Interest rates and its effect on Gold and precious metals

Published here: http://goldsilverworlds.com/gold-silver-insights/interest-rates-and-its-effect-on-gold-and-precious-metals/

An interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. The assets borrowed could include cash, consumer goods, and large assets such as a vehicle or building.

In terms of borrowed money, the interest rate is typically applied to the principal, which is the amount of money lent. The interest rate is the cost of debt for the borrower and the rate of return for the lender.

So in other words, interest rates are the prices for holding or loaning money. Banks give out interest rates for saving money which attracts depositors. Banks also receive interest rates for each loan they give out with the deposited money.

Interest rates and Inflation

Lower interest rates mean a higher demand for loans from businesses and individuals. Each loan increases the money supply system and according to the quantity theory of money, (supply and demand), The growth of the money supply will mean an increase in inflation. So this means that lower interest rates will highen inflation and inversely, higher interest rates will equal to lower inflation.

As previously discussed, Interest rates have an effect on inflation and subsequently, this also affects gold and precious metals.

Gold and Precious metals

A precious metal is a term used for the classification of rare metals that have high economic value.  The value of these metals is driven by various factors like rarity and industrial uses. The most popular precious metals with investors are gold, platinum, and silver. Precious metals tend to do well when inflation rates are above interest rates, making it a store of value against loss of value in paper currencies. So as interest rates rise to combat inflation, Precious metals will also be affected as this means the prices of gold and other precious metals could fall.

As an investment, precious metals are sought after to diversify portfolios and as a store of value, particularly as a hedge against inflation and during times of financial uncertainty. The single most popular precious metal for investment purposes is gold, followed by silver but when interest rates rise and go beyond inflation rates, Gold and other precious metals will most likely drop in prices.

Conclusion

The rise of interest rates is more likely the attempt of the federal reserve to regulate inflation and thus affect cash holdings and investments of investors and businesses alike. But these changes will fight the rise of inflation and therefore, help consumers and investors in different aspects of business and spending plus assist them through higher savings interest rates. On the downside, higher interest rates mean higher prime rates, credit card rates and increase in the U.S. national debt and lower gold and precious metal prices.

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Sound Money Needed Now More Than Ever

Published here: http://goldsilverworlds.com/gold-silver-experts/sound-money-needed-now-more-than-ever/

By Clint Siegner, Money Metals Exchange

The sound money movement reemerged on the national political scene a decade ago. In 2008, the financial crisis brought in a fresh wave of U.S. gold and silver investors.

Ron Paul and the Tea Party advocated for limiting government and ending the Federal Reserve system. Sound money advocates made real inroads in recruiting Americans to their cause based on evidence that the nation is headed for bankruptcy.

The implications of the most recent financial crisis went way beyond budget and finance.

Many Americans grasped the more significant lesson. The perpetual expansion of government spending lay behind the corresponding decline in personal liberty for them, their children, and their children’s children.

Dishonest money is a dream for politicians and bankers, but it is a nightmare for citizens. Charts showing the final abandonment of the remnants of the gold standard in 1971 and the exponential rise in government debt helped people make the connection between dishonest, unlimited fiat money and unlimited government.

Here is one example from the Daily Caller…

The trend shown on this chart has not changed or improved. The red bar on the right-hand side of the current chart now stands more than twice as high with total government debt north of $21 trillion.

There is no credible effort in Washington to limit spending. It is safe to say U.S. deficits and the corresponding borrowing will continue to rise exponentially. It will continue until confidence finally collapses; either in the nation’s ability to repay, or in the dollar, or both.

The nation needs sound money more desperately now than ever.

Unfortunately, the debt chart above isn’t the only chart that tells a damning story. Below is a chart from TF Metals Report which shows the regular beatings given to silver in recent months. The picture for gold looks similar.

This is what a controlled market looks like!

The bankers and central planners hated the lesson Americans got following the 2008 financial crisis. They are using the markets to condition people to respond differently. Buy stocks, buy bonds — any conventional “paper” securities. And, for the love of Pete, keep borrowing.

For gold and silver investors, the conditioning is delivered in the form of a regular bludgeoning each time the metals start to show strength.

Any who still question whether markets are manipulated, simply aren’t paying attention. Or they rely upon CNBC for all of their investment news. The topic has been covered extensively on alternative news sites, including by Money Metals.

Crooked and relentlessly painful markets, combined with optimism surrounding Donald Trump, is a potent combination.

Yes, there was some grumbling when Trump signed the latest budget and expansion of government.

However, many fewer Americans feel the sense of alarm that prevailed when the Federal government was running trillion-dollar deficits under Obama. Others may be alarmed, but they question whether gold and silver will work as honest money given the price never seems to reflect the reality of the nation’s finances.

Too many Americans are effectively tuned out when it comes to the message of sound money and limited government. That is tragic. Few will be ready and a whole lot more will be caught by surprise when the inevitable reckoning finally arrives.

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

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Effects of Inflation on Gold and Precious Metals

Published here: http://goldsilverworlds.com/gold-silver-insights/effects-of-inflation-on-gold-and-precious-metals/

Inflation is characterized as a general increase in prices and fall in the purchasing value of money. But the question we want to answer is “How does this affect gold and precious metals?” We’ll get there in a moment.

When the price levels rise, each unit of currency will buy you less goods and services, therefore, Inflation reduces the purchasing power per unit of money. This can affect the economy in various ways, like increase the opportunity cost of holding money, reduce the burden of private and public debt, change in the prices and demand for Gold and precious metals and so many more.

Inflation and interest rates also have a direct relationship to one another as the smallest change on either side can have an adverse effect on each other and the economy. Inflation can be directed by many factors like rise in oil prices, rise of interest rates, rising commodities ..etc.

Gold and Precious metals

Inflation also has a direct effect on gold. When inflation rises, gold rallies. As we have mentioned earlier, inflation is the increase in prices of goods caused by the increases in the money supply, so analogous relationship can be seen between gold and money supply. Gold and other commodities that are priced internationally in US dollars automatically cost more because you’ll need more of the newly-devalued dollars to purchase the same amount of gold. With the steady increase of prices in the market due to inflation there could be a stronger demand for gold and other precious metals.

Gold as an inflation hedge

An inflation hedge is an investment that maintains or increases its value over time. Hence, an inflation hedge should provide protection against the depreciation of the currency. When you invest in Gold, this becomes a Hedge against rising inflation and the fall of the U.S. Dollar. Historically Gold has served as a Hedge from these two major problems, with the rising Inflation gold typically appreciates and when investors find out their money is losing its value, they would rather choose to put in on a hard asset that will maintain its value, by which Gold has been a prime example.

Conclusion

Inflation has a great impact on the prices in the market and the economy and with the steady rise of prices, investors are already looking for a hedge to maintain the value of their money. Gold has always been considered as a hedge against inflation and other economic uncertainty, so it’s a good bet to invest in gold as inflation soars higher along with other precious metals like silver and platinum.

 

 

 

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Michael Pento: Inflation to Skyrocket When Fed Reverts to New QE & Interest Rate Cuts

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Silver Price: This Industrial Metal Is All Set to Make a Monster Move

Published here: https://www.profitconfidential.com/silver/silver-price-industrial-metal-set-to-make-monster-move/

Expect a Violent Move in Silver Prices
This is a special report, in which I am not going to outline any specific company, as I usually do. Instead, I am going to focus my interests directly on the price of silver.

The reason why I am focusing on the silver price is that I have reason to believe that a very large and violent move is on the horizon.

Many might be wondering what a commodity has to do with technology. The answer is that silver is not only a precious metal, but it is also an industrial metal.

Silver is consumed in the development and creation of many technologies. These range from automotive applications to smartphones to solar panels, to name a.

The post Silver Price: This Industrial Metal Is All Set to Make a Monster Move appeared first on Profit Confidential.

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The Overall Top 5 Gold Mining Companies

Published here: http://goldsilverworlds.com/gold-silver-general/the-overall-top-5-gold-mining-companies/

There are different methods by which gold mining companies are ranked. One is by their annual production, by their cash cost per ounce, that is, how much money it costs them to mine the gold. Since gold prices are the same everywhere, companies with lower costs per ounce make more profit. The most common method lists by market capitalization which considers the total value of capital holdings by that company. Also considered when comparing companies is their market capitalization per ounce of gold equivalent which takes the market value and total reserves and resources for each company as well as the price of gold into consideration. The figures for each company can be used to determine the value the stock market gives to each company’s reserves on an ounce to ounce basis. Here we present to you the top 5 mining companies.

According to the World Gold Council primary gold production hit another record in 2017 after nine years of growth in output, although at a much slower pace. Global gold production totalled roughly 105m troy ounces in 2017. The output is up 525 tonnes or nearly 17m ounces since the start of the decade.

1. Barrick Gold – 5.32 MOZ ( Million Ounces)

Barrick Gold Corporation is the largest gold mining company in the world, with its headquarters in Toronto, Ontario, Canada. The company has mining operations in Argentina, Australia, Canada, Chile, the Dominican Republic, Papua New Guinea, Peru, Saudi Arabia, the United States and Zambia. Barrick is the gold mining leader, both in terms of size and low operating costs. Company guidance calls for all-in sustaining costs (AISC) of just $765 to $815 per ounce for 2018. Barrick’s output could slide by more than 10% this year. Barrick’s gold production peaked at 7.7m ounces in 2010 and 2011.

2. Newmont – 5.27 MOZ

One of the world’s largest gold producers with assets or operations on five continents, Newmont is an industry leader in safety & sustainability. Newmont Mining Corporation is based in Greenwood Village, Colorado, USA and is a mining company that traces its roots to the diversified holding company William Boyce Thompson established in 1916. Incorporated in 1921, it has active gold mines in Nevada, Indonesia, and Peru. Holdings include Santa Fe Gold, Battle Mountain Gold, Normandy Mining, Franco-Nevada Corp and Fronteer Gold. Newmont also has many joint venture relationships and is the second largest mining company next to Barrick Gold.

3. AngloGold Ashanti – 3.76 MOZ

AngloGold Ashanti Limited is a global gold mining company. It was formed in 2004 by the merger of AngloGold and the Ashanti Goldfields Corporation. This Gold company is now a global gold producer with 21 operations on four continents. The company is listed on the New York, Johannesburg, Accra, London and Australian stock exchanges, as well as the Paris and Brussels bourses. As at 1 March 2018, AngloGold Ashanti has 14 mines and 3 projects in ten countries.

4. Kinross Gold – 2.67 MOZ

Kinross Gold overtaking Canadian peer Goldcorp to take the fourth spot as the Vancouver company experiences another year of double digit percentage declines in output. Kinross Gold Corporation is a Canadian-based gold and silver mining company founded in 1993 and headquartered in Toronto, Canada. It currently operates 9 active gold mines and sits pretty as the fourth largest Gold mining company.

5. Goldcorp – 2.57 MOZ

Goldcorp Inc. is a gold production company headquartered in Vancouver, British Columbia, Canada. The company currently has four mines in Canada, two mines in Mexico, and four in Central and South America. Goldcorp, once the world’s most valuable listed gold miner during, is in a rebuilding phase with a stated goal of producing 3–4m ounces per year by 2021. Gold corps ranks as the 5th largest Gold mining company next to Kinross Gold.

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The Direction of Gold and Silver Prices for the Next Three Months

Published here: http://goldsilverworlds.com/price/the-direction-of-gold-and-silver-prices-for-the-next-three-months/

As they say, timing is everything. This applies in almost everything especially in investing. Although the prices of precious metals are likely to remain stable, analyzing it for a longer time table is very important before taking further action. This year has been claimed as the golden year for precious metals. The increasing incomes will likely pull up the demand of precious metals too. As the law of supply and demand states, the limited supply and high demand of precious metals will likely push the prices of precious metals higher.

 

Gold Price for the Next Three Months

June – For the month of June, the predicted price of gold at the beginning is $1,266/oz with $1,301/oz as the highest price and $1,177/oz as the lowest price. When calculated, the average price is $1,246 dollars per ounce.

 

July – For July 2018, the expected price of gold at the beginning of the month is $1,239/oz. The average price is $1,226/oz since the highest price is $1,282/oz and the lowest possible price is $1,160/oz. The price of gold at the end of the month could hit up to $1,221/oz.

 

August – $1,221/oz is the estimated beginning price of gold for the month of August while $1,215/oz is the predicted price at the end of the month. The price of gold for the month is averaging at $1,217/oz with $1,276/oz as the highest price and $1,154/oz as the lowest price.  Prices get harder to estimate the further out you project, so the actual values could be very different than shown.  Unforeseen events, storms, political turmoil, etc. can impact the prices greatly.

 

The above data shows a decrease in the price of gold, nonetheless it is expected that it will change any time soon as the demand for it keeps on growing as months go by and the value that it holds never fades no matter how long the time is.

 

On the other hand, the price of silver will likely maintain its value and an increase is expected due to the demand of silver in different industries. It is predicted that the lowest price for silver could be $16/oz and the highest is $21.30/oz. This is due to the limited supply of silver, but the demand is amazingly high leading its price to likely increase within the next three months. Silver remains as an attractive and versatile option for people who cannot afford the prices of buying gold.

Like any other asset, the prices of gold and silver can sharply change from time to time, yet their importance will never go out of the way. Their importance will never change no matter what the price is in as much as their uses will never be wasted no matter what the form is.

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How a few companies are bitcoining it

Published here: https://www.economist.com/news/business/21742775-bitmain-chinese-bitcoin-miner-and-designer-chips-made-4bn-last-year-taiwans-tsmc-has?fsrc=rss

IN A recent video Jeremy Sciarappa, a YouTuber, flips the lid off a red box in his living room to reveal a silver machine the size of a shoebox, whining noisily. The contraption is an Antminer S9, sold by Bitmain, a Chinese firm. Its job is to help validate transactions conducted in bitcoin, the world’s best-known crypto-currency. Because bitcoin has no central authority, it relies on its users to keep things humming along. Those who help out are granted bitcoins, in a process called mining. The Antminer s9 is beloved of hobbyist miners worldwide. Nestled inside are 189 application-specific integrated-circuit (ASIC) chips, designed by Bitmain to solve bitcoin’s cryptographic puzzles as quickly as possible. They were made by TSMC, a giant Taiwanese semiconductor firm.

Mr Sciarappa and his fellow enthusiasts are a 21st-century version of the “49ers”, the young men who rushed to California in 1849 to try their luck digging and panning for gold. Few hit it rich, but the businesses that helped them...Continue reading

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What Happens to the Price of Gold if Trump is Impeached?

Published here: http://goldsilverworlds.com/gold-silver-insights/what-happens-to-the-price-of-gold-if-trump-is-impeached/

The impeachment of Trump has been a revolving issue for quit a long time. What does impeachment mean? Impeachment is the process of getting rid of a president outside of election time. It is a long and difficult process at that – first, the House of Representatives has to vote by a majority to impeach a president and; second, it goes to the senate where two-thirds vote is required to actually remove the president. So, what happens to markets if the US President gets impeached?

In the history or America, two presidents have notably gotten themselves into trouble, Clinton and Nixon. These lead to the resignation of Nixon and the impeachment of Clinton. Clinton’s presidency was far from a clean slate and had gone through numerous scandals. Clinton was impeached on the December of 1998 for lying about his affair with Monica Lewinsky yet, in the end, he was able to keep his job. During that time, the price of gold remained stable despite the turmoil going around. The stock market suffered from jitters, but it lasted only for a short time.

On the other hand, Nixon was not impeached as what almost everybody assumed. He left the presidency of his own will just when the impeachment started. Then again, his impeachment did not cause the stock market to crash. A more significant event than Nixon’s resignation was his decision to close the gold window, making the U.S. dollar a fiat currency with no direct link to precious metals such as gold.

Basing from the two historical data, the impeachment of a president does not necessarily affect the market. Thus, if Trump will be impeached, the price of gold has little or no volatility at all, far from the misconception that the price of gold will fall right along with the market. In fact, the price of gold can soar high, which happens often, when to stock market crashes. It can be noted the gold’s biggest bull market happened while the stock market in flat. This is because the catalyst for higher gold is unrelated to the stock market.

Considering gold as the safe haven for traders when the stock market is on the rocks, gold can be then a good investment for potential gains if the impeachment of Trump happens, even though the impeachment does not spell bad news at all in the stock market. If the impeachment happens, then gold prices are more likely to retrace their gains which is the result of the increase of demands of the investors for relative shelter from market volatility.

In any case, the precious metals especially gold have the strongest recovery of any asset class. As history generally shows, a change in the presidency affiliation benefits the price of gold as gold performs well in times of uncertainty.

The post What Happens to the Price of Gold if Trump is Impeached? appeared first on Gold Silver Worlds.

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Gold Investment Against Volatile Markets

Published here: http://goldsilverworlds.com/physical-market/gold-investment-against-volatile-markets/

As glittering as it was way back in 800 B.C., gold has owned the throne for its value and rich history among cultures all throughout the world. It has maintained and even increased its value throughout the ages that people tend to pass it on from generation to generation in order to preserve their wealth. Can gold be then as precious as it seems to be a ‘safe haven’ when it comes to a volatile market?

Market volatility can come in different shapes and sized and is and will always be a part and parcel of investing. Traditionally speaking, gold has been a refuge for investors seeking shelter from a volatile stock market. Today, the push and pull between a strong market outlook and concerns that inflation could stage a comeback has made gold as a good hedge against inflation as the growing interest of investors and other people to gold continue to skyrocket.

When the market becomes volatile, owning precious metals can reduce the potential portfolio losses. Why? First, it is a strategic holding that diversifies your portfolio – your go-to safe-haven when geopolitical risk is blazing. Second, gold is negatively correlated with the rest of the market which means that even when the stock and bond prices fall off the edge, gold prices can be unchanged, or even go higher. Lastly, the purchasing power of gold is relatively stable because of its limited supply being circulated. Central banks can make more money and companies may issue new stock, but gold cannot be created in just a snap of a finger.

The fear that this year will mark the big top in equities has even more attracted investors to use gold as a defence against the threat of further losses. Market volatility is more likely to continue in the markets which gives way to the comeback of gold as a genuine insurance policy in a shaky market. The volatility is an indicator on how odd an asset gold is, with its numerous advantages – lightweight, ultra-portable, and it doesn’t spoil or tarnish.

Generally speaking, gold is not considered as an investment since it does not generate income but it is some kind of different entity that people run to when they are scared of other assets because its price tends to rise when the cost of living increases. Thus, gold can be deemed as the crisis commodity as it has retained its value not only in financial uncertainty but in political uncertainty as well.

The demand of gold, especially in investors keeps on increasing as many are beginning to see gold as an investment class in which funds should be allocated, although the price of gold can be volatile for a short term, but it has always maintained its value over a long term. Gold has served as a hedge against the volatile market, making gold worthy to be considered as an investment.

The post Gold Investment Against Volatile Markets appeared first on Gold Silver Worlds.

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China Takes the Long View on Gold-Silver… and So Should You

Published here: http://goldsilverworlds.com/investing/china-takes-the-long-view-on-gold-silver-and-so-should-you/

A cursory look at Chinese history can convince you that China should not be underestimated when it sets its sights on a particular goal.

Even before Mao Zedong took over the reins in 1949, and the first Five Year Plan began in 1953, centuries of history demonstrated that long-term planning, while not always meeting expectations, is a core behavioral trait of the Chinese psyche.

And more often than not, it has enabled them to hit the mark.

Expect eventual success for the One Belt, One Road Initiative – the world’s largest construction project, estimated to cost $80 trillion dollars – linking the Asian mainland, (including Central Asia) with Europe via high speed rail, communications links and vibrant financial trading platforms.

And expect this project to be a major factor in bringing about what Doug Casey and others believe could become the greatest commodities bull-run that most of us now living are going to see.

The petro-yuan. A game-changer?

And oh, by the way, China recently officially launched a petro-yuan contract at the Shanghai International Energy Exchange. It marks the first time overseas investors have been able to access a Chinese commodity market – an oil futures contract – that can be settled, not only with U.S. dollars, but also Chinese Yuan, eventually a basket of currencies… and gold.

Asian Analyst, Pepe Escobar sees clearly where this is heading, saying:

As the yuan progressively reaches full consolidation in trade settlement, the petro-yuan threat to the US dollar, inscribed in a complex, long-term process, will disseminate the Holy Grail: crude oil futures contracts priced in yuan fully convertible into gold…

 That means China’s vast array of trade partners will be able to convert yuan into gold without having to keep funds in Chinese assets or turn them into US dollars… Still, the whole petrodollar edifice lies on OPEC – and the House of Saud– pricing oil in US dollars; as everyone needs greenbacks to buy oil, everyone needs to buy (spiraling) US debt. Beijing is set to break the system – as long as it takes.

Meanwhile gold will continue rising to a level where at some point, Beijing decides to set a conversion rate. When this “golden moment” arrives, the effects on global oil trade – and U.S. continued supremacy in this arena – will be profound. Mining Analyst, Byron King doesn’t mince any words about it. Says he,

China’s vast array of trade partners will be able to convert yuan into gold without having to keep funds in Chinese assets or turn them into U.S. dollars. It’s a straight-up way to bypass the buck. And what if Saudi Arabia – among China’s largest oil suppliers – agrees to accept yuan instead of dollars? It’ll be a bomb-down-the-funnel for U.S. dollar hegemony in the world.

Gold-for-Oil is just one element which will take precious metals to new all-time highs.

For the last several years, we’ve discussed many of these factors, about which readers can fully test their understanding by perusing scores of reports and essays archived here at https://www.moneymetals.com/news You can also find a steady stream of informative, relevant, actionable information on “The Silver Guru” David Morgan’s Blog.

Once this trend fully gets under way – sooner than most expect – the price you’re looking at for physical gold (and silver with its 90% directional gold- correlation price movement) will quickly recede in the rear-view mirror.

Here are just a few recent commentaries that should give you a sense of the structural changes in these markets, making them increasingly subject to explosive moves on the upside – without sending you an invitation to board the train beforehand.

The bottom line is gold is nearing a major bull breakout above $1365. That will turn psychology bullish and bring traders back in droves. Gold is rallying ever closer to new bull-market highs as evidenced by its massive multi-year ascending-triangle chart pattern now nearing a bullish climax. Today gold is only a couple percent below that decisive breakout, which will finally blast it back onto the radars of investors. – Adam Hamilton, Zeal Speculation and Investment

“We see a massive base building in gold. Massive. It’s a four-year, five-year base in gold. If we break above this resistance line, one can expect gold to go up by, like, a $1,000. . .” Doubleline CEO, Jeff Gundlach, the “Bond King”

“With the growth of high-end consumption and the development in second and third-tier cities, the Chinese market will show its substantial demand, mostly unexplored, for physical gold, as more and more people start to realize gold’s stored and retaining values in the long term.” – Song Xin, China Gold Association, April 18, 2018.

So how should you consider handling this situation?

Yes, we’ve been waiting “quite awhile” for this trend to get underway, creating fireworks for metals’ holders. And yes, a few people have become impatient, and actually sold back their metal – which may have taken years to accumulate. But just remember, it’s less a question of if, rather than when this all comes together.

Successful metals’ owners who have prospered since the beginning of the bull run in 2000, got there – and stayed onboard – by following a few sensible rules.

Does this look like an established trend? (Courtesy goldchartsrus.com)

They listen to the “experts” and pay attention to big changes, like the Chinese yuan-for-oil event we’re discussing here.

In addition, they look at what the charts tell them – that Asia continues to suck up gold and silver from the West like a proverbial vacuum cleaner. The Silk Road Gold Total Reserves Plus Demand chart nearby confirms this in spades. They touch base with risk tolerance, taking stock of their financial capability to participate. And acquire metal on a regular basis (without going ‘all in’ at any particular price point), regardless of that the price is doing that month.

They understand that profoundly positive things come to those who are patient, have a plan… and who then act on it. So, ask yourself today, “Am I willing – like the Chinese – to persevere for ‘as long as it takes'”?

David Smith is Senior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com. For the past 15 years, he has investigated precious metals’ mines and exploration sites in Argentina, Chile, Mexico, Bolivia, China, Canada, and the U.S. He shares his resource sector findings with readers, the media, and North American investment conference attendees.

The post China Takes the Long View on Gold-Silver… and So Should You appeared first on Gold Silver Worlds.

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House Monetary Policy Committee Member Questions Treasury and Fed about Their Gold Activities

Published here: http://goldsilverworlds.com/money-currency/house-monetary-policy-committee-member-questions-treasury-and-fed-about-their-gold-activities/

Washington, DC (April 25^th, 2018) – A Member of Congress posed some pointed questions to the Federal Reserve and the U.S. Treasury this week about their activities involving America’s gold reserves, including, apparently, efforts to “drive gold out of the world financial system in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.”

In a letter dated April 24, Representative Alex Mooney (R-WV) wrote to Jerome Powell, Chairman of the Federal Reserve, and Steven Mnuchin, Secretary of the U.S. Treasury, raising concerns about their formal policy to devalue the Federal Reserve Note (e.g. “inflation targeting”) and requesting information about the United States’ use of, and position on, gold.

“The purchasing power of our currency has fallen some 97% since Congress passed the Federal Reserve Act in 1913, with an acceleration in the rate of decline occurring since the early 1970s when the final link to gold was severed,” wrote Mooney while also pointing out there had been almost no inflation in the U.S. prior to the creation of the Federal Reserve System.

“This Fed policy of creating inflation has the effect of driving up the cost of virtually everything my West Virginia constituents consume, while simultaneously reducing the real value of their pensions, savings, and fixed income payments,” Mooney continued.

In his capacity as a member of the House Financial Services Committee and its Monetary Policy and Trade subcommittee, Mooney has asked the Fed and Treasury to answer the following questions in writing:

1. Records in the archives of the historian of the U.S. State Department describe U.S. government policy in recent decades as aiming to drive gold out of the world financial system in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.

Is this still U.S. government policy toward gold? If not, what IS the U.S. government’s current policy toward gold?

2. I have heard complaints that the U.S. gold reserve has not been fully audited for many decades, particularly as there seems to have been no acknowledgement of – or account for – “swaps” and leases of gold or arrangements for such to which the U.S. government has been a party.

Does the U.S. government, through the Treasury Department, the Federal Reserve System, or any other agency or entity, transact in gold or gold derivatives either directly or through intermediaries? If so, what are those transactions and what are their objectives?

3. Does the U.S. government undertake any transactions in gold or gold derivatives through the Bank for International Settlements, Bank of England, or other central banks or governments? If so, what are these transactions and their objectives?

Stefan Gleason, Executive Director of the Sound Money Defense League said, “In recent decades, government officials and central banks have almost entirely kicked gold out of the monetary system with disastrous effects, particularly for the average American.”

“A return to sound money, i.e. gold and silver, would usher in a new era of investment, savings, stable prices, and fiscal discipline.”

“We look forward to an explanation from Secretary Mnuchin and Chairman Powell regarding the government’s activities using America’s gold, including to what extent America’s gold reserves have been put at risk or used for what might be viewed as dubious purposes.”

Congressman Mooney’s letter can be accessed here.

The Sound Money Defense League is an Idaho-based public policy group working nationally to bring back gold and silver as America’s constitutional money. 

 

The post House Monetary Policy Committee Member Questions Treasury and Fed about Their Gold Activities appeared first on Gold Silver Worlds.

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Ethereum Price Forecast: ETH Q1 Review Shows Odd Silver Lining

Published here: https://www.profitconfidential.com/cryptocurrency/ethereum/eth-price-forecast-eth-q1-review-shows-odd-silver-lining/

Ethereum News Update
The first quarter of 2018 was historically bad for ETH prices, according to a recent CoinDesk report, but there’s a silver lining embedded in the data: namely, that ETH recovered from these types of slumps in the past.

For instance, Ethereum prices lost 40% in the fourth quarter of 2016. While that’s not as bad as the 48% it lost this past quarter, it’s still pretty significant. Investor sentiment was at rock-bottom levels. But then, ETH prices skyrocketed 527% over the next three months.

There’s an important lesson here.

Not all quarters will have triple-digit rallies. We should expect months of backsliding or sideways trading as.

The post Ethereum Price Forecast: ETH Q1 Review Shows Odd Silver Lining appeared first on Profit Confidential.

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Michael Pento: Currencies Will Be “Flushed Down the Toilet” Triggering a “Mad Rush into Gold”

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New Warnings on Risky “Self Storage” Gold & Silver IRAs

Published here: http://goldsilverworlds.com/investing/new-warnings-risky-self-storage-gold-silver-iras/

Bullion investors buy gold and silver as a matter of self-reliance. Physical metals aren’t dependent upon the promises of financial institutions, governments, or other third parties.

This lack of counterparty risk makes precious metals quite different from most conventional assets. There is no possibility of a default or mismanagement which renders them worthless. That is a lot more than can be said of securities such as stocks and bonds.

Recently a few firms promoting “self-storage” precious metals IRAs have been trying to exploit the self-reliance streak running through bullion investors in a manner that could cause significant harm.

These firms offer a scheme to circumvent IRS rules which require IRA metals be stored by a third party, and some people are biting. The desire to have possession and control of the metals appears to be outweighing good sense.

The warnings are piling up. Last week, the Industry Council on Tangible Assets issued the latest warning about storing IRA metals at home.

The trouble is rooted in the IRS requirement that assets in your retirement account be held by a third party.

Some firms have begun offering a dangerous work-around. They help investors create an LLC company which they claim will fill the role of the third party. The LLC buys and holds the metals, and the IRA holder manages the LLC.

IRS officials have already signaled that they see the formation of the LLC as a simple fiction to grant control over assets which are supposed to kept at arm’s length. ”Self-storage” IRA holders seem likely to find their accounts disqualified, with taxes and penalties due immediately (as an early distribution of the full account balance).

As one expert frames it; “you can own a bakery with your IRA, but you cannot be the baker.” Owning a business with your self-directed IRA is okay. Hiring yourself and paying a salary is a definite no-no. Likewise it is perfectly fine to buy investment real estate, but your IRA cannot purchase your personal residence.

IRA promoters are offering LLC or “checkbook” IRAs despite knowing the program has not been defended successfully in court. It certainly does not have the blessing of the IRS.

In fact, the IRS is explicitly warning people. Forbes reports the agency was asked about ads promoting these types of IRAs: “The IRS cannot comment on claims made by any particular IRA promoter, but the agency warns taxpayers to be wary of anyone claiming that gold held in your IRA can be stored at home or in a safety deposit box.”

It appears to be only a matter of time before the IRS starts nailing such account holders to the wall. If so, IRA account holders will be faced difficult choice; pay the tax and penalty or hire an attorney and try to defend the scheme in court.

If there is any certainty, it’s that the promoters behind this type of IRA will not be picking up these costs.

Anyone reading the fine print will find they disclaim responsibility, even though they are happy to collect a handsome fee for assisting investors with setup.

More than that, we’ve also noticed that the promoters of the “home storage” IRA scheme also tend to steer investors into rip-off “collectible” coins, especially Proof Gold Eagles and Proof Silver Eagles. These coins are eligible to be held in IRAs but give the dealer a huge profit margin at the expense of the buyer.

It’s telling that a few promoters of these risky “home storage” IRAs are also the bad actors when it comes to what products they promote. They aren’t really looking out for their customers.

There are plenty of great reasons to hold precious metals in an IRA, just be sure to do it right. Find a reputable trustee, such as New Direction IRA, and store the metal in a secure, audited vault that is not connected to the banking system and offers physically segregated accounts, such as Money Metals Depository.

Gold and silver bullion are a great way to reduce counterparty risk. The last thing investors want is to find the IRS is their counterparty!

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

The post New Warnings on Risky “Self Storage” Gold & Silver IRAs appeared first on Gold Silver Worlds.

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One Belt, One Road, One Direction for Precious Metals

Published here: http://goldsilverworlds.com/physical-market/one-belt-one-road-one-direction-precious-metals/

All great events hang by a hair. The man of ability takes advantage of everything and neglects nothing that can give him a chance of success; whilst the less able man sometimes loses everything by neglecting a single one of those chances.

~Napoleon Bonaparte

China’s launch several years ago of the One Belt, One Road Initiative is set to become the biggest commercial linking-system constructing project in world history. In the book David Morgan and I co-authored, Second Chance: How to Make and Keep Big Money from the Coming Gold and Silver Shock-Wave, we discuss the “New Silk Road” this way:

…the plan, described as an “economic partnership map with multiple rings interconnected with one another” envisions an economic land belt and a maritime road linking Beijing through Europe to the Mediterranean. This modern equivalent of the old Silk Road would weave together the economies of over half the world’s population via transit corridors of highways, high-speed rail, fiber-optic cables, pipelines, and air and seaport hubs.

OBOR – also known as the Belt and Road Initiative – is drawing supplies of commodities to it across the board, like iron filings to a magnet. Concrete, iron, zinc, copper… silver and gold. Silver, as a critical ingredient in the electronics and communication build-out; gold (+ silver) because of rising incomes for China’s middle class – larger than the population of the U.S. – which will continue the historical habit adding to its precious metal holdings.

An excellent interactive map showing the primary pathways and effects of this mammoth construction project can be found at the South China Morning Post. Elements:

• During a recent two-day visit to Beijing by U.K. Chancellor Philip Hammond, it was announced that former Prime Minister David Cameron would be taking a lead role in a US$1 billion private equity infrastructure fund directly investing in the One Belt One Road (OBOR) initiative. ~Tama Churchouse

• HSBC has estimated that the expansive Belt and Road program will generate no less than an additional, game-changing US$2.5 trillion worth of new trade a year.

• It is important to remember that the “belt” in BRI is a series of corridors connecting Eastern China with oil-gas rich regions in Central Asia and the Middle East. The high-speed rail networks, or new “Silk Roads”, will simply traverse regions filled with, what else, un-mined gold. ~Pepe Escobar

• An almost unnoticed (when in the West, made light of) corollary is China’s proposed “Latin Belt and Road” program, involving Brazil, Argentina and Chile. China’s Foreign Minister says, “It follows the principle of achieving shared growth through discussion and collaboration. It is nothing like a zero-sum game.” ~Asia Times

The meaning for gold and silver?

When most Western analysts tout the virtues of precious metals’ ownership, they focus on what Frank Holmes refers to as the “Fear Trade.” They say you should (and we agree) own gold and silver as “insurance” against rising inflation, which by the year (daily in Venezuela and Zimbabwe) reduces the purchasing power of David Morgan’s famously termed “paper promises.” These highly-liquid metals can be turned into fiat paper virtually anywhere in the world.

Silk Road Gold Demand (Courtesy goldchartsrus.com)

Holmes also refers to the “Love Trade”, a demand factor just as important and enduring. When people’s disposable income rises, they purchase discretionary items – things not otherwise critical beyond the basics of food and shelter. This behavior, especially by Indians and Chinese (“Chindians”) has historically been a habit; almost an obsession. Graceland Updates Editor, Stewart Thomson describes the OBOR context, saying:

Gold is headed back towards slow, relentless appreciation against fiat, but it won’t be as slow as you might think… because of the exponential mathematical relationship between Indian wage increases and gold demand. The road to $15,000 will be built with one belt, one road, one price-advance brick at a time.

As citizens industrialize, they play catch up with everyone else. Because there are almost 8 times more Chindians than Americans, it’s a super-sized version of what took place in the 1880s in America. (Given) that the Chinese are the world’s biggest gamblers, and Indians are maniacally obsessed with owning all the gold there ever was, is, and will be, the bull era promises to be incredibly exciting.

“Technical proof”?

One of most overlooked tools in a technical traders trading box is the relationship between gold and global currencies. On major exchanges it’s most frequently quoted in U.S. dollars, but in a given country, gold demand is expressed in local money. When we see gold advancing in dollars, that’s important. When making new highs in other currencies, it becomes a bell-weather signal in its own right.

Gold vs. Emerging Market Currencies, courtesy allstarcharts.com

The blockchain-gold-silver nexus – another element to the equation.

Over the last year, I have written in this space – as well as in 2018 issues of The Prospector News and The Morgan Report – how the blockchain revolution will affect precious metals’ demand and ownership. Kevin Vecmanis, in an essay titled “Gold and Blockchain”, ties these golden threads together, commenting:

…Gold has found itself in the blind spot of investors almost seven years after making a nominal all-time high. Quietly, beneath everyone’s nose, gold is undergoing a tectonic shift. On every time frame – weekly, monthly, quarterly, and yearly – the trend in gold has shifted upwards. Gold smashed historical quarterly volumes the last two quarters in a row by a significant margin.

While western investors are enamored with the stock markets, there are two billion people in the east that view gold differently and are gladly taking it off our hands at lower prices. Their economic influence is rising. Their economies are in desperate need of transactional efficiencies that the blockchain offers. A rising standard of living in the east directly equates to a rising base demand level for gold.

This year right out of the box, precious and base metals, as well as shares of the better miners who produce them have been strong, a trend set to continue. Information Risk is being replaced by Price Risk.

Don’t become a Lookie Lou who wonders later this year why you didn’t act while metals were “affordable” and available. Don’t become “the man (or woman) of ability” Napoleon describes, who misses “a chance of success” by neglecting to act on the bullish metals’ signals Mr. Market is sending your way.

David Smith is Senior Analyst for TheMorganReport.com and a regular contributor to MoneyMetals.com. For the past 15 years, he has investigated precious metals’ mines and exploration sites in Argentina, Chile, Mexico, Bolivia, China, Canada, and the U.S. He shares his resource sector findings with readers, the media, and North American investment conference attendees.

The post One Belt, One Road, One Direction for Precious Metals appeared first on Gold Silver Worlds.

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Chris Powell: Governments Are LYING about Their Gold Activities while Mining Companies Cower

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5 Big Drivers of Higher Inflation Rates Ahead

Published here: http://goldsilverworlds.com/economy/5-big-drivers-higher-inflation-rates-ahead/

Investors got lulled into a state of inflation complacency. Persistently low official inflation rates in recent years depressed bond yields along with risk premiums on all financial assets.

That’s changing in 2018. Five drivers of higher inflation rates are now starting to kick in.

Inflation Driver #1: Rising CPI

The Consumer Price Index (CPI) is a notoriously flawed measure of inflation. It tends to understate real-world price increases. Nevertheless, CPI is the most widely followed measure of inflation. When it moves up, so do inflation expectations by investors.

On February 13th, the Labor Department released stronger than expected CPI numbers. Prices rose a robust 0.5% in January, with headline CPI coming in at 2.1% annualized (against expectations of 1.9%).

In response to the inflationary tailwinds, precious metals and natural resource stocks rallied strongly, while the struggling U.S. bond market took another hit.

Inflation Driver #2: Rising Interest Rates

Since peaking in mid-2016, the bond market has been stair-stepping lower (meaning yields are moving higher). In February, key technical levels were breached as 30-year Treasury yields surged above 3%. Some analysts are now calling a new secular rise in interest rates to be underway after more than three decades of generally falling rates.

The last big surge in interest rates started in the mid 1970s and coincided with relentless “stagflation” and soaring precious metals prices. It wasn’t until interest rates hit double digit levels in the early 1980s that inflation was finally quelled, and gold and silver markets tamed.

Rising nominal interest rates are bullish for inflationary assets such as precious metals so long as interest rates are following the lead of inflation rates. Only when interest rates get out ahead of inflation and turn positive in real terms are rising rates bearish.

The Federal Reserve will face tremendous political pressure to keep its benchmark rate accommodative and also keep boatloads of bonds on its balance sheet in order to suppress long-term rates.

Inflation Driver #3: Trumpian Politics

Donald Trump has tied the success of his presidency to the level of the stock market like no other president has before. It started the very day after election night 2016, when markets experienced a dramatic reversal higher…and never looked back.

Tax cuts, de-regulation, and plans for big infrastructure spending have helped stimulate the economy and equity markets. President Trump touted the stock market during his 2018 State of the Union address. But shortly thereafter the market got hit with heavy selling as Trump’s new handpicked Fed chairman took over at the central bank.

You can bet Jerome Powell will feel the heat from the White House if his policies hurt the stock market. The path of least political resistance is keep inflating – especially given the government’s enormous and growing debt load.

Inflation Driver #4: Rising Deficits

Trumponomics means greater economic stimulus….and larger budget deficits. The fiscal year ahead is now projected to deliver a funding gap of nearly $1 trillion (with future deficits expected to exceed $1 trillion).

These new trillions in spending will just get charged to the national credit card. It currently has a balance of $21 trillion (not including tens of trillions of dollars more in off the book unfunded liabilities).

All this new debt in a period of relative economic strength is setting up for a disaster when the economy eventually turns down and the deficits spike to unimaginable new highs. The Fed can keep printing the dollars needed to keep the government solvent. But at some point, the world may lose confidence in the devaluing currency in which all these federal IOUs are denominated.

The gathering debt crisis virtually ensures there will be a dollar crisis – which means there will be a massive inflation spike to “pay” for the government’s otherwise unpayable debts.

Inflation Driver #5: Rising Commodity Cycle

Commodity markets are cyclical in nature. When prices for a commodity are low, production falls. As new supplies diminish, the market tightens, and prices move higher. The higher prices incentivize producers to invest in production capacity and increase output. Eventually, the market becomes oversupplied, prices fall, and the cycle starts all over again.

Where are we in the commodity cycle now? Most likely in the early stages of a major upswing. Precious metals, base metals, and crude oil have all moved up off their most recent respective cycle lows. Agricultural commodities have lagged but are gaining some upside momentum so far in 2018.

The commodity markets slump from 2011-2016 caused investment in mining, drilling, and exploration to dry up. According to the International Energy Agency, new oil discoveries by 2016 sunk to their lowest number in decades. Meanwhile, gold, silver, and copper mines got “high graded” – leaving the most difficult and most expensive to process ore for future mining efforts that will only be viable with much higher prices.

A position in physical gold and silver should be viewed as a core long-term holding. However, there are some times in the commodity cycle that are more favorable than others for buying.

Right now, the cycle appears set to pressure metals prices higher. How much higher is unknowable. If renewed inflation fears drive investors into gold and silver markets for safety and later, speculation, prices could easily exceed the 2011 cycle highs by significant margins.

 Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

The post 5 Big Drivers of Higher Inflation Rates Ahead appeared first on Gold Silver Worlds.

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Ethereum Price Forecast: ETH Investors Find the Silver Lining They Need

Published here: https://www.profitconfidential.com/cryptocurrency/ethereum/eth-price-forecast-investors-find-silver-lining/

Ethereum News Update
Blockchain has "the potential to enhance economic efficiency, mitigate centralized systemic risk, defend against fraudulent activity and improve data quality and governance." (Source: "There'd Be No DLT Without Bitcoin, Says CFTC Chief," CoinDesk, February 6, 2018.)

This little quote sent Ethereum prices soaring on Monday.

Oddly, it came from CFTC Chairman J. Christopher Giancarlo, who made the comments while addressing the U.S. Senate.

The post Ethereum Price Forecast: ETH Investors Find the Silver Lining They Need appeared first on Profit Confidential.

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Ethereum Price Forecast: 3 Causes of This Week’s ETH Price Crash

Published here: https://www.profitconfidential.com/cryptocurrency/ethereum/eth-price-forecast-3-causes-weeks-price-crash/

Ethereum News Update
Ethereum prices are proving more resilient than BTC or BCH, but that doesn’t mean they are untouched by this week’s crypto market crash. Ethereum too was affected by the tidal wave of pessimism.

As a result, ETH is trading 4.66% lower against the U.S. dollar.

This puts the Ethereum to USD exchange rate near $1,108.36. However, the Ethereum to Bitcoin rate is up 1.94% to 0.10871 BTC, adding a silver lining to this otherwise depressing news.

At first, I looked to see if trading volumes were driving the ETH price crash. They are not. Investors swapped about $4.6 billion worth of ETH in the last 24 hours. It just so happens that no one wanted higher.

The post Ethereum Price Forecast: 3 Causes of This Week’s ETH Price Crash appeared first on Profit Confidential.

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