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Biden's proposed inheritance tax changes would destroy small American farmers: Norquist : https://www.kitco.com/news/2021-07-30/Biden-s-proposed-inheritance-tax-changes-would-destroy-small-American-farmers-Norquist.html
My Comment : I certainly hope Biden's $3.5Trillion plan fails completely. Otherwise stocks won't be worth holding due to the capital gains tax.
Excerpt:
Another way the Biden Administration is looking to help fund the American Families Plan, is to nearly double the top tax rate on capital gains from 23.8% to 43.4%
Michael Pento: First Disinflation, Then Deflation, Then Big-Time Inflation : https://www.zerohedge.com/markets/michael-pento-first-disinflation-then-deflation-then-big-time-inflation
My Comment : Market Implosion 2022 ?
40 Garage Sale Finds That Could Secretly Be Worth a Ton
: https://www.msn.com/en-us/autos/enthusiasts/40-garage-sale-finds-that-could-secretly-be-worth-a-ton/ss-BB1ghHX8?ocid=msedgntp
My Comment: I think it's good to have multiple investments. I've found some good buys at garage sales over the past 40 years. But covid has limited the number of garage sales. More importantly, sellers are asking too much for junk. Also, the finds of 20 years ago are just not available. Most estate sales are now online rather than at garage sales.
Time To Buy Gold As A Hedge Against "Extreme Financial Deleveraging" Credit Suisse Says : https://www.zerohedge.com/commodities/time-buy-gold-hedge-against-extreme-financial-deleveraging-credit-suisse-says
Excerpts:
But while gold may be undervalued in strictly fundamental terms, there is always a risk that central banks will lose control and markets will crash. Gold fixes this, because as Garthwaite writes, "Gold is a hedge against extreme financial deleveraging" and adds:
The level of government debt, deficit and corporate debt is extreme. We continue to believe that if the TIPS yield gets much above zero, that would start to cause the markets to worry about a debt trap and that in turn could lead to a major risk-off trade. This could then prompt a Fed response driving down real yields (and debasing money).
Of course, none of this matters as long as the BIS strategically lends out paper gold to its member banks who have a net deficit in the thousands of tons, and tactically decides to slam the bid every time there is an even modest breakout to make sure that golden animal spirits never emerge.
Several analysts I read are expecting a big move in gold (up or down) after this long period of consolidation. I think Biden's spending plans are keeping gold from dropping. And with reconciliation, the Democrats can push their $3.5T social infrastructure spending without Republican support. I've seen estimates as high as 43% for capital gains taxes and WA state wants to add another 7%. I shudder at the thought of the government taking half of your profits.
Several analysts I read are expecting a big move in gold (up or down) after this long period of consolidation. I think Biden's spending plans are keeping gold from dropping. And with reconciliation, the Democrats can push their $3.5T social infrastructure spending without Republican support. I've seen estimates as high as 43% for capital gains taxes and WA state wants to add another 7%. I shudder at the thought of the government taking half of your profits.
This shows 'how easy' it is to manipulate the gold market - trader's chat logs : https://www.kitco.com/news/2021-07-22/This-shows-how-easy-it-is-to-manipulate-the-gold-market-trader-s-chat-logs.html
Condor Gold vs Condor Resources
Hold on to your gold; a Fed rate hike in 2023 could be too little too late for inflation - VanEck's Joe Foster
: https://www.kitco.com/news/2021-07-21/Hold-on-to-your-gold-A-Fed-rate-hike-in-2023-could-be-too-little-too-late-for-inflation-VanEck-s-Joe-Foster.html
My Comment: In the end, it is all about the debt and it will only get worse in the next financial crisis, especially sovereign debt.
Excerpt:
"The risk of lower real rates, a weaker than expected post-stimulus economic recovery, higher inflation, a weaker dollar, extreme debt levels, the final bursting of asset price bubbles and other unintended consequences of the massive liquidity injected into the financial system are all factors that may support higher gold prices in the longer-term," he said. "It is not hard to imagine an environment where more than one of these risks could come into play, significantly increasing gold"s appeal as a safe haven, inflation hedge and portfolio diversifier."
While there are plenty of long-term fundamental factors that support gold prices, Foster noted that the most significant headwind for gold remains the U.S. dollar. The greenback has shown some resilient strength even as bond yields have dropped to their lowest levels since the start of the year.
Foster added that a weaker U.S. dollar could be the key to drive gold prices back to $2,000 an ounce.
Hold on to your gold; a Fed rate hike in 2023 could be too little too late for inflation - VanEck's Joe Foster
: https://www.kitco.com/news/2021-07-21/Hold-on-to-your-gold-A-Fed-rate-hike-in-2023-could-be-too-little-too-late-for-inflation-VanEck-s-Joe-Foster.html
My Comment: In the end, it is all about the debt and it will only get worse in the next financial crisis, especially sovereign debt.
Excerpt:
"The risk of lower real rates, a weaker than expected post-stimulus economic recovery, higher inflation, a weaker dollar, extreme debt levels, the final bursting of asset price bubbles and other unintended consequences of the massive liquidity injected into the financial system are all factors that may support higher gold prices in the longer-term," he said. "It is not hard to imagine an environment where more than one of these risks could come into play, significantly increasing gold"s appeal as a safe haven, inflation hedge and portfolio diversifier."
While there are plenty of long-term fundamental factors that support gold prices, Foster noted that the most significant headwind for gold remains the U.S. dollar. The greenback has shown some resilient strength even as bond yields have dropped to their lowest levels since the start of the year.
Foster added that a weaker U.S. dollar could be the key to drive gold prices back to $2,000 an ounce.
Hold on to your gold; a Fed rate hike in 2023 could be too little too late for inflation - VanEck's Joe Foster
: https://www.kitco.com/news/2021-07-21/Hold-on-to-your-gold-A-Fed-rate-hike-in-2023-could-be-too-little-too-late-for-inflation-VanEck-s-Joe-Foster.html
My Comment: In the end, it is all about the debt and it will only get worse in the next financial crisis, especially sovereign debt.
Excerpt:
"The risk of lower real rates, a weaker than expected post-stimulus economic recovery, higher inflation, a weaker dollar, extreme debt levels, the final bursting of asset price bubbles and other unintended consequences of the massive liquidity injected into the financial system are all factors that may support higher gold prices in the longer-term," he said. "It is not hard to imagine an environment where more than one of these risks could come into play, significantly increasing gold"s appeal as a safe haven, inflation hedge and portfolio diversifier."
While there are plenty of long-term fundamental factors that support gold prices, Foster noted that the most significant headwind for gold remains the U.S. dollar. The greenback has shown some resilient strength even as bond yields have dropped to their lowest levels since the start of the year.
Foster added that a weaker U.S. dollar could be the key to drive gold prices back to $2,000 an ounce.
Hold on to your gold; a Fed rate hike in 2023 could be too little too late for inflation - VanEck's Joe Foster
: https://www.kitco.com/news/2021-07-21/Hold-on-to-your-gold-A-Fed-rate-hike-in-2023-could-be-too-little-too-late-for-inflation-VanEck-s-Joe-Foster.html
My Comment: In the end, it is all about the debt and it will only get worse in the next financial crisis, especially sovereign debt.
Excerpt:
"The risk of lower real rates, a weaker than expected post-stimulus economic recovery, higher inflation, a weaker dollar, extreme debt levels, the final bursting of asset price bubbles and other unintended consequences of the massive liquidity injected into the financial system are all factors that may support higher gold prices in the longer-term," he said. "It is not hard to imagine an environment where more than one of these risks could come into play, significantly increasing gold"s appeal as a safe haven, inflation hedge and portfolio diversifier."
While there are plenty of long-term fundamental factors that support gold prices, Foster noted that the most significant headwind for gold remains the U.S. dollar. The greenback has shown some resilient strength even as bond yields have dropped to their lowest levels since the start of the year.
Foster added that a weaker U.S. dollar could be the key to drive gold prices back to $2,000 an ounce.
Hold on to your gold; a Fed rate hike in 2023 could be too little too late for inflation - VanEck's Joe Foster
: https://www.kitco.com/news/2021-07-21/Hold-on-to-your-gold-A-Fed-rate-hike-in-2023-could-be-too-little-too-late-for-inflation-VanEck-s-Joe-Foster.html
My Comment: In the end, it is all about the debt and it will only get worse in the next financial crisis, especially sovereign debt.
Excerpt:
"The risk of lower real rates, a weaker than expected post-stimulus economic recovery, higher inflation, a weaker dollar, extreme debt levels, the final bursting of asset price bubbles and other unintended consequences of the massive liquidity injected into the financial system are all factors that may support higher gold prices in the longer-term," he said. "It is not hard to imagine an environment where more than one of these risks could come into play, significantly increasing gold"s appeal as a safe haven, inflation hedge and portfolio diversifier."
While there are plenty of long-term fundamental factors that support gold prices, Foster noted that the most significant headwind for gold remains the U.S. dollar. The greenback has shown some resilient strength even as bond yields have dropped to their lowest levels since the start of the year.
Foster added that a weaker U.S. dollar could be the key to drive gold prices back to $2,000 an ounce.
'We're in untested waters' with inflation and the real winners are hard assets like gold – former JPMorgan MD : https://www.kitco.com/news/2021-07-20/-We-re-in-untested-waters-with-inflation-and-the-real-winners-are-hard-assets-like-gold-former-JPMorgan-MD.html
Excerpts:
"There is an excessive amount of debt on top of pretty much zero rates around the world," Deane said. "That debt is both at the corporate level and the individual level. It is a real concern if inflation gets out of hand."
The main issue is how to taper inflation. "If the Fed starts raising rates in this environment, the impact on the economy will be quite significant. It's a real fine line that they have to walk whereby raising rates doesn't dramatically cause a huge U-turn in the economic stability that they've been able to create," Deane explained.
Gold held the line above $1800 for today. Actually somewhat impressive given the plunge in silver and the stock market.
Investing in stocks, bitcoin is 'very dangerous,' gold is the place to be, says veteran investor
: https://www.kitco.com/news/2021-07-19/Investing-in-stocks-bitcoin-is-very-dangerous-gold-is-the-place-to-be-says-veteran-investor.html
Excerpts:
Tice is known for his bearish Wall Street calls, and now he is saying that a market crash is coming. He is particularly concerned about the tech sector.
"A lot of money has been thrown at Alphabet and Microsoft, Apple and Facebook, Twitter, etc.," he said on Friday. "Costs are going up in that sector."
The volatile crypto space is another danger zone right now, Tice warned.
"We had a bitcoin position when bitcoin was at $10,000," he said. "However, when it got to $60,000, we felt like that was long in the tooth... Lately, there's been a lot more uproar from central bankers, Bank for International Settlements [and] the Bank of England have made profound negative statements. I think it's very dangerous to hold today."
It is not all doom and gloom for Tice, who sees a once-in-a-decade investment opportunity in the precious metal mining space.
"You look at this lack of discipline in monetary and fiscal markets. Gold is truly the place to be. Over 5,000 years, gold and silver do very well as protection against fiat money," Tice said. "I would be owning gold, especially gold and silver mining companies. These companies have never been cheaper. Many are at single digit multiples yet have potentially 15 to 20% growth rate in earnings even with this flat gold price."
Tice is projecting for gold to climb to $2,000 an ounce by the year-end. "[When you] add on what we think is going to be a 20% annual increase in the gold price. These companies are going to be outstanding opportunities," he added.
re : "Why today" -
My Comment: It is long overdue. The news media is blaming it on COVID and lockdowns which mean a slow recovery. Stocks are artificially high due to Fed support. Trees do not grow to the sky and this "expansion" cannot last indefinitely. It's possible the Fed will double it's balance sheet to $15Trillion in the next financial crisis. Meanwhile, Biden wants to spend $Trillions that we do not have on things we do not need. Today's market drop is a walk in the park compared to what I expect during the next financial crisis.
So, when do we start getting margin calls on the high flying tech stocks ?
It's good to finally see the major indices down substantially. When the markets and the economy really tank, the Fed is going to have to print like never before. Could we see the Fed's balance sheet double to $15T ? Certainly. Buy PMs.
Gold is down $17 and holding above $1800 for now, but the mining shares are taking a much larger hit even though they are not cheap enough for me to buy yet. Silver is off $0.68 to $25.65. We probably have another couple of weeks before the PMs turn around.
Gold is down $17 and holding above $1800 for now, but the mining shares are taking a much larger hit even though they are not cheap enough for me to buy yet. Silver is off $0.68 to $25.65. We probably have another couple of weeks before the PMs turn around.
Returning to crypto is a 'wholehearted no' for Dogecoin founder : https://www.kitco.com/news/2021-07-15/Returning-to-crypto-is-a-wholehearted-no-for-Dogecoin-founder.html
Excerpt:
"The cryptocurrency industry leverages a network of shady business connections, bought influencers and pay-for-play media outlets to perpetuate a cult-like "get rich quick" funnel designed to extract new money from the financially desperate and naive."
"Lose your savings account password? Your fault. Fall victim to a scam? Your fault. Billionaires manipulating markets? They're geniuses. This is the type of dangerous "free for all" capitalism cryptocurrency was unfortunately architected to facilitate since its inception," writes Palmer.
Gold to fall to $1,750 by year end - Bannockburn Global Forex : https://www.kitco.com/news/2021-07-15/Gold-to-fall-to-1-750-by-year-end-Bannockburn-Global-Forex.html
My Comment : Gotta love the stock market at all time highs. Buy, buy, buy. And for gold : Sell, sell, sell. This guy doesn't seem to understand that the debt is going to destroy us. But that's life's perspective from a stock broker's point of view.
Excerpt:
Chandler pointed out that there is not much new information to drive gold prices higher and the current environment is more conducive to equity markets and the U.S. dollar.
"I'm not so sure that gold serves the same function that people used to think of had as we face a new financial industry of [exchange-traded funds] and passive investing," he said.
Powell will just print more money. That solves everything.
Powell will just print more money. That solves everything.
The ever increasing debt means the Fed cannot taper. The Fed will have to buy even more bonds to absorb the government debt and it will need to keep rates low to fund that debt. Financial Armageddon ahead ? Got MORE gold ?
Democrats Strike Deal On $3.5 Trillion "Human Infrastructure" Package : https://www.zerohedge.com/political/democrats-strike-deal-35-trillion-human-infrastructure-package
My Comment : Biden is going to destroy the country. $3.5T + $1.2T = $4.7T on top of the $1.9T pandemic relief. Got Gold ?
Excerpt:
Months after the Biden Administration and its Congressional allies leaked the first details of President Biden's massive two-part "Build Back Better" infrastructure plan, Chuck Schumer, the Democrats' leader in the Senate, just announced that Democrats have united behind a $3.5 trillion "infrastructure" spending package, which they can now pass using special budget rules allowing them to circumvent the filibuster.
'Few assets have been more fragile than bitcoin' - Taleb : https://www.kitco.com/news/2021-07-13/-Few-assets-have-been-more-fragile-than-bitcoin-Taleb.html
Excerpts:
Gold is tangible and physical, which partly sustains its value, but bitcoin has a "path dependence problem."
"We cannot expect a book entry on a ledger that requires active maintenance by interested and incentivized people to keep its physical presence, a condition for monetary value, for any period of time — and of course we are not sure of the interests, mindsets, and preferences of future generations. Once bitcoin drops below a certain threshold, it may hit an absorbing barrier and stays at 0 — gold on the other hand is not path dependent in its physical properties."
Precious metals also have 1,000 of years of tradition to fall back on.
"Few assets in financial history have been more fragile than bitcoin," writes Taleb. "[Bitcoin] can be neither a short nor long term store of value (its expected value is no higher than 0), cannot operate as a reliable inflation hedge, and, worst of all, does not constitute, not even remotely, a safe haven for one’s investments, a shield against government tyranny, or a tail protection vehicle for catastrophic episodes."
Police confiscate record $250 million worth of crypto in London : https://www.kitco.com/news/2021-07-13/Police-confiscate-record-250-million-worth-of-crypto-in-London.html
My Comment : Money laundering will not help crypto currencies
Excerpts:
(Kitco News) London's Metropolitan Police just seized a record $249 million (£180 million) worth of crypto in its latest operation, which is part of a bigger investigation into international money laundering.
Cryptocurrencies are playing an increasing role when it comes to money laundering, said the Met's deputy assistant commissioner Graham McNulty.
The LBMA dodged the Basel III bullet : https://www.kitco.com/news/2021-07-12/The-LBMA-dodged-the-Basel-III-bullet.html
My comment: You knew they would get out of Basel III.
Excerpt:
(Kitco News) - Banks in the U.K are free to apply to be exempt from the Basel III clearing rules. According to Reuters, the upcoming change in rules, known as the net stable funding ratio (NSFR), are part of Basel III regulations designed to make banks more stable and prevent a repeat of the financial crisis of 2008-09
You must have news that I've not seen. The last NR from Condor that I know of was in January.
re: Condor -
I'm still holding 1Mplus shares of Condor. The fundamentals have not changed. Peru is in lockdown until 7/11 and it may get extended. I'm not expecting much from Condor until they start drilling. They are to be paid $4.4M in 1Q2022. That's when the action starts, if not sooner.
Consumer Credit Soars Most On Record As Credit Card Borrowings Explode : https://www.zerohedge.com/markets/consumer-credit-soars-most-record-credit-card-borrowings-explode
My Comment : Spend like there's no tomorrow (and there will be no tomorrow). The banks rake in a lot of CC interest until the borrow defaults on this unsecured debt.
Excerpts
After several months of subdued increases in consumer credit, moments ago the Fed reported that in May, total consumer credit surged by the most on record, soaring by $35.28 billion, nearly double the consensus estimate of $18 billion and sharply higher from last months' $20.04 billion. The monthly increase was a whopping 10% SAAR, pushing the total to a new record high of $4.279 trillion.
What was behind the surge? Well, one month after we noted a surprising dip in credit card usage in April, in May Americans went all out, and splurged, pushing revolving credit, i.e., credit card debt, higher by a whopping $9.2 billion, the biggest monthly increase since December 2019, and pushing total revolving debt to $974.6 billion.
The debt will make the next recession substantially worse than what we've seen to date with a lot of defaults and liquidations. It's been a long time since we had a real recession (1992-93) because the Fed always floods the system with liquidity. It will take a whole lot of liquidity to slow the next downturn simply because of all of the leverage and distortions from Fed previous QE and liquidity injections. Wait for the bargains.
Crypto currencies are a disaster waiting to happen. But that is not the only highly leveraged asset. Look at stock margins, RE down payments, and corporate debt (junk bonds, covenant lite loans, and total corporate debt). All that leverage will cause a massive crash.
Cryto currencies are a disaster waiting to happen. But that is not the only highly leveraged asset. Look at stock margins, RE down payments, and corporate debt (junk bonds, covenant lite loans, and total corporate debt). All that leverage will cause a massive crash.
'Dr.Doom' Fears The Looming Stagflationary Debt Crisis : https://www.zerohedge.com/economics/drdoom-fears-looming-stagflationary-debt-crisis
My Comment : The Fed has created so much money that there are no bargains to be found. A recession could create those bargains.
Excerpts:
We are thus left with the worst of both the stagflationary 1970s and the 2007-10 period. Debt ratios are much higher than in the 1970s, and a mix of loose economic policies and negative supply shocks threatens to fuel inflation rather than deflation, setting the stage for the mother of stagflationary debt crises over the next few years.
For now, loose monetary and fiscal policies will continue to fuel asset and credit bubbles, propelling a slow-motion train wreck. The warning signs are already apparent in today’s high price-to-earnings ratios, low equity risk premia, inflated housing and tech assets, and the irrational exuberance surrounding special purpose acquisition companies (SPACs), the crypto sector, high-yield corporate debt, collateralized loan obligations, private equity, meme stocks, and runaway retail day trading. At some point, this boom will culminate in a Minsky moment (a sudden loss of confidence), and tighter monetary policies will trigger a bust and crash.
Making matters worse, central banks have effectively lost their independence, because they have been given little choice but to monetize massive fiscal deficits to forestall a debt crisis. With both public and private debts having soared, they are in a debt trap. As inflation rises over the next few years, central banks will face a dilemma. If they start phasing out unconventional policies and raising policy rates to fight inflation, they will risk triggering a massive debt crisis and severe recession; but if they maintain a loose monetary policy, they will risk double-digit inflation – and deep stagflation when the next negative supply shocks emerge.
But even in the second scenario, policymakers would not be able to prevent a debt crisis. While nominal government fixed-rate debt in advanced economies can be partly wiped out by unexpected inflation (as happened in the 1970s), emerging-market debts denominated in foreign currency would not be. Many of these governments would need to default and restructure their debts.
At the same time, private debts in advanced economies would become unsustainable (as they did after the global financial crisis), and their spreads relative to safer government bonds would spike, triggering a chain reaction of defaults. Highly leveraged corporations and their reckless shadow-bank creditors would be the first to fall, soon followed by indebted households and the banks that financed them.
So, too, are the European Central Bank, the Bank of Japan, and the Bank of England. The stagflation of the 1970s will soon meet the debt crises of the post-2008 period. The question is not if but when.
A Broad Bipartisan Infrastructure Deal Is Unlikely: Goldman : https://www.zerohedge.com/markets/broad-bipartisan-infrastructure-deal-unlikely-goldman
Excerpt:
Reading recent headlines, one would be left with the impression of a wide range of spending outcomes – a boost of a few hundred billion to as much as $6 trillion over ten years – but the range of outcomes is not as wide as these figures imply. Most of the “traditional” infrastructure President Biden has proposed looks likely to pass, along with substantial R&D spending and renewal of personal tax credits that expire at year end. Together, these cost around 1% of GDP on an annual basis over the next few years. The remainder of the Biden agenda might boost spending by another1% of GDP, but Congress is expected to pare these proposals considerably.
Meanwhile, tax increases also still look likely, assuming that Democrats pass legislation using the reconciliation process. That's why Goldman has not changed its views much in this area, and still expects the corporate tax rate to settle around 25% along with more incremental versions of the international tax changes Biden has proposed. A capital gains rate increase is a close call, but a 28%capital gains rate is slightly more likely than the status quo.
A Broad Bipartisan Infrastructure Deal Is Unlikely: Goldman : https://www.zerohedge.com/markets/broad-bipartisan-infrastructure-deal-unlikely-goldman
Excerpt:
Reading recent headlines, one would be left with the impression of a wide range of spending outcomes – a boost of a few hundred billion to as much as $6 trillion over ten years – but the range of outcomes is not as wide as these figures imply. Most of the “traditional” infrastructure President Biden has proposed looks likely to pass, along with substantial R&D spending and renewal of personal tax credits that expire at year end. Together, these cost around 1% of GDP on an annual basis over the next few years. The remainder of the Biden agenda might boost spending by another1% of GDP, but Congress is expected to pare these proposals considerably.
Meanwhile, tax increases also still look likely, assuming that Democrats pass legislation using the reconciliation process. That's why Goldman has not changed its views much in this area, and still expects the corporate tax rate to settle around 25% along with more incremental versions of the international tax changes Biden has proposed. A capital gains rate increase is a close call, but a 28%capital gains rate is slightly more likely than the status quo.
Basel III is not a game-changer for gold prices and will lead to higher costs and lower liquidity - Bank of America : https://www.kitco.com/news/2021-06-21/Basel-III-is-not-a-game-changer-for-gold-prices-and-will-lead-to-higher-costs-and-lower-liquidity-Bank-of-America.html
My comment: The big banks do not like Basel 3
Excerpt:
Bank of American said that faced with the new funding requirements, bullion banks are more likely to either increase transaction costs or reduce their exposure in the precious metal sector.
"In our view, rising funding requirements for unallocated gold means that financial institutions 1) either reduce the bullion business or 2) sustain activity and put more funding aside. Either way, we don’t think that these dynamics are bullish for gold as such, also because it seems unlikely that banks would support their business by purchasing gold outright, rather than using unallocated gold," the analysts said.