Old money has proved they know how to preserve wealth over centuries, while the jury is still out on new money busy buying yachts, jets and exotic vacations.
In the United States, the “old money” is generally about 150 years old with fortunes dating to the mid-19th century. Families in this category include the Vanderbilts, Rockefellers and Carnegies.
Some U.S. family fortunes are almost 200 years old. But most of the great wealth today isn’t old at all.
It comes from success in the past 30–50 years including Mark Zuckerberg, Jeff Bezos and Warren Buffett.
Yet in Rome I was ensconced in a 900-year-old fortune still intact. Here was a family fortune that had survived the Black Death, the Thirty Years’ War, the wars of Louis XIV, the Napoleonic Wars, both world wars, the Holocaust and the Cold War.
I knew the Colonna family weren’t unique; there were other families like them throughout Europe who kept a low profile. These families are only too happy to be overlooked by the Forbes 400. That type of wealth and longevity could not be due merely to good luck.
In 900 years, too many cards are turned from the deck for luck alone to be sufficient. There had to be a technique.
How Do They Do It?
I turned to a striking Italian brunette to my right and asked, “How does a family keep its wealth for so long? It defies the odds. There must be a secret.”
She smiled and said, “Of course. It’s easy.” You just invest in “the things that last.”
She added that the secret was, “a third, a third and a third.”
She paused, knowing I needed more, and continued, “You keep one third in land, one third in art and one third in gold.” Her advice followed the first rule of investing — diversification
She meant that wealth should be allocated one-third to land, one-third to gold and one-third to fine art (of course, some cash is needed for operating costs and some business investment is fine also).
But the “old money” shows that true wealth preservation comes from art, gold and land rather than stocks and bonds.
That doesn’t mean you shouldn’t own stocks and bonds. You should — I own them myself. But for long-term wealth preservation, you should also dedicate a portion of your portfolio to the assets that “old money” invests in.
Many of my readers know that I recommend they hold 10% of their investable assets in gold. I’ve also written about the value of fine art.
But there’s another old money asset you might want to consider: diamonds.
Diamonds Are Forever
The cliche from ad campaigns about diamonds being “forever” rings true. And crucially, it’s no longer just a haven asset for the super wealthy. Diamonds are a protection asset for investors with a resale value.
As strategist Yoni Jacobs writes, while investors focus their attention on gold and silver (for good reason) they miss important benefits of diamonds.
Consider these four reasons he lists as to why diamonds are a good investment:
1. Highest Value per Unit Weight. Diamonds are the most valuable items in the world. And they are the most portable. A small number of diamonds can make you wealthy. So this portability is essential to store wealth in case of emergency. Would you rather carry a few diamonds in a small bag or have to carry gold bars?
2. Diamonds Have Industrial Use. Having the highest hardness and heat conductivity of any bulk material, diamonds possess tremendous value for industrial use. In fact, 80% of mined diamonds are used industrially. Many investors think the value of diamonds is only based on demand and speculation. The reality is they serve an important industrial purpose.
3. Necessary for Global Growth. With infrastructure projects developing in many emerging countries, roads and highways must be built. Diamonds are used in many tools for stone cutting, highway building and other technologies. Demand for diamonds used in these ongoing projects will increase, along with higher prices.
4. Diamonds Have Emotional Value. The value that diamonds give as gifts is immeasurable. Whether it is for engagement rings, anniversary gifts or Valentine’s Day presents, diamonds will always be a valuable asset and in demand for emotional relationships around the world. Diamonds’ portability may be one of the most important things to consider as the world faces turmoil.
Priceless
In some future crisis, when gold has spiked to $10,000 per ounce, a similar weight of diamonds would take you into the tens of millions range!
And like land, gold or art, diamonds are nondigital. They cannot be wiped out by power outages, asset freezes or cyberbrigades. That’s crucial in a time of looming central bank digital currencies (CBDCs) or as I call them in the U.S. context, “Biden Bucks.”
The biggest difference between diamonds and gold is that the market for gold is much larger. Gold is a more liquid investment that’s easier to assign a price to. But that is changing as we speak.
In fact, this year, the world’s second regulator-approved, exchange-tradable diamond commodity will launch. It’s a sign of the growing demand for alternatives to cash as a store of wealth.
I’m not suggesting you just rush out to buy diamonds. There are many factors that contribute to a diamond’s value. You need to do your homework and maybe solicit professional assistance.
But you want to create a portfolio that can stand the test of time. Land, gold and fine art are among that.
Diamonds can be too.
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gfp: Thanks. I remain bullish. I haven't sold a share. But if they swing a partnership this thing is going to be off to the races.
\
Bigworld, Here's the latest with Acurx. This is only a summary from GuruFocus, but the full transcript is available, so I'll check it out and post it next. From this summary, it sounds like there is plenty of partnering interest out there ('robust'), so that's a very good sign. They had their end of Phase 2 meeting with the FDA, and the Phase 3s will be identical in size (450 patients each). Previously Luci said he would try to make the first Phase 3 somewhat smaller than the second Phase 3, to save time and money, but if they have a partner (which is looking more likely) then it won't matter. On the funding side, in Q1 they used the ATM to raise $4.4 mil, which represented 1.12 mil new shares.
I noticed the chart setup is now looking a lot more promising. It looks like a fairly convincing bottom is in, and it has formed a bullish quasi inverted head + shoulders. I don't have any shares, but the chart looks like it might be ready for a rebound. In the after hours today it was up over 3%, to 2.30, and the bullish chart setup might start to attract some attention. The near term target on the chart should first be 2.50 (late Mar high), and then the 200 MA (2.90). Luci said the first Phase 3 should start in Q4, and it sounds like a partnership is increasingly likely, so the stock is tempting.
>>> Acurx Pharmaceuticals Inc (ACXP) Q1 2024 Earnings Call Transcript Highlights: Key Financial and ...
GuruFocus Research
May 16, 2024
https://finance.yahoo.com/news/acurx-pharmaceuticals-inc-acxp-q1-070055271.html
Cash Position: $8.9 million as of March 31, 2024, up from $7.5 million as of December 31, 2023.
Net Loss: $4.4 million or $0.28 per diluted share for Q1 2024, compared to a net loss of $2.9 million or $0.25 per diluted share for Q1 2023.
Research and Development Expenses: $1.6 million for Q1 2024, up from $1 million for Q1 2023.
General and Administrative Expenses: $2.8 million for Q1 2024, up from $1.9 million for Q1 2023.
Shares Outstanding: 15,757,102 as of March 31, 2024.
ATM Financing: Sold an additional 1,121,793 shares with gross proceeds of approximately $4.4 million during Q1 2024.
Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Ibezapolstat showed superior efficacy in eradicating C. difficile compared to vancomycin in Phase IIb trials, with a 94% success rate versus 71% for vancomycin.
Ibezapolstat has demonstrated the ability to preserve and allow regrowth of key gut bacteria, potentially reducing the recurrence of C. diff infections.
Acurx Pharmaceuticals Inc (NASDAQ:ACXP) has successfully reached agreement with the FDA on key elements of the Phase III program, indicating readiness to proceed to the next phase of clinical trials.
The company has secured SME status in Europe, providing benefits such as fee reductions and support from the European Medicines Agency.
Acurx Pharmaceuticals Inc (NASDAQ:ACXP) has a robust financial position with an increase in cash from $7.5 million to $8.9 million and successful additional share sales generating $4.4 million.
Negative Points
The company reported an increased net loss of $4.4 million for Q1 2024, up from $2.9 million in the same period the previous year.
Research and development expenses increased significantly, from $1 million to $1.6 million, due to higher manufacturing-related costs.
General and administrative expenses also rose from $1.9 million to $2.8 million, driven by increases in professional fees and noncash share-based compensation.
Acurx Pharmaceuticals Inc (NASDAQ:ACXP) is still in the process of finalizing costs and timelines for Phase III trials, indicating potential uncertainties in future expenditures.
The company has not yet secured any commitments from potential partners for further development and commercialization of ibezapolstat, despite active discussions.
Q & A Highlights
Q: Bob, can you confirm the total number of subjects for the upcoming trial and clarify if the Phase IIb is considered one of the two pivotal studies required by the FDA? A: David P. Luci - Co-Founder, President, CEO, Corporate Secretary & Director, Acurx Pharmaceuticals, Inc. - The total number of subjects for each of the two Phase III registration trials is 450, making it 900 in total. The Phase IIb is not considered a registration trial due to its small size. The upcoming trials are necessary to build a satisfactory safety database for an NDA application.
Q: Could you provide any preliminary information on the costs and timelines for the upcoming trials? Also, are there any active discussions regarding strategic partnerships? A: David P. Luci - Co-Founder, President, CEO, Corporate Secretary & Director, Acurx Pharmaceuticals, Inc. - We are currently finalizing the costs and timelines. Discussions about partnerships are active, especially now that we have a clear pathway for a pivotal study. We are engaging in several discussions, but nothing is finalized yet.
Q: When do you anticipate starting the first of the two Phase III trials? A: David P. Luci - Co-Founder, President, CEO, Corporate Secretary & Director, Acurx Pharmaceuticals, Inc. - We aim to start enrollment in the fourth quarter of this year, contingent on adequate funding. The enrollment is expected to take 18 to 24 months.
Q: Has the company considered applying for a priority review voucher for this application? A: Robert J. DeLuccia - Co-Founder & Executive Chairman, Acurx Pharmaceuticals, Inc. - We already have priority review due to our FDA fast track status. However, we are open to exploring the possibility of a priority review voucher, which could be a significant source of funding.
Q: Can you discuss the partnership environment as you approach Phase III? A: David P. Luci - Co-Founder, President, CEO, Corporate Secretary & Director, Acurx Pharmaceuticals, Inc. - The environment is quite robust. We have a lot of interest from potential partners, and we are being judicious in our discussions to ensure we make the right deal without overly diluting our company.
Q: Is there an opportunity for any interim looks during the Phase III trials, and could you update us on the PASTEUR Act? A: David P. Luci - Co-Founder, President, CEO, Corporate Secretary & Director, Acurx Pharmaceuticals, Inc. - We do not plan to conduct interim looks as they require adding patients and do not provide significant insights. Regarding the PASTEUR Act, it is unlikely to pass this year, but we are monitoring potential funding opportunities for new classes of antibiotics through other government programs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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gfp: I'm over weighted in precious metals. I know that. But I have spread that around quite a bit. Physical metals. ETFs. Mining stocks. Base metal stocks like RIO. A far more likely event that could happen is that hundreds if not thousands of US Banks go under, and that the answer to that is going to be a program of mass "bail ins", where the depositors will see their deposits confiscated or "taxed" to shore up the capital of the banks. The legislation is already in place here in the US. And the trial run took place in Cyprus in 2013. The FDIC doesn't have enough cash to bail out even a small percentage of depositors in all the banks that might fail. If the FED were to print enough money to do the bailouts the US Dollar would collapse. And this isn't 1932. If the US Government tried to outlaw personal possession of gold and silver these days the run on shovels at Home Depot would be huge. I'd bury my metals before I'd turn them in to our corrupt government. Thousands of others would do the same. They can't jail all of us. Other than in their digital Dollar prison planet.
Bigworld, McAlvany's Vaulted business might be totally honest and competently run (maybe), but since gold is the main competitor to the increasingly shaky fiat dollar system, the Fedsters are likely go after these 'gold alternative' type businesses. Peter Schiff is also in this realm, and these are the guys the Feds will eventually need to bring down, like they recently did with the FTX crypto exchange. Since gold and crypto are the main competitors to the fiat dollar monopoly, the gloves will come off at some point. They banned gold ownership from 1934-1975, so the precedent is there. Once the CBDC comes in fully, all competing forms of money will become officially unusable.
On the other hand, it's possible the Fedsters will eventually be forced into some type of partial gold standard in order to re-establish confidence in the monetary system. Rickards says that no central banker wants to return to a gold standard, but at some point they may have to. And if the BRICS bring out their gold-linked competitor to the dollar, the US could be forced to return to a partial gold backing. But a gold backing will presumably be the last resort, and before that they will try to poison the well for gold by going after players like McAlvany and Schiff. Who knows, but best to not go overboard in any one investment.
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GFP: Last night I checked the futures, etc. Gold was up over 2%, silver was up 3.3%. Then this AM once the Comex opened they beat them both down to where they are both in negative territory. But every dip is a buying opportunity at this point. Gold and silver are going higher. Much higher. We will se $50 silver by the end of next year in my opinion. Gold should be at $3000 by then at a minimum. If oil prices remain stable then the miners should have nicely increased profit margins and the share prices of the miners should continue to rally.
GFP: McAlvany has been in business for over 50 years. I listen to the McAlvany Weekly Commentary religiously. They provide very valuable insights every week.. I trust the Vaulted program for what I want it for....a place to park excess cash rather than keep it in US Dollars. You can keep your funds in gold which is stored at the Canadian mint. Or you can keep it in silver which is stored in London. You pay 2% over spot. Much cheaper than buying coins. And I have monster boxes of Silver coins I bought years ago when prices were very cheap. And I have 24/7 access to my metal with Vaulted. Every financial instrument has risk. US Dollars in your mattress lose value every day. US Treasuries are backed by a government that is bankrupt, both financially and morally. Rickards thinks a devaluation of the Dollar is coming. If that does occur gold and silver will do quite well.. And I'm considering using McAlvany as our financial advisor at some point when I want to diversify. Right now I am very overweight in gold, silver, energy, base metals, gas pipelines, etc....hard assets. Once the next crash is coming to it's conclusion I am going to want to diversify into good dividend blue chips. Just not right now. I'm right where I need to be. What I have thought would happen is finally happening. Math is catching up to America.
Silver futures 32.34. At this rate it looks like it could run up to 35 before a consolidation (?) Impressive move to say the least.
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Bigworld, >> Vaulted <<
Beyond its reliance on the Canadian Royal Mint, the much bigger risk with Vaulted is that it is apparently owned by the 'McAlvany Financial Group' (see below). Putting a large amount of money with them seems extremely risky, compared to say T-bills, money market, bank, etc.
For exposure to precious metals, it would be a lot safer to just own some bullion directly, supplemented by mining stocks, ETFs like GDX, etc. Vaulted also has a mark up of '1.8% for transactions and a 0.4% biannual maintenance fee'. But the biggest problem is relying on the solvency and honesty of the 'McAlvany Financial Group'. The main rationale for owning gold / silver is to avoid the risks of paper / fiat money, but Vaulted carries even bigger risks.
Also, trusting the Canadian government's mint is also a red flag. This is the same Canadian govt that froze the bank accounts of those truckers a few years back, along with anyone who supported the truckers. So the Canadian govt is run by even bigger thugs / crooks than here in the US.
>>> Who owns Vaulted?
Vaulted is operated by International Collectors Associates LLC (ICA), a company founded in 1972.
ICA and their owners, the McAlvany Financial Group, created Vaulted to provide a low-barrier path to investing in gold.
https://www.linkedin.com/pulse/vaulted-review-yusuke-kohara-444mc
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Financial Intelligence Report
The Newsletter for people willing to take control of their financial future
**********************************************************************************
Greetings Friends!
This is today's issue of the Financial Intelligence Report
Contributing Editors: Bob Rinear, Ted, Chuck and the Crew!
Wall Street Lunacy donated by Jerome Powell, and Central Bankers the world over! Who else can print money and buy stocks?!
*******************************************************************************************
Part 1: General Commentary
Part 2: Market Commentary
DOW 40K
So, it happened. The most widely watched stock index on earth, briefly stood at over 40,000 this week.Bravo, right? Well, maybe not so much.
The stock market is a dichotomy of logic. One would think that it should hit record highs while the economy is buzzing along, productivity is high, the velocity of money is rising, wages are stable and rising, prices are stable and overall things are great. Cars are selling, homes are selling, people are paying off their loans, often early and it's good times for all.
But alas, that''s not the case at all. The market is more times than not, completely upside down. Consider this... if company A is really doing well, and they hire a bunch of people because they're expanding, the market will often punish them for that, suggesting that extra wages will ding their profitability. On the other hand, a company that's already struggling, doesn't have such great earnings, but announces that they're cutting 15K jobs, is often rewarded with a much higher share price.
Yes you can understand the argument, but doesn't it seem back wards? Indeed it does, and it truly is. However that's the game.
In fact for the last 30 years, the market has had nothing to do with the economy. It runs on fed money. It runs on buy backs. It runs on debt and the more of it, the more it runs.
Why are they all so desperate for rate cuts? Simple, so they can take on more cheap debt. Our country's entire monetary system is debt based and the more they can get at cheaper rates, the more they can party. And of course the central banks understand this and they conjure up debt out of thin air all the time.
China it's said, is "dumping" treasuries. They aren't stupid, they saw what the US did to Russian assets because of the war, and they've decided that shedding US dollars/debt is a pretty wise move. But it begs the question...who's buying it?? China can't be selling treasuries to "no one" so who is it? You all know, it's the fed.
Now, I've said for two decades that the fed has its own second set of books. One set is the garbage fakery they show us, and the other is hidden from the public. Look at the ten year recently. The yield dropped like the proverbial rock recently, from well over 4.57 to 4.42. How does the ten year rate fall? When the bonds themselves are being bought. So again, who was this mystical buyer that dropped those rates so fast and so far? Mom and Pop? The guy on the corner with his etrade account? Don't be silly.
The only "folks" with the resources to buy up all that Chinese selling and buy up all those ten year notes is the central banks. Is all that accounted for on their balance sheets???
We've just hit 40K, so if the market is usually backwards about things, then the economy is probably in trouble right? Yep, it is.
Nearly 9% of the $1.12 trillion in credit card debt transitioned to "delinquency" status in Q1 2024. That's $100 BILLION of credit card debt that is now considered to be delinquent. Also, 8% of the $1.62 trillion of auto-loans transitioned to "delinquency" status in Q1 2024. That's $130 BILLION of auto loans that are now considered to be delinquent.
This is by far the largest increase seen in delinquency rates since the 2008 financial crisis. Most of this credit debt has record high rates of 25%.
But then enter "Buy Now Pay Later" spending. First off what is it? Well, ya know when you go to a retail site to buy an item, if it's expensive there's often a button that says Buy now, pay in four easy installments of "blank" dollars? Well NONE of that is included in the official reports of consumer debt. They say it is expected to hit a record $80 billion in 2024. We also don't know the default rate on such things, but some of that would be reflected in the credit card defaults. That said, the buy now, pay in installments is popping up all over and no one really knows how big it is. 80 billion could be way light.
On Friday, the leading economic indicators were released. Guess what? They fell. Now here's the juicy part, right from the conference board itself:
Deterioration in consumers outlook on business conditions, weaker new orders, a negative yield spread, and a drop in new building permits fueled April's decline. In addition, stock prices contributed negatively for the first time since October of last year. While the LEI's six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead. Indeed, elevated inflation, high interest rates, rising household debt, and depleted pandemic savings are all expected to continue weighing on the US economy in 2024. As a result, we project that real GDP growth will slow to under 1 percent over the Q2 to Q3 2024 period.
So get this... the LEI ( leading economic indicators) were down for TWO entire years, went positive in February for ONE month and have been down since. Tell me again Mr. TV man how great the economy is?
Surely housing's doing okay, right? Not according to the building permits. Privately owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,440,000. This is 3.0 percent below the revised March rate of 1,485,000 and is 2.0 percent below the April 2023 rate of 1,470,000. Single family authorizations in April were at a rate of 976,000; this is 0.8 percent below the revised March figure of 984,000.
They fudged the CPI number to come out, up just 0.3%. Everyone cheered and it caused a monster run in stocks. But of course you and I know inflation is much much higher than that, and the thing no one seems to understand is that these numbers are the "rate" of change of inflation. Inflation itself is roaring but it's roaring slower than feared. Gettin' all that?
To summarize, we're trillions in the hole. Word is that the cost to service all that debt will hit 1.6 trillion by September. Most of the BRICS nations hate us for bullying everyone for 50 years, and they're desperately trying to get rid of their dollars. Those dollars will come here as more inflation. Housing's in trouble, inflations still soaring, 200 banks have been said to be "in trouble." Citizens are up to their eyeballs in credit card debt and defaults and delinquencies are at nosebleed levels. The LEI's are negative again, the outlook is ugly, consumer confidence is falling.
And all that adds up to a 40,000 DOW? Imagine what things will look like at 50. Buy more gold and silver friends. Just might need it.
A glimpse at the potential future if a centralized digital currency and digital ID system are imposed on us.
https://threadreaderapp.com/thread/1791106077167169636.html
gfp: If Trump devalues that has to be good for gold and silver and other hard assets.
gfp: I've been using free cash to add to our Vaulted account. I'm keeping $10K in our checking account for a cushion and everything else is now going into Vaulted. Highly liquid. You pay only 2% over spot. And no storage issues. You pay 0.6% storage fee. The gold or silver is held in the Royal Canadian Mint. I have my fears about Canada, but once Fidel Castro's bastard son is out Canadians might come to their senses and return to being a non-totalitarian country.
gfp: I'm surprised the global WEF/Deep State hasn't taken out Orban. He's the bigger thorn in the side of the EU and NATO. Urban is probably my favorite foreign leader. And Javier Milei of Argentina is off to a strong start. And I really like that Wilders is taking over in the Netherlands, looking to stop the migration invasion and the war on farmers.
Rickards - >>> Trump’s Secret Plan to End Currency Wars
BY JAMES RICKARDS
MAY 14, 2024
https://dailyreckoning.com/trumps-secret-plan-to-end-currency-wars/
Trump’s Secret Plan to End Currency Wars
There has been a lot reported in recent days about the return of currency wars. This story arises in the context of a likely Trump election victory in the November presidential elections.
Trump badly bungled his transition after first being elected president in 2016. He wasn’t ready with a long list of loyal appointees.
Many of his senior appointments such as Rex Tillerson as secretary of state, James Mattis as secretary of defense and John Kelly as chief of staff secretly disliked Trump but accepted their roles as so-called “adult supervision” around the supposedly reckless Trump.
They thwarted his agenda. That backstabbing came on top of the large number of Obama holdovers in the deep state who saw themselves as a “resistance” movement.
Trump is doing a better job of preparing for a second term as president, but the resistance isn’t sitting still either. They’re moving to disable a new Trump administration even before the election.
The currency wars stories are part of that effort.
Trump Wants to Devalue the Dollar
As reported by The Washington Post, Politico, The Wall Street Journal, Yahoo Finance and other outlets, Trump’s working on a secret plan to devalue the U.S. dollar. The goal would be to cheapen U.S. exports and thereby help the U.S. balance of trade and create exported-related jobs.
But the critics say this will only increase U.S. inflation as Americans have to pay more for their imported goods using cheaper dollars. The critics also say that other countries will retaliate against the U.S. by cheapening their own currencies (that’s the essence of a currency war) and no country will be any further ahead.
In fact, the entire world will be worse off.
Before looking more closely at what’s actually going on, some basics about a currency war should be explained. The first rule is that the world is not always in a currency war.
The periods from 1944–1971 (the original Bretton Woods era) and 1987–2010 (the period of the Washington Consensus) were times of currency peace. This contrasts with 1921–1936 (Currency War I), 1967–1987 (Currency War II) and the current period since 2010 (Currency War III).
The second rule is that currency wars can last for 15 years or longer. It comes as no surprise that the currency war that commenced in 2010 is still going strong 14 years later in 2024. And that points to another key aspect of this debate.
The currency war being written about today by the media is not a new currency war. It’s the same one that has been going on since 2010. We’re simply in a new phase or a new battle.
Retaliation Is Inevitable
It is true that cheapening your currency can import inflation. Sometimes that’s a legitimate policy goal if your country has been suffering from excessive deflation (gradual, moderate consumer price deflation caused by greater market efficiency and competition is economically beneficial).
That’s obviously not the case in the U.S. today.
It’s also true that cheapening your currency can export deflation as trading partners pay less for your goods. That’s what China was doing to the entire world from 1994–2010 and that’s why the U.S. launched a currency war in 2010 — to fight back against disinflation and borderline deflation caused by cheap Chinese goods.
Currency wars can also shift jobs overseas and destroy domestic manufacturing as the terms of trade shift based on changing currency values. Retaliation is always waiting right around the corner in any currency war. The U.S. dollar hit an all-time low in August 2011, which was consistent with the U.S. goal of trying to import inflation.
But Europe struck back, and the EUR/USD cross-rate crashed from $1.60 to $1.04 as a result. So it is correct that no one wins a currency war, and everyone is damaged in the process due to volatility, uncertainty and the costs of conducting the war.
Trump’s Plan: Currency Peace
So are the critics right that Trump has a secret plan to devalue the dollar? And are they right that this new stage in the currency war will bring inflation and hurt the U.S. economy?
The critics are wrong and don’t understand what Trump’s actually trying to do. Trump isn’t trying to start a currency war; he’s trying to end it once and for all.
In the first place, no president has the power to unilaterally devalue the dollar. That might have been possible under the gold standard or some standard of fixed exchange rates, but that hasn’t been the state of the world since 1973.
Exchange rates fluctuate based on a number of factors including interest rates, industrial growth, exchange controls, central bank interventions, capital flows, tax rates and many other macroeconomic variables. But the idea that the president can just wave his hand and devalue the dollar is false.
Far from the reckless, inflationary process the media claim, Trump’s actual plan is based on the highly successful model developed by James Baker for Ronald Reagan and implemented in the Plaza Accord of 1985 and the Louvre Accord of 1987.
Currency Peace Leads to Prosperity
After the severe economic recession of 1982 and Paul Volcker’s policy of moving interest rates to 20%, inflation in the U.S. was finally reigned in. Inflation dropped from 13.5% in 1980 to 6.1% in 1982 and then 3.2% in 1983.
Investment in the U.S. went on a tear. U.S. real growth was 16% from 1983–1986. Everyone wanted dollars to invest in the U.S. and the dollar boomed reaching an all-time high in 1985.
Finally, the Reagan administration decided the U.S. dollar was too strong and was hurting U.S. exports and jobs. Treasury Secretary James Baker convened a meeting of the finance ministers of France, Germany, Japan, the U.K. and the U.S. at the Plaza Hotel in New York City.
The purpose was not to fight a currency war. The purpose was to create order in currency markets out of the chaos that had prevailed since 1973.
The parties reached a joint agreement that would devalue the U.S. dollar in an orderly fashion versus the French franc, Japanese yen, U.K. pounds sterling and the German Deutsche Mark.
Once the targeted level for the dollar was achieved, the parties would use their best efforts including market intervention as needed to maintain those levels within narrow bands.
A separate meeting in Paris at the Louvre in 1987 agreed that the devaluation phase was over and the dollar would be maintained at the new parities. This was not currency war; it was currency peace achieved by agreement and implemented in a cooperative fashion.
Plaza Accord II
The Louvre Accord (this time including the U.S., the U.K., France, Germany, Japan and Canada) ushered in a period of global prosperity that lasted 20 years until the Global Financial Crisis of 2008.
Trump’s goal is to repeat the success of the Plaza and Louvre accords. Trump’s adviser on this is Robert Lighthizer, who is one of the most brilliant financial minds around and was Trump’s U.S. trade representative (2017–2021).
Lighthizer was also USTR for Ronald Reagan from 1983–1985 so he’s a veteran of prior currency wars and was in the administration around the time the Plaza Accord was being developed. Lighthizer is the perfect individual to help Trump achieve the kind of success that Reagan and Baker had in the 1980s.
The media are trying to portray Trump as reckless when he’s proposing something highly beneficial for U.S. jobs and U.S. industry. Don’t be fooled by false claims of new currency wars.
Trump’s plan could actually achieve a new era of currency stability and lasting prosperity.
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Rickards - >>> $27,000 Gold
BY JAMES RICKARDS
MAY 13, 2024
https://dailyreckoning.com/27000-gold/
$27,000 Gold
I’ve previously said that gold could reach $15,000 by 2026. Today, I’m updating that forecast.
My latest forecast is that gold may actually exceed $27,000.
I don’t say that to get attention or to shock people. It’s not a guess; it’s the result of rigorous analysis.
Of course, there’s no guarantee it’ll happen. But this forecast is based on the best available tools and models that have proved accurate in many other contexts.
Here’s how I reached that price level forecast…
This analysis begins with a simple question: What’s the implied non-deflationary price of gold under a new gold standard?
No central banker in the world wants a gold standard. Why would they? Right now, they control the machinery of global currencies (also called fiat money).
They have no interest in a form of money they can’t control. It took about 60 years from 1914–1974 to drive gold out of the monetary system. No central banker wants to let it back in.
Still, what if they have no choice? What if confidence in command currencies collapses due to some combination of excessive money creation, competition from Bitcoin, extreme levels of dollar debt, a new financial crisis, war or natural disaster?
In that case, central bankers may return to gold not because they want to, but because they must in order to restore order to the global monetary system.
What’s the Proper Gold Price?
That scenario begs the question: What is the new dollar price of gold in a system in which dollars are freely exchangeable for gold at a fixed price?
If the dollar price is too high, investors will sell gold for dollars and spend freely. Central banks will have to increase the money supply to maintain equilibrium. That’s an inflationary result.
If the dollar price is too low, investors will line up to redeem dollars for gold and then hoard the gold. Central banks will have to reduce the money supply to maintain equilibrium. That reduces velocity and is deflationary.
Something like the latter case happened in the U.K. in 1925 when it returned to a gold standard at an unrealistically low price. The result was that the U.K. entered the Great Depression several years ahead of other developed economies.
Something like the former case happened in the U.S. in 1933, when FDR devalued the dollar against gold. Citizens weren’t allowed to own gold, so there was no mass redemption of gold. But other commodity prices rose sharply.
That was the point of the devaluation. Resulting inflation helped lift the U.S. out of deflation and gave the economy a boost from 1933–1936 in the midst of the Great Depression. (The Fed caused another severe recession in 1937–1938 with their customary incompetence.)
The policy goal obviously is to get the price “just right” by maintaining the proper equilibrium between gold and dollars. The U.S. is in an ideal position to do this by selling gold from U.S. Treasury reserves, about 8,100 metric tonnes (261.5 million troy ounces), or buying gold in the open market using freshly printed Fed money.
The goal would be to maintain the dollar price of gold in a narrow range around the fixed price.
What price is just right? This question is easy to answer, subject to a few assumptions.
$27,533 Gold
U.S. M1 money supply is $17.9 trillion. (I use M1, which is a good proxy for everyday money).
What is M1? This is the supply that is the most liquid and money that is the easiest to turn into cash.
It contains actual cash (bills and coins), bank reserves (what’s actually kept in the vaults) and demand deposits (money in your checking account that can be turned into cash easily).
One needs to make an assumption about the percentage of gold backing for the money supply needed to maintain confidence. I assume 40% coverage with gold. (This was the legal requirement for the Fed from 1913–1946. Later it was 25%, then zero today).
Applying the 40% ratio to the $17.9 trillion money supply means that $7.2 trillion of gold is required.
Applying the $7.2 trillion valuation to 261.5 million troy ounces yields a gold price of $27,533 per ounce.
That’s the implied non-deflationary equilibrium price of gold in a new global gold standard. Of course, money supplies fluctuate; lately they’ve been going up sharply, especially in the U.S.
There’s room for debate about whether a 40% backing ratio is too high or too low. Still, my assumptions are moderate based on monetary economics and history. A dollar price of gold of over $25,000 per ounce in a new gold standard is not a stretch.
Obviously, you get around $12,500 per ounce if you assume 20% coverage. There are many variables in play.
The Fundamental Model
This model is also straightforward. It relies on factors we learned about in our first week of Intro to Economics — supply and demand.
The most significant development on the supply side is the decrease of new mining output. As the chart shows below, mine production of gold in the U.S. has been decreasing steadily since 2017.
image 1
These figures reveal a 28% decrease over seven years, at the same time gold prices were rising and miners were motivated to expand output.
That’s not to argue that the world has reached “peak gold,” (output could expand in future for a variety of reasons). Still, my contacts in the mining community consistently report that gold is becoming more difficult to source and the quality of newly discovered ore is low-to-medium at best.
Flat output, all things equal, tends to put a floor under prices and to support higher prices based on other factors.
The Demand Side
The demand side is driven largely by central banks, ETFs, hedge funds and individual purchases. Traditional institutional investors are not large investors in gold. Much of the demand from hedge funds is conducted in derivatives such as gold futures.
Derivatives generally don’t involve physical delivery of gold. They involve “paper gold” that far exceeds the actual, physical gold supply. It’s this paper gold market that accounts for volatility in the gold market, not gold itself.
Meanwhile, central bank demand for gold has surged from less than 100 metric tonnes in 2010 to 1,100 metric tonnes in 2022, a 1,000% increase in 12 years. Central bank gold demand remained strong in 2023 with 800 metric tonnes acquired through Sept. 30.
That puts central bank gold demand on track for a new record. There’s no sign of that demand slowing in 2024.
Overall, the picture is one of flat supply and increasing demand, mostly in the form of official purchases by central banks.
A Math Lesson
Finally, a bit of elementary math is helpful in understanding how the dollar price of gold can move past $25,000 per ounce in the next two years. For this purpose, we’ll assume a baseline price of $2,000 per ounce (although gold has been in the $2,300 range lately with no signs of falling back to the $2,000 level).
But for our purposes, we’ll keep it simple.
A move from $2,000 per ounce to $3,000 per ounce is a heavy lift. That’s a 50% increase and could easily take a year or more. Beyond that, a further increase from $3,000 to $4,000 is a 33% increase: another large rally. A further gain from $4,000 per ounce to $5,000 per ounce is a further gain of 25%.
But notice the pattern. Each gain is $1,000 per ounce, but the percentage increase drops from 50% to 33% to 25%. That’s because the starting point is higher while the $1,000 gain is constant. Each $1,000 jump represents a smaller (and easier) percentage gain than the one before.
This pattern continues. Moving from $9,000 per ounce to $10,000 per ounce is only an 11% gain. Moving from $14,000 per ounce to $15,000 per ounce is only a 7% gain. Gold can move 1% in a single trading day, sometimes 2% or more.
As an extreme example, a move from $99,000 per ounce to $100,000 per ounce is about a 1% move. Those $1,000 pops get even easier as we approach my calculated gold price of $27,533.
The lesson for you as an investor is to buy gold now.
As prices continue to rally, you’ll get more gold for your money at the outset and high-percentage returns as gold rallies from a lower base. Toward the end of the long march past $25,000 per ounce, you’ll have bigger dollar gains because you started with more gold.
Others will jump on the bandwagon, but you’ll already have a comfortable seat.
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Bigworld, Thanks for the latest Kunstler article. He mentioned the recent assassination attempt on the Slovakian Prime Minister (Robert Fico). But it sounds like Fico's refusal to help Ukraine / Zelensky with their war could be a more likely motive for the shooting (rather than Fico's opposition to the new WHO Treaty, as Kunstler suggested). Fico has also vowed to block Ukraine from joining NATO, and has called journalists "Soros' corrupt gang of swines". He also called the EU hypocrites for ignoring the mass slaughter of civilians in Gaza. So not too surprising that they would remove Fico.
https://en.wikipedia.org/wiki/Robert_Fico
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gfp; All of my hard asset plays are looking up these days. The miners of gold, silver and copper. My uranium plays. Energy. Pipelines. I bought RIO a few years ago in the low $60s. I collected that nice dividend while I waited for the share price to climb. I'm holding, even though I think copper has a pull back coming. With Buffet sitting on his largest cash accumulation ever, and hedgies filing that they sold a lot of their high flying tech stocks, I figure general equities are not going to be the place to be. If the US wasn't deficit spending $10 Billion a day the stock market would already be much lower.
gfp: I'm very busy at work. But from a glance at my portfolio I'm having a pretty good week. The silver miners are doing well. My two largest individual silver mining stocks, Hecla (HL) and Coeur (CDE) are both up almost 12% today. So I have to figure a manufactured attack on silver is imminent. The bullion banks can;t have silver rise too much. They have to get silver spot down below $30 again.
Bigworld, The nuclear related sector is looking strong -- CCJ, URA, URNM, NLR. And nuclear related utilities have been going bonkers for some time - CEG, VST.
Silver blasted through 30, and the momentum might just be getting started (?) I'm thinking it moves up to maybe 33, then consolidates to establish 30 as the new 'floor', and then resumes the upward climb, along with gold. Just a guess though.
The staggering US deficits / debt bomb, global de-dollarization of trade, increased central bank buying of gold, teetering Petrodollar system, and plans for the new gold-linked BRICS currency, etc ---> these all have countries increasingly nervous about the US dollar reserve system. Rickards points out that the US / European plan to steal Russia's $300 bil in foreign reserves will only hasten the global flight out of the US dollar. But the way things are going, the luminaries (idiots) running US and European policy may precipitate WW 3 first.
“Whom the Gods would destroy they first make mad.”
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Bigworld, With the stock market, the RSI for the S+P 500 hit 70 today (overbought), so I took some profits in the trading position. It may be early, but I figure it's better to lock in the gains rather than risk seeing them evaporate. The 5% in the money market is an attractive alternative, so I may just stay in 'opportunistic' mode for the rest of the year, or until things becomes clearer, ie with the Fed % timeline, inflation, economy, etc.
Using the RSI indicator to trade, you can generally do well by buying when it falls to 30, and selling when it reaches 70. But if a longer term trend develops, either up or down, you end up selling too early / buying too early. So ideally it's best to just hold for the long haul (years), and just ride out the inevitable volatility. But easier said than done in periods when risks / uncertainties are so high. The biggest angst inducer (imo) is to watch solid profits evaporate, so the tendency is to grab them as they build up.
Btw, I see on May 28 they are changing the brokerage rules for trade settlement, from 2 days to only 1 day, so I wonder if this will tend to encourage more short term stock trading (?) The meme stock speculation appears to be back, and easier short term trading (1 day settlement) may mean more market volatility.
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gfp: Silver (and gold) have been in an upward move for a while. But it's always 10% up, then 7% down, then up, then down, then up, then down. he bullion banks always monkey hammer the metals when they get too far out over their skis. One of these days though they are going to go parabolic when the US Dollar loses all remaining credibility. By year end at least 25% of all tax receipts at the Federal level will go to pay interest on our gargantuan debt. We can;t pay off the principal, and pretty soon they will have to print money just to pay interest. WW3 should take care of all of that, if the elites can sucker enough young people into participating. I will be strongly encouraging my younger relatives to avoid conscription at all costs, even if they have to leave the country. This corrupt excuse for a country doesn't deserve the sacrifice of it's young people once again in a manufactured war.
gfp: Silver has been outperforming gold lately. There is a supply issue with silver, and it's needed in lots of applications....medicine, solar panels, other electrification needs, etc. Mining is not keeping up with demand.
gfp; Rinear thinks the market can continue to stair step upward despite the true underlying fundamentals. The Wall Street cheerleaders and the government lies can keep it buoyant, as well as the continued deficit spending. Despite sales and earnings warnings from McDolanld's, major retailers, Under Armour today.....sales are trending down. Prices are too high for the average consumer. EVs are piling up so fast they are having to store them temporarily in mall parking lots. I'll stay allocated to real assets.
gfp: Thanks. Surgery is still set for June 19th. I over used my knee last week and I'm paying the price. I can't bear weight on the leg at all right now. In certain positions its quite painful. And I can no longer straighten it completely. I can go from about 95 dress to about 25 degrees. Not good.
gfp: New Zealand is a political minefield. Despite Jacinta Adhern being off to Harvard there is a deep liberal core at the heart of it's government. I'd feel safer politically in Argentina these days.
Wow, silver hit 29.99, so it could be the fun is just beginning. A lot of momentum building, and I'm thinking a blast up to 33 - 35 might be in the cards for the nearer term (?) Then a consolidation that establishes 30 as the new 'floor'. Just a guess, but that would replicate what gold has already done.
With silver, there is an incentive for the globalist ghouls to keep the price down, since silver represents a significant input cost for solar panels. But for now it looks like the market forces are in the driver's seat :o)
The surge in the old meme stocks this week suggests a return to 'risk on' investing could be underway, at least for a while. The main 3 stock indices all put in new highs today. RSIs for the S+P 500, DJIA, and Nasdaq are currently - 69, 69, 67, so closing in on the 70 overbought level. But I figure with luck the current momentum continues into next week, barring any news flow that derails the party.
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>>> How likely is another Carrington Event?
Earth Sky
by Deborah Byrd
January 30, 2020
https://earthsky.org/space/how-likely-space-super-storms-solar-flares-carrington-event/
Solar flares are brief eruptions of intense high-energy radiation from the sun’s surface. They’re associated with sunspots, coronal mass ejections or CMEs, and other signs of high activity on the sun, during its 11-year cycle. A big solar flare can result in charged particles hurled toward Earth that cause disturbances to modern life, for example, in satellite communications and power line transmissions.
A new joint study by the University of Warwick and the British Antarctic Survey used historical data to extend scientists’ previous estimates of the likelihood of space super-storms. These storms may originate with solar flares, seen to erupt explosively on the sun during years of high solar activity. Space super-storms aren’t harmful to humans, because our atmosphere protects us, but they can be hugely disruptive to our modern technologies. They can cause power blackouts, take out satellites, disrupt aviation and cause temporary loss of GPS signals and radio communications, scientists say. The new work shows that what the scientists called “severe” space super-storms occurred 42 years out of the last 150 years. What they called “great” super-storms occurred in 6 years out of 150. The new work also sheds light on what’s called the Carrington event of 1859, the largest super-storm in recorded history.
The new work is based on an analysis of magnetic field records at opposite ends of the Earth (U.K. and Australia). It was published January 22, 2020 in Geophysical Research Letters. A statement from the University of Warwick on January 29, 2020, explained:
This result was made possible by a new way of analyzing historical data … from the last 14 solar cycles, way before the space age began in 1957, instead of the last five solar cycles currently used.
The study doesn’t mean that there is one “great” space super-storm exactly every 25 years. Instead, it tells you the likelihood of a powerful storm occurring any given year. As the new paper’s summary pointed out:
We find that on average there is a 4% chance of at least one … severe storm per year, and a 0.7% chance of a Carrington class storm per year …
That’s a relatively high estimate, higher than was previously thought. Lead author Sandra Chapman of the University of Warwick commented:
These super-storms are rare events but estimating their chance of occurrence is an important part of planning the level of mitigation needed to protect critical national infrastructure.
The Carrington storm of 1859 – often called the Carrington event – is the biggest space super-storm we know about. It’s the one everyone talks about when speaking of the potential threat from these storms. It happened 161 years ago and so fell outside the date range of this study; however, the new analysis does estimate what amplitude it would need to have been to be in the same class as the other super-storms that were included the study. For purposes of this study, the Carrington storm is considered a “great” storm.
A more recent example of a space super-storm – in this case a “severe” storm as defined by this study – would be the one of March 1989. It caused a nine-hour outage of Hydro-Québec’s electricity transmission system.
In 2012, the Earth narrowly avoided trouble when a coronal mass ejection – a powerful eruption near the sun’s surface that often goes hand-in-hand with solar flares – traveled across space from the sun, barely missing the Earth. According to satellite measurements, if it had hit the Earth, it would have caused a super-storm.
Richard Horne, who leads Space Weather at the British Antarctic Survey and who was a co-author on this study, commented:
Our research shows that a super-storm can happen more often than we thought. Don’t be misled by the stats, it can happen any time, we simply don’t know when and right now we can’t predict when.
Here’s more from the scientists’ statement about space super-storms:
Space weather is driven by activity from the sun. Smaller scale storms are common, but occasionally larger storms occur that can have a significant impact.
One way to monitor this space weather is by observing changes in the magnetic field at the earth’s surface. High quality observations at multiple stations have been available since the beginning of the space age (1957). The sun has an approximately 11-year cycle of activity which varies in intensity and this data, which has been extensively studied, covers only five cycles of solar activity.
If we want a better estimate of the chance of occurrence of the largest space storms over many solar cycles, we need to go back further in time. The aa geomagnetic index is derived from two stations at opposite ends of the earth (in U.K. and Australia) to cancel out the Earth’s own background field. This goes back over 14 solar cycles or 150 years, but has poor resolution.
Using annual averages of the top few percent of the aa index the researchers found that a ‘severe’ super-storm occurred in 42 years out of 150 (28%), while a ‘great’ super-storm occurred in 6 years out of 150 (4%) or once in every 25 years.
Bottom line: Scientists used magnetic field data to extend estimates for the frequency of space super-storms back 150 years.
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Looks like the sun saved its biggest CME blast for last, but luckily it missed the Earth, at least this time. But the odds say that a Carrington size CME hitting the Earth is inevitable (see next article), and our total dependence upon microelectronics leaves us extremely vulnerable.
Current microelectronics are estimated to be 1 million times more sensitive to EMP / Electro Magnetic Pulse than older electrical systems. A Carrington size event today puts us back to the Stone Age, but even worse due to the meltdown of nuclear power plants as they lose their backup cooling pumps. Time to start hardening our national power grid against EMP folks -
>>> Sun shoots out biggest solar flare in nearly a decade, but Earth should be safe this time
Associated Press
by MARCIA DUNN
5-14-24
https://www.msn.com/en-us/news/us/sun-shoots-out-biggest-solar-flare-in-nearly-a-decade-but-earth-should-be-safe-this-time/ar-BB1moHXQ?cvid=d5fbbfc4634a46a6921ac0a213f61771&ei=22
CAPE CANAVERAL, Fla. (AP) — The sun produced its biggest flare in nearly a decade Tuesday, just days after severe solar storms pummeled Earth and created dazzling northern lights in unaccustomed places.
“Not done yet!” the National Oceanic and Atmospheric Administration announced in an update.
It's the biggest flare of this 11-year solar cycle, which is approaching its peak, according to NOAA. The good news is that Earth should be out of the line of fire this time because the flare erupted on a part of the sun moving away from Earth.
NASA's Solar Dynamics Observatory captured the bright flash of the X-ray flare. It was the strongest since 2005, rated on the scale for these flares as X8.7.
Bryan Brasher at NOAA's Space Weather Prediction Center in Boulder, Colorado said it may turn out to have been even stronger when scientists gather data from other sources.
It follows nearly a week of flares and mass ejections of coronal plasma that threatened to disrupt power and communications on Earth and in orbit.
NASA said the weekend geomagnetic storm caused one of its environmental satellites to rotate unexpectedly because of reduced altitude from the space weather, and go into a protective hibernation known as safe mode. And at the International Space Station, the seven astronauts were advised to stay in areas with strong radiation shielding. The crew was never in any danger, according to NASA.
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