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NGD (New Gold) is having a hell of a time. It's just been disclosed that roughly $100,000,000 is needed for current expenses and $195,000,000 to complete RR. Possibly nearing $400,000,000 to be realistic. Be careful out there, once the pumpers are done and the rubber hits the road, the combination of no cash, cost over runs and debt are killers no matter how good the assets may look.
It's interesting to note that last year on this very same "Chinese Lunar New Year" holiday week, gold rebounded and mirrored the rise we are seeing this week.
News Out! Teranga Gold Achieves Strong 2016 Operating Performance.
2016 Highlights
Achieved record high production of 216,735 gold ounces, surpassing guidance of 200,000-215,000 gold ounces
Achieved cost guidance as unit mining and processing costs hit record low
Total cash costs(1) are expected to be within the mid-point of our 2016 guidance range of $600-$650 per ounce
All-in sustaining costs(1) are expected to be within the mid-point of our 2016 guidance range of $900-$975 per ounce
Strengthened the Company's balance sheet with a cash position at year end of $95.2 million, compared to $44.4 million as at December 31, 2015
Completed the Gryphon Minerals acquisition and commenced the Banfora gold project feasibility study
Completed the Sabodala mill optimization - under budget and ahead of schedule
Advanced our exploration programs in Senegal, Burkina Faso and Côte d'Ivoire
Extended industry-leading health and safety record to more than 3 years without a lost time injury
Received awards for our corporate social responsibility program from the United Nations Global Compact Network Canada and from the Prospectors & Developers Association of Canada
2017 Outlook
The Company's outlook for 2017 is as follows:
Production: 205,000 to 225,000 gold ounces(2)
All-in sustaining costs (excluding non-cash inventory movements and amortized advanced royalty costs): $900 to $975 per ounce(1). All-in sustaining costs (including non-cash inventory movements and amortized advanced royalty costs): $1,000 to $1,075 per ounce(1).
http://www.terangagold.com/English/investors/news/newsreleasedetails/2017/Teranga-Gold-Achieves-Strong-2016-Operating-Performance/default.aspx
Those are looking good!
Ya know Edge, the Comex expired yesterday, the OTC/LBMA expires today. Next week Chinese markets are on holiday through Thursday. Last year on that Chinese holiday week, I don't know why but, Gold soared. We shall see...
Yeah, their coming out of the woodwork lately.
ignored.
Dollar still sinking well below Monday's close at 100.2, gold should easily be $1230+.
Even with all their shenanigans, they cannot hold it down much longer with this level of dollar weakness...its mathematically impossible, those are just the hard facts! Gold had hit $1220 on Monday evening just after open with the dollar @99.9, the dollar is currently @99.8.
Yep, another week long Chinese holiday! Maybe it will be different this time since gold has been in an uptrend, instead of a downtrend like last October's holiday week.
The DXY is at the same level as Monday's close 100.2 when gold was $1210, now gold is $1196? These manipulators are a bunch of pussy's, it's like they throw a tantrum when gold doesn't do what they want it to, so they just say "screw the correlation". They slam gold, the dollar reacts and then snaps right back to it's previous low but, does gold, NOOOO, it remains at it's low.
Yes JV, history tells us that higher rates are good for gold, not the other way around, just more propaganda to suit the manipulators.
The author of that article was simply pointing out, and I agree, that non-producers with no revenue and nothing but promises, as well as high AISC producers are much riskier than producers with low AISC, especially when boatloads of low AISC producers are currently on sale.
3 Gold Stocks That Could Suffer a Meltdown in 2017
Tread cautiously with these investments.
Sean Williams (TMFUltraLong) Dec 30, 2016 at 8:14AM
It was a great year for precious metal mining stocks...until it wasn't. After putting in the best quarterly gain in 30 years during Q1 2016, physical gold wound up giving back more than $200 per ounce since its election night high. Silver has delivered a similar story, falling some 25% since July. And caught in the middle of this wild swing are the precious-metal miners themselves.
The upcoming year has the potential to prove challenging to physical metals. To begin with, the consensus estimate from the Federal Reserve is that the central bank will boost interest rates three times (by 25 basis points each) in 2017. When the Fed raises rates, bank CDs and other interest-based asset yields move higher in accord. Assets like CDs and Treasury bonds provide near-guaranteed returns, albeit they have nominally low yields at the moment. As rates rise, these interest-bearing assets become more attractive and could easily sway investors out of gold and/or silver, which have no dividend.
There's also the prospect of what President-elect Donald Trump's policies could bring to the table. The possibility of cutting individual and corporate income tax rates, providing a corporate tax repatriation holiday, spending $1 trillion on infrastructure over the next decade, and deregulating the energy and banking sectors -- Wall Street sees all of it as a sign that inflation and growth could pick up. Since gold and silver generally rely on uncertainty, among other factors, to drive their price higher, a stronger-than-expected U.S. economy wouldn't be great news.
Three at-risk gold miners in 2017
Despite these challenges, there are gold stocks that are well-positioned to succeed. But on the other end of the spectrum are a group of gold miners that appear closer to a meltdown than success in 2017 -- especially if gold prices remain in a funk. Here are three gold miners that I'd strongly suggest avoiding in the upcoming year.
IAMGOLD
Generally speaking, IAMGOLD (NYSE:IAG) isn't a terrible company -- it's just in the wrong place at the wrong time with gold prices well off their highs.
On one hand, IAMGOLD's shareholders have a lot to be proud of given the company's performance in 2016. Shares are up about 150% year to date on the heels of another solid quarter of production growth. During the third quarter, IAMGOLD, which operates mines in Canada, Suriname, and Burkina Faso, reported 7% gold production growth and affirmed it would be near the high end of its full-year gold production target. Much of its success can be attributed to the rapidly growing Essakane mine in Burkina Faso.
But there's one big issue: all-in sustaining costs (AISC). Of the large gold miners ($1 billion market value and up), IAMGOLD has the highest AISC of them all. After narrowing its AISC during the third quarter, IAMGOLD is on track to produce its gold at $1,075 per ounce at the midpoint, providing less than a $70 margin buffer to gold's current spot price per ounce. It's not uncommon for gold-mining companies to struggle with higher costs in Africa due to higher labor expenses, or deal with unexpected production disruptions due to political instability. Even if Essakane continues to deliver double-digit growth, it may already be priced into IAMGOLD's 150% move higher in 2016. If there's so much as the slightest production hiccup at Essakane, IAMGOLD could quickly deflate.
Personally, it seems like a lot of risk for the prospect of a modest reward. I'd suggest staying on the sidelines in 2017 until IAMGOLD's AISC dips safely below $1,000 per ounce.
Northern Dynasty Minerals
Another gold stock that I'd strongly suggest keeping your distance from -- and which could arguably be the most dangerous precious-metal stock period -- is Northern Dynasty Minerals (NYSEMKT:NAK).
If you had bet against Northern Dynasty Minerals at the beginning of the year, you'd be crying under your pillow right about now. Shares of the company have rallied about 700% year to date, making this small cap one of the market's top performers in 2016. Higher gold prices for the year, along with strong momentum and a healthy helping of speculation, have likely pushed its share price into the stratosphere.
But there's one major issue with Northern Dynasty Minerals that its current investors are overlooking -- namely, that it doesn't even have a viable mine as of yet.
Nearly all of the company's valuation is tied to the future of the Pebble Project in Alaska. According to Northern Dynasty, the Pebble deposit contains measured and indicated resources of 70 million ounces of gold, 57 billion pounds of copper, 3.4 billion pounds of molybdenum, and 344 million ounces of silver. Yet, according to the company's third-quarter earnings report, "The Group's continuing operations and the underlying value and recoverability of the amounts shown for the Group's mineral property interests, is entirely dependent upon the existence of economically recoverable mineral reserves." In layman's terms, the company is still exploring Pebble to determine if there's an economically viable way to even recover some of these deposits. And, even if there is, Northern Dynasty has nowhere near enough capital to build out or develop a mine to make it happen.
This stock looks like pure fool's gold -- with a lowercase f -- and I would suggest keeping your distance.
Seabridge Gold
While I'm not purposely trying to pick on developmental-stage gold miners, Seabridge Gold (NYSE:SA) is another gold stock that could be vulnerable in 2017.
Like Northern Dynasty, Seabridge does have a cream-of-the-crop asset that could put it on the map. In Seabridge's case, it's the Kerr-Sulphurets-Mitchell (KSM) Project located in British Columbia. A preliminary feasibility study of the KSM Project estimated proven and probable reserves of 38.8 million ounces of gold and 10.2 billion pounds of copper. The good news is exploration has suggested that recovery would, in some cases, make economic sense.
The issue, though, is simple. Seabridge is still years and tens upon tens of millions of dollars away from developing KSM. While I would contend that KSM is in much better shape in terms of mining feasibility than the Pebble Project, Seabridge is a long ways away from commercial production. This would imply years of ongoing losses and essentially no way to curb its costs compared to its commercially producing peers which have levers they can pull. If gold were to struggle in 2017, Seabridge wouldn't be able to do much about it, and it would only further pressure a company whose valuation lies entirely with what's beneath the ground.
My suggestion would be to pick a healthfully profitable and producing gold miner instead of crossing your fingers and hoping for the best with developmental-stage miners like Seabridge Gold.
CBT4TNCN index?
Great article eik, It's all about correlations, they may disappear for awhile due to constant intervention but, they always come home to roost and this next one will be a doozy.
Dollar dropping like a lead zeppelin after hours, if not for the manipulators gold would already be at $1230 plus.
USD Dumps After Treasury Sec Nominee Mnuchin Warns Of "Excessively Strong" Dollar
Here we go, fake dollar rally unwinding, hopefully back to election night lows. + $1200 gold open, from this point out.
Tyler Durden's picture
by Tyler Durden
Jan 23, 2017 4:44 PM
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In Treasury Secretary nominee Steven Mnuchin's written responses to Senate questions, he made it clear that the "strong dollar" policy may not always be his priority as he noted "an excessively strong dollar may be negative in the short-term."
“The strength of the dollar has historically been tied to the strength of the U.S. economy and the faith that investors have in doing business in America,” Mnuchin said in written responses to questions from U.S. senators obtained by Bloomberg News.
“From time to time, an excessively strong dollar may have negative short-term implications on the economy.”
Additional headlines include:
*MNUCHIN REPLIES TO SENATE IN DOCUMENT OBTAINED BY BLOOMBERG
*MNUCHIN: TREASURY HAS RANGE OF TOOLS TO ADDRESS UNFAIR TRADE
*MNUCHIN: WILL ENSURE WEALTHY TAXPAYERS CAN'T GAME TAX SYSTEM
*MNUCHIN: WILL ADDRESS ISSUE OF CURRENCY MANIPULATION
*MNUCHIN: `EXCESSIVELY STRONG' USD MAY BE NEGATIVE IN SHORT TERM
*MNUCHIN: U.S. IMF FUNDS MUST BE USED IN LINE WITH POLICY GOALS
*MNUCHIN: WOULD ENFORCE EXISTING SANCTIONS AGAINST IRAN, RUSSIA
*MNUCHIN: WOULD CONSIDER ALL OPTIONS FOR INFRASTRUCTURE SPENDING
The reaction is clear in USDJPY...
The Dollar Index has dropped below 100 for the first time The ECB's December meeting...
Yeah, he "put the cuckoo back in the clock" so to speak.
Watch this road blocking snowflake get owned at the women's march, just hilarious!
https://m.facebook.com/story.php?story_fbid=360371451015711&id=322008624851994
They are desperately trying to hold gold under $1220. Based on last nights rise to $1219.90 and the concurrent dollar level, gold should be well above $1220 this morning with dollar at new lows for the day.
Geo, It's just noise.
Well, it's official, President Donald Trump, good riddance barry soetoro! If anything happens to President Trump now, they will have VP Mike Pence to deal with.
JD, your last two "Just Stuff" posts featured my first two favorite songs as an 11 year old kid in the late 60's "Fifth Dimension, Aquarius" and "Shocking Blue, Venus" in that order, wild!
Declassified CIA Memos Reveal Probes Into Gold Market Manipulation
http://www.zerohedge.com/news/2017-01-19/delcassified-cia-memos-reveal-probes-gold-market-manipulation
Excellent JD, thanks!
You Got It, They Just Can't Shut Their F***G Mouths.
They have to be laughing their pompous asses off all the way to the bank, while they yank the markets back and forth with meaningless words, all the while inside trading (yes that's right, it is legal for congress to inside trade) making millions upon millions on the swings.
Janet Yellen Explains "The Goals Of Monetary Policy"... Seriously - Live Feed
Tyler Durden's picture
by Tyler Durden
Jan 18, 2017 2:57 PM
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Less than two days before Donald Trump is inaugurated as the 45th president of the United States, Fed chair Janet Yellen takes to the stage at the Commonwealth Club of San Francisco to explain (after all these years), what "the goals of monetary policy are... and how we pursue them." We can't wait to hear how increasing asset prices to untenable levels, depriving savers of income, and driving the largest wedge between rich and poor since the great depression have been part of the solution...
Headlins from her prepared remarks include:
*YELLEN: U.S. NEAR MAX EMPLOYMENT, INFLATION MOVING TOWARD GOAL
*YELLEN: FED CLOSE TO DUAL GOALS; CAN'T GIVE TIMING OF NEXT HIKE
*YELLEN: SHE AND MOST COLLEAGUES EXPECT `A FEW' RATE HIKES A YR
*YELLEN: NEXT RATE HIKE DEPENDS ON ECONOMY `OVER COMING MONTHS'
*YELLEN: MAKES SENSE TO GRADUALLY REDUCE MONETARY POLICY SUPPORT
*YELLEN SAYS SHE'S HEARING FROM BORROWERS WHO WANT LOWER RATES
*YELLEN SAYS U.S. WAGE GROWTH REMAINS FAIRLY LOW
*YELLEN: WANT TO ENSURE ECONOMY STRONG ENOUGH TO ABSORB SHOCKS
Live Feed (Yellen due to speak at 1500ET)...
Full speech here:
Good afternoon. It is a pleasure to join all of you at the Commonwealth Club for lunch today, not the least because the club and the Federal Reserve have a few things in common. Both organizations, as it happens, have a board of governors and a chair. And both the club's and the Fed's histories extend back more than a century. The club, as many here know, was founded in 1903, and the Federal Reserve a decade later. Perhaps because of our shared origins in the Progressive Era, a period of reform in American life, we hold certain values in common. According to your website, the club is nonpartisan and dedicated to the impartial discussion of issues important to your community and the nation. At the Fed, we too are nonpartisan and focused squarely on the public interest. We strive to conduct our deliberations impartially and base our decisions on factual evidence and objective analysis. This afternoon I will discuss some challenges we've faced in our recent deliberations and may face in the next few years.
Perhaps, though, it is best to start by stepping back and asking, what is--and, importantly, what isn't--our job as the nation's central bank? And how do we go about trying to accomplish it? The Federal Reserve has an array of responsibilities. I'll mention our principal duties and then focus on one--monetary policy, the responsibility that gets the most public attention.
In addition to monetary policy, we--in collaboration with other regulatory agencies at both the federal and state levels--oversee banks and some other financial institutions to ensure they operate safely and soundly and treat their customers fairly. We monitor the financial system as a whole and promote its stability to help avoid financial crises that could choke off credit to consumers and businesses. We also reliably and safely process trillions of dollars of payments for the nation's banks and the federal government and ensure that banks have an ample supply of currency and coin to meet the demands of their depositors. And we work with communities, nonprofit organizations, lenders, educators, and others to encourage financial and economic literacy, promote equal access to credit, and advance economic and community development.
But, as I noted, monetary policy draws the most headlines. What is monetary policy, exactly? Simply put, it consists of central bank actions aimed at influencing interest rates and financial conditions more generally. Its purpose is to help foster a healthy economy. But monetary policy cannot, by itself, create a healthy economy. It cannot, for instance, educate young people, generate technological breakthroughs, make workers and businesses more productive, or address the root causes of inequality. Fundamentally, the energy, ingenuity, and know-how of American workers and entrepreneurs, along with our natural resources, create prosperity. Regulatory policy and fiscal policy--the decisions by the Administration and the Congress about how much and how the government spends, taxes, and borrows--can influence these more fundamental economic pillars.
I've said what monetary policy cannot do. But what can it do? It can lean against damaging fluctuations in the economy. Nearly 40 years ago, the Congress set two main guideposts for that task--maximum employment and price stability. We refer to these assigned goals as our dual mandate. When the economy is weak and unemployment is on the rise, we encourage spending and investing by pushing short-term interest rates lower. As you may know, the interest rate that we target is the federal funds rate, the rate banks charge each other for overnight loans. Lowering short-term rates in turn puts downward pressure on longer-term interest rates, making credit more affordable--for families, for instance, to buy a house or for businesses to expand. Similarly, when the economy is threatening to push inflation too high down the road, we increase interest rates to keep the economy on a sustainable path and lean against its tendency to boom and then bust.
But what exactly do the terms "maximum employment" and "price stability" mean? Does maximum employment mean that every single person who wants a job has a job? No. There are always a certain number of people who are temporarily between jobs after having recently lost a job or having left one voluntarily to pursue better opportunities. Others may have just graduated and have started looking for a job or have decided to return to working--for instance, when their child starts school. This so-called frictional unemployment is evident even in the healthiest of economies.
Then there is structural unemployment--a difficult problem both for the people affected and for policymakers trying to address it. Sometimes people are ready and willing to work, but their skills, perhaps because of technological advances, are not a good fit for the jobs that are available. Or suitable jobs may be available but are not close to where they and their families live. These are factors over which monetary policy has little influence. Other measures--such as job training and other workforce development programs--are better suited to address structural unemployment.
After taking account of both frictional and structural unemployment, what unemployment rate is roughly equivalent to the maximum level of employment that can be sustained in the longer run? The rate can change over time as the economy evolves, but, for now, many economists, including my colleagues at the Fed and me, judge that it is around 4-3/4 percent. It's important to try to estimate the unemployment rate that is equivalent to maximum employment because persistently operating below it pushes inflation higher, which brings me to our price stability mandate.
Does price stability mean having no inflation whatsoever? Again, the answer is no. By "price stability," we mean a level of inflation that is low and stable enough that it doesn't need to figure prominently into people's and businesses' economic decisions. Based on research and decades of experience, we define that level as 2 percent a year--an inflation objective similar to that adopted by most other major central banks.1 Individual prices, of course, move up and down by more than 2 percent all the time. Such movements are essential to a well-functioning economy. They allow supply and demand to adjust for various goods and services. By "inflation," we mean price changes as a whole for all of the various goods and services that households consume.
No one likes high inflation, and it is easy to understand why. Although wages and prices tend to move in tandem over long periods, inflation erodes household purchasing power if it is not matched with similar increases in wages, and it eats away the value of households' savings. So, then, why don't we and other central banks aim for zero inflation? There are several technical reasons, but a more fundamental reason is to create a buffer against the opposite of inflation--that is, deflation. Deflation is a general and persistent decline in the level of prices, a phenomenon Americans last experienced during the Great Depression of the 1930s and one that Japan has confronted for most of the past two decades. Deflation can feed on itself, leading to economic stagnation or worse. It puts pressure on employers to either cut wages or cut jobs. And it can be very hard on borrowers, who find themselves repaying their loans with dollars that are worth more than the dollars they originally borrowed. I am sure we all remember learning in school about farm families in the Great Depression who couldn't pay their mortgages and lost their homes and their livelihoods when crop prices fell persistently.
Another important reason to maintain a modest inflation buffer is that too low inflation impairs the ability of monetary policy to counter economic downturns. When inflation is very low, interest rates tend to be very low also, even in good times. And when interest rates are generally very low, the Fed has only limited room to cut them to help the economy in bad times.
In a nutshell, the Fed's goal is to promote financial conditions conducive to maximum employment and price stability. And I have offered broad-brush definitions of each of those objectives. So where is the economy now, in relationship to them? The short answer is, we think it's close. The economy has come a long way since the financial crisis. As you know, the crisis marked the start of a very deep recession. It destroyed nearly 9 million jobs, and it's been a long, slow slog to recover from it. Unemployment peaked at 10 percent late in 2009, a level unseen for more than 25 years, and didn't move below 8 percent for nearly three years. Falling home prices put millions of homeowners "underwater," meaning they owed more on their mortgages than their homes were worth. And the stock market plunged, slashing the value of 401(k) retirement nest eggs.
The extraordinarily severe recession required an extraordinary response from monetary policy, both to support the job market and prevent deflation. We cut our short-term interest rate target to near zero at the end of 2008 and kept it there for seven years. To provide further support to American households and businesses, we pressed down on longer-term interest rates by purchasing large amounts of longer-term Treasury securities and government-guaranteed mortgage securities. And we communicated our intent to keep short-term interest rates low for a long time, thus increasing the downward pressure on longer-term interest rates, which are influenced by expectations about short-term rates.
Now, it's fair to say, the economy is near maximum employment and inflation is moving toward our goal. The unemployment rate is less than 5 percent, roughly back to where it was before the recession. And, over the past seven years, the economy has added about 15-1/2 million net new jobs. Although inflation has been running below our 2 percent objective for quite some time, we have seen it start inching back toward 2 percent last year as the job market continued to improve and as the effects of a big drop in oil prices faded. Last month, at our most recent meeting, we took account of the considerable progress the economy has made by modestly increasing our short-term interest rate target by 1/4 percentage point to a range of 1/2 to 3/4 percent. It was the second such step--the first came a year earlier--and reflects our confidence the economy will continue to improve.
Now, many of you would love to know exactly when the next rate increase is coming and how high rates will rise. The simple truth is, I can't tell you because it will depend on how the economy actually evolves over coming months. The economy is vast and vastly complex, and its path can take surprising twists and turns. What I can tell you is what we expect--along with a very large caveat that our interest rate expectations will change as our outlook for the economy changes. That said, as of last month, I and most of my colleagues--the other members of the Fed Board in Washington and the presidents of the 12 regional Federal Reserve Banks--were expecting to increase our federal funds rate target a few times a year until, by the end of 2019, it is close to our estimate of its longer-run neutral rate of 3 percent.
The term "neutral rate" requires some explaining. It is the rate that, once the economy has reached our objectives, will keep the economy on an even keel. It is neither pressing on the gas pedal to make the car go faster nor easing off so much that the car slows down. Right now our foot is still pressing on the gas pedal, though, as I noted, we have eased back a bit. Our foot remains on the pedal in part because we want to make sure the economic expansion remains strong enough to withstand an unexpected shock, given that we don't have much room to cut interest rates. In addition, inflation is still running below our 2 percent objective, and, by some measures, there may still be some room for progress in the job market. For instance, wage growth has only recently begun to pick up and remains fairly low. A broader measure of unemployment isn't quite back to its pre-recession level. It includes people who would like a job but have been too discouraged to look for one and people who are working part time but would rather work full time.
Nevertheless, as the economy approaches our objectives, it makes sense to gradually reduce the level of monetary policy support. Changes in monetary policy take time to work their way into the economy. Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road--either too much inflation, financial instability, or both. In that scenario, we could be forced to raise interest rates rapidly, which in turn could push the economy into a new recession.
The factors I have just discussed are the usual sort that central bankers consider as economies move through a recovery. But a longer-term trend--slow productivity growth--helps explain why we don't think dramatic interest rate increases are required to move our federal funds rate target back to neutral. Labor productivity--that is, the output of goods and services per hour of work--has increased by only about 1/2 percent a year, on average, over the past six years or so and only 1-1/4 percent a year over the past decade. That contrasts with the previous 30 years when productivity grew a bit more than 2 percent a year. This productivity slowdown matters enormously because Americans' standard of living depends on productivity growth. With productivity growth of 2 percent a year, the average standard of living will double roughly every 35 years. That means our children can reasonably hope to be better off economically than we are now. But productivity growth of 1 percent a year means the average standard of living will double only every 70 years.
Economists do not fully understand the causes of the productivity slowdown. Some emphasize that technological progress and its diffusion throughout the economy seem to be slower over the past decade or so. Others look at college graduation rates, which have flattened out after rising rapidly in previous generations. And still others focus on a dramatic slowing in the creation of new businesses, which are often more innovative than established firms. While each of these factors has likely played a role in slowing productivity growth, the extent to which they will continue to do so is an open question.2
Why does slow productivity growth, if it persists, imply a lower neutral interest rate? First, it implies that the economy's usual rate of output growth, when employment is at its maximum and prices are stable, will be significantly slower than the post-World War II average. Slower economic growth, in turn, implies businesses will see less need to invest in expansion. And it implies families and individuals will feel the need to save more and spend less. Because interest rates are the mechanism that brings the supply of savings and the demand for investment funds into balance, more saving and less investment imply a lower neutral interest rate. Although we can't directly measure the neutral interest rate, it is something that can be estimated in retrospect. And, as we have increasingly realized, it has probably been trending down for a while now. Our current 3 percent estimate of the longer-run neutral rate, for instance, is a full percentage point lower than our estimate just three years ago.
You might be thinking, what does this discussion of rather esoteric concepts such as the neutral rate mean to me? If you are a borrower, it means that, although the interest rates you pay on, say, your auto loan or mortgage or credit card likely will creep higher, they probably will not increase dramatically. Likewise, if you are a saver, the rates you earn could inch higher after a while, but probably not by a lot. For some years, I've heard from savers who want higher rates, and now I'm beginning to hear from borrowers who want lower rates. I can't emphasize strongly enough, though, that we are not trying to help one of those groups at the expense of the other. We're focused very much on that dual mandate I keep mentioning. At the end of the day, we all benefit from plentiful jobs and stable prices, whether we are savers or borrowers--and many of us, of course, are both.
Economics and monetary policy are, at best, inexact sciences. Figuring out what the neutral interest rate is and setting the right path toward it is not like setting the thermostat in a house: You can't just set the temperature at 68 degrees and walk away. And, because changes in monetary policy affect the economy with long lags sometimes, we must base our decisions on our best forecasts of an uncertain future. Thus, we must continually reassess and adjust our policies based on what we learn.
That point leads me to repeat what I said when I began: Like the Commonwealth Club, the Federal Reserve was created more than a century ago during an era of government reform to serve the public interest. The structure established for the Federal Reserve back then intentionally insulates us from short-term political pressures so we can focus on what's best for the American economy in the longer run. I promise you, with the sometimes imperfect information and evidence we have available, we will do just that by making the best decisions we can, as objectively as we can.
Thank you. I welcome your questions.
I don't know Bob, you would think that $150M in debt was the end of the world the way the market looks at it. 150M in debt is a lot but, not uncommon, it certainly shouldn't be holding a company like GCM to under .11.
Gold Stocks: A Fabulous Rally Accelerates
Jan 17, 2017
Rate hikes tend to be good for gold, and even better for gold stocks. On that note, please click here now. Double-click to enlarge this hourly bars gold chart.
Since Janet Yellen hiked rates in December, gold has rallied almost $90. That’s good news, but the great news is that the US central bank plans more rate hikes this year.
Gold has a rough historical tendency to decline ahead of rate hikes, and rally strongly after they happen.
Please click here now. Double-click to enlarge this daily bars gold chart.
The 14,7,7 Stochastics oscillator is beginning to show signs of “flat lining” in the overbought position. That tends to happen during very strong rallies.
Britain’s prime minister Theresa May is about to make a key speech on the Brexit. That could push gold into my next profit booking target zone at $1245.
Both gold and gold stocks have been chewing through overhead resistance zones with ease this year, and $1245 is the next one. Gold price enthusiasts should be light sellers if gold goes near that $1245 target zone.
Please click here now. Double-click to enlarge. The dollar continues to weaken against the safe-haven yen, with smart money bank traders long the yen, and short the dollar.
Gold’s rally began when the dollar began falling against the yen in December.
Please click here now. Donald Trump is good for gold in a number of ways.
Uncertainty is one of them, but he’s also poised to ramp up infrastructure spending (inflationary).
Also, for the past 50 years, gold sports a good track record of rising during US presidential transition years. 2017 is a transition year.
Trump endorses a lower dollar and higher interest rates. If he’s able to do that, inflationary pressures would increase quite dramatically.
Higher rates incentivize banks to make loans, and a lower dollar itself pushes gold higher.
As good as gold looks now, gold stocks look even better. Please click here now. Influential analysts at Credit Suisse bank are very positive about gold stocks, regardless of whether gold rises or falls, but they see gold at $1300+ in 2017.
Mining companies that have cut costs are well-prepared to handle lower gold prices, and they will have great profits at even slightly higher prices.
Please click here now. Double-click to enlarge this fabulous GDX chart.
GDX is breaking out of a drifting rectangle, and beginning to surge towards the $25 target zone. Gamblers can buy the breakout with a tight stop-loss order, targeting that $25 area.
Longer term investors who bought in the $20 - $18.50 area can lighten up a bit in the $25 area too, if GDX makes it there.
Please click here now. Double-click to enlarge.
T-bonds are rallying nicely along with gold, and Ben Bernanke just added some “punch” to the price action, with his latest statement that the decline in the T-bond was likely a bit overdone.
Please click here now. Double-click to enlarge this silver chart.
Silver is moving higher in a “steady as she goes” manner. This type of price action is indicative of a rally that may be in the early stages, rather than near an end.
For another look at the silver chart, please click here now. The $17.30 area is quite important. I think the Trump inauguration should be the catalyst that moves silver above $17.30, and ushers in the kind of “meat and potatoes” rally that most of the world’s silver bugs are waiting for!
Bought Deal Announcement For 27M shares.
http://web.tmxmoney.com/article.php?newsid=7756489171680460&qm_symbol=GSC
Apparently not too much.
Dip66, What seems to be the problem, its Tuesday, Gold is up $15 to $1215 and this dog can't even hold onto .85?
Next Up For Gold Today...
UK PM Theresa May will this Today make a keynote speech on Brexit
We've known for a while that the PM will step up this Tuesday and reveal some of her Brexit strategy plans but there's mounting press coverage this week-end that it most certainly will be for a "hard" variety, and some.
Yesterday I posted that the PM was once again being urged to reveal more about her Brexit plans and today The Sunday Telegraph reports that May will say that Britain must now:
be prepared to leave the customs union to secure free trade deals across the world
regain full control of its borders even if that means ending single market membership
no longer be bound by European Court of Justice rulings after Brexit, despite claims to the contrary
unite after the "division" of the referendum by ditching the terms "Leaver" and "Remainer"
Contents of the speech are being closely guarded by the PM with a draft yet to be given to senior cabinet ministers but the speculation is gathering momentum despite denials from May's office.
She has long said that " Brexit means Brexit" but markets have reacted understandably to the uncertainty of exactly what that might entail. We can now expect further pressure on the pound in Asia and beyond if only on a "sell rumour/buy fact" scenario. What remains to be seen is, as has been the consistent case with events such as the Brexit vote, US election and Fed rate hike, how much is/becomes factored in and how far the markets gets ahead of themselves.
However, as I've long argued on these pages, what we've seen in the past 6 months by way of better than expected/hoped for economic data has been the product of a honeymoon period. Brexit hasn't been triggered yet and the rules haven't changed.
Even after May's speech on Tuesday morning at the historic Lancaster House venue the uncertainty will very much continue and we should expect the pound to remain undermined overall. I said in my personal Brexit vote article that I think leaving the EU will ultimately be beneficial to the UK, and that the pound should duly recover, and I stand by that.
It's just not going to be anytime soon.
I've been Telling You Guy's For Weeks Now, Watch The Dollar, Trump Doesn't Want A Strong Dollar, Trump's Policies Won't Work With A Strong Dollar, The Sharp Rise In The Dollar Is Unsustainable!
I think I pretty much nailed that one...
Dollar Tumbles After Trump Calls Currency "Too Strong", Slams Border-Adjustment Tax
One can probably put the time of death of the Trumpflation rally as 11:47pm on Monday night. That's when the WSJ published the latest excerpt of its Friday interview with Donald Trump, in which the president-elect himself said the dollar was already “too strong”and blamed this is in part due to China holding down its currency and added that “our companies can’t compete with them now because our currency is too strong. And it’s killing us.”
The yuan is “dropping like a rock,” Mr. Trump said, dismissing recent Chinese actions to support it as done simply “because they don’t want us to get angry.”
As the WSJ added, Trump broke with a recent tradition of presidents refraining from comments on the dollar’s level, and more to the market's surprise, he is now talking the dollar down, not up. The USD is up 4% against a broad basket of currencies since he was elected, and roughly 25% since mid-2014. The dollar-negative sentiment was echoed several hours later by Trump advisor Anthony Scaramucci, who told a Davos audience that "we must be careful of a rising dollar."
In short: the dollar's rise may be over for the time being.
Trump didn't only lash out at the greenback, and in the same interview, which was originally conducted on Friday but whose details were only released on monday, he slammed the Border Adjustment Tax (BAT), the "cornerstone of House Republicans’ corporate-tax plan, which they had pitched as an alternative to his proposed import tariffs" and which some have speculated could catalyze as much as a 15% move higher in the USD.
"Anytime I hear border adjustment, I don't love it", Trump told the WSJ, calling the Border Tax Adjustment "too complicated. "
The border adjustment measure is part of U.S. House of Representatives Speaker Paul Ryan's "Better Way" tax reform blueprint, which was discussed with top members of the transition team during a meeting on Capitol Hill on Monday. The measure intends to boost U.S. manufacturing by taxing imports while exempting U.S. business export revenues from corporate taxation. Though some tax experts believe Trump has given his support for the border adjustment provision, he termed the measure as getting "adjusted into a bad deal" in the interview.
As warned here previously, retailers and oil refiners have likewise criticized the measure, warning it would drive up their tax bills and force them to raise prices because they rely so heavily on imported goods. But the biggest factor against the BAT may be that Koch Industries, a conglomerate run by billionaire brothers active in Republican politics, last month said the border-adjustment measure could have “devastating” long-term consequences for the economy and the American consumer.
The WSJ provided the first indication of Trump's position on the BAT, which previously was assumed to be supported by Trump. That is no longer the case:
The apparent divide between the incoming president and congressional allies underscores the challenge Mr. Trump will face advancing his agenda, and in particular his planned tax cuts. The transition team and House leaders have been talking but they clearly have some details and agreements to work out.
“Speaker Ryan is in frequent communication with the president-elect and his team about reforming our tax code to save American jobs and keep the promises we’ve made,” said AshLee Strong, a spokeswoman for House Speaker Paul Ryan (R., Wis.) “Changing the way we tax imports and exports is a big part of that, and we’re very confident we’ll get it done.”
As the WSJ adds, on the campaign trail last year, Mr. Trump proposed lowering the corporate tax rate to 15% and in the interview with the Journal on Friday, he seemed to suggest that rate cuts were his preferred mechanism for improving the corporate tax system.
“Under the border adjustment concept, if somebody is making a motorcycle or a plane in our country, they’re getting a credit for the plane they make before they send it over to wherever it’s going,” Mr. Trump said. “And you don’t need that plus lower taxes and everything else. And it’s too complicated. They get credit on some parts and not other parts. Where was the part made? I don’t want that. I just want it nice and simple.”
Should Republicans jettison the border adjustment following Trump's criticism, they will need some other way to prevent companies from booking their income outside the U.S., said Warren Payne, a former GOP policy aide at the Ways and Means Committee. Furthermore, unless the US finds a way to effectively tax imports, suddenly Trump's stimulus plan looks quite expensive, putting it in jeopardy.
The result: a broad drop in the USD across all currencies overnight.
http://www.zerohedge.com/news/2017-01-17/dollar-tumbles-after-trump-calls-currency-too-strong-slams-border-adjustment-tax
Nice ride, at least now you have your profile picture.
Its all good, just having a little fun with ya, my Mother grew up on Peaks Island, off the coast of Portland Maine. At 86 she still raves about her childhood on that Island!
Island life...that explains a lot!
With all that great advice, we should be expecting a picture shortly from AK.
Left click your screen name.
Left click "edit profile image".
Under "image upload" left click "choose file".
Search and double click on desired picture.
When link appears, left click "upload".
Under "direct link" next to selected picture on left, highlight link, right click and copy.
In your post after selecting "Image", paste in center of {img][/img] on the flashing cursor.
Why The Stock Market Has Soared (And We'll All Soon Know What It's Like To Be A Madoff Client)
http://www.zerohedge.com/news/2017-01-15/why-stock-market-has-soared-and-well-all-soon-know-what-its-be-madoff-client
We only need gold to get back to the high $1300's to rake in enormous profits in miners again this year...be patient, it will happen. Gold is already up $80 in less than a month...now $1204, and miners are up even more! You can't ask for much more than that.
This Could Push Gold Higher This Week...
Already back above $1200 again tonight...
UK PM Theresa May will this Tuesday make a keynote speech on Brexit 15 Jan
We've known for a while that the PM will step up this Tuesday and reveal some of her Brexit strategy plans but there's mounting press coverage this week-end that it most certainly will be for a "hard" variety, and some.
Yesterday I posted that the PM was once again being urged to reveal more about her Brexit plans and today The Sunday Telegraph reports that May will say that Britain must now:
be prepared to leave the customs union to secure free trade deals across the world
regain full control of its borders even if that means ending single market membership
no longer be bound by European Court of Justice rulings after Brexit, despite claims to the contrary
unite after the "division" of the referendum by ditching the terms "Leaver" and "Remainer"
Contents of the speech are being closely guarded by the PM with a draft yet to be given to senior cabinet ministers but the speculation is gathering momentum despite denials from May's office.
She has long said that " Brexit means Brexit" but markets have reacted understandably to the uncertainty of exactly what that might entail. We can now expect further pressure on the pound in Asia and beyond if only on a "sell rumour/buy fact" scenario. What remains to be seen is, as has been the consistent case with events such as the Brexit vote, US election and Fed rate hike, how much is/becomes factored in and how far the markets gets ahead of themselves.
However, as I've long argued on these pages, what we've seen in the past 6 months by way of better than expected/hoped for economic data has been the product of a honeymoon period. Brexit hasn't been triggered yet and the rules haven't changed.
Even after May's speech on Tuesday morning at the historic Lancaster House venue the uncertainty will very much continue and we should expect the pound to remain undermined overall. I said in my personal Brexit vote article that I think leaving the EU will ultimately be beneficial to the UK, and that the pound should duly recover, and I stand by that.
It's just not going to be anytime soon.