TheDailyGold Premium Update #599

The 26-page update was published and emailed to subscribers late Saturday night.

The update includes a report on one of our holdings which we took a profit on in the summer. The stock has corrected quite a bit but now there are many reasons its a buy. We think it has a chance to pop over the next few months.

We also analyze the sector and the immediate driving forces.

This was one of our best updates.

…read more

Stocks, Bonds, Cryptos. Oil Down and GOLD Up!!

™

Trading RecommendationsCash Flow Gold & SilverSave In SilverMarket Analysis — Investing — Trading Methods At The Morgan Report For Only $50 Per Month. | http://www.themorganreport.com/join.
Discover How YOU Can Cash-Flow Gold & Silver For A Passive Income Of 12% – 26.4% Per Year Just Like Real Estate… Get more details here.
Starting your own precious metals savings program is an easy way to automatically save in gold and silver. This makes it easy to maintain a disciplined program for increasing your ownership of historyâ€s most proven stores of value. Learn more here.

Let My Passion Create Your Wealth.

I’ve Been Helping My Subscribers Weather the Current Economic Mess. Now I Invite You to Join My Growing Circle of Successful Investors.
The Morgan Report is all about YOU and how you can build and preserve Wealth for generations to come. We know it can sometimes seem a daunting task to protect your assets and preserve or grow your wealth. Over 15 years ago, a small group of us started The Morgan Report and formed an exclusive membership organization to promote personal freedom, an honest money system, free market wealth accumulation and asset protection.
Thus was born The Morgan Report – since then we’ve helped 11,000-plus members scattered over the globe in every continent and over 100,000+ e-newsletter subscribers have read our weekly e-newsletter — This Week’s View from The Morgan Report.
Through our publication, The Morgan Report, we provide you with ways to achieve greater financial security and wealth in all sorts of environments.
Learn more and become an insider for The Morgan Report, click link below…
http://www.themorganreport.com/join

Special Riches In Resources Free Report

Because there is a 100% failure rate of ALL fiat money throughout history, you will learn what to do by obtaining your Free Report. Just enter your first name, your primary email address and click the Get Special Report button below.

(function(d, s, id) {
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“To teach and empower people to understand the benefits of an honest monetary system.”
Today’s monetary system is based upon a lie. The lie is that you can get something for nothing, or perhaps more simply stated, wealth can be printed. History has shown throughout 5000 years that whenever a country has tried to maintain this illusion (lie), failure has been the result. We invite you to learn more about what The Morgan Report can do for you. Click on the Learn More About The Morgan Report button now!
Learn More About The Morgan Report *

…read more

Money =/= Currency

Robert Kiyosaki

This post Money =/= Currency appeared first on Daily Reckoning.

From the beginning of time many things have been considered currency. Livestock, grains, spices, beads, and paper have all been forms of currency, but only two things have been money. You guessed it: gold and silver.

In 1971, the U.S. dollar died because it was no longer money—it became a currency. And there is a big difference between money and currency.

It’s a common misconception to think currency is money. For instance, when someone gives you some cash, you presumably think of it as money. It is not. Cash is simply a currency, a medium of exchange that you can use to purchase something that has value.

The word “currency” comes from the word “current,” like an electrical or an ocean current. The word means movement. In overly simple terms, a currency needs to keep moving. If it stops moving, it rapidly loses value. If the loss of value is too great, people stop accepting it.

If people stop accepting it, the value of the currency plummets to zero. After 1971, the U.S. dollar began moving to zero.

Money, unlike currency, has value within itself. Money is always a currency, in that it can be used to purchase other items that have value, but as we’ve just learned, currency is not always money because it doesn’t have value in and of itself.

Think about it this way: is the paper your $100 bill printed on worth $100?

The answer is, of course, no. That paper simply represents value that is stored somewhere else—or at least it used to be before our money became currency. The U.S. dollar is backed by nothing other than hot air, or what is commonly referred to as “the good faith and credit of the United States.”

Dread the Fed

The beginning of the end for the United States economy started with the inception of the Federal Reserve. The Fed, as it’s called, is a private bank, separate from the U.S. government, with the power to dictate our country’s fiscal policy. Since the Fed’s formation, the U.S. dollar has become nothing but currency.

The U.S. Federal Reserve Bank—which is neither “U.S.” nor “Federal,” technically has no reserves, and is not really a bank—was given the right to print U.S. currency by the government.

While the Fed doesn’t have reserves, it does have a printing press. The Fed has been allowed to flood the world with dollars, also known as funny money, magic money, fiat money: currency.

While this did the world some good, such as increasing the standard of living of many countries and making many people rich, it also caused many people to become poorer by not only having to work harder but ultimately earning less money. They earned less money because they paid more in taxes, interest, and inflation.

During the classical gold standard our currency was real, verifiable money, meaning that there was actual gold and silver in the Treasury backing it up. The currency was just a receipt for the money. Then, …read more

6 Reasons to Revolutionize the Way You Invest

Assets Under Management

Much of the investing world has been hypnotized by the vertigo-inducing roller-coaster ride of crazy cryptocurrencies.

But there’s another financial revolution taking place all around you.

And that is the revolution in exchange-traded funds (ETFs).

Consider this:

Since 2000, ETF assets have grown at an average annual rate of 142%. They currently make up 19% of the market.
Last year, the “BlackRock ETF Pulse Survey” found that 52% of U.S. investors intended to invest in ETFs.
9 in 10 financial advisors also expect to invest in ETFs for client portfolios.

Overall, ETF investors are younger, more engaged and more optimistic about their financial futures than the general investor population.

In short, ETF investors are the future…

Six Ways ETFs Trounce Mutual Funds

The ETF industry has the mutual fund business on the run.

And for good reason…

ETFs offer some massive advantages over mutual funds.

In fact, I have to scratch my head wondering why anyone would want to invest in a mutual fund ever again.

Here are six advantages that make ETFs a no-brainer…

1. ETFs have no investment minimums, front-end loads or early redemption fees.

I won’t mince words here…

The front-end loads and early redemption fees that some mutual funds still charge are a retail investor shakedown.

Contrast that with ETFs…

Since ETFs trade like stocks, you can buy as few or as many shares as you want. And you can buy and sell ETFs when you want, without penalty.

With an ETF, you pay only the cost of the stock commission. Leading brokers like Fidelity and Schwab even offer commission-free ETFs.

2. ETFs offer real-time tracking.

Mutual funds price only once each trading day.

In contrast, ETFs price all day long, just like stocks.

That means ETFs reflect more accurately any sharp moves in the value of an underlying portfolio.

3. ETFs offer real-time trading.

Mutual funds are bought and sold only after the market closes. ETFs are bought and sold whenever the markets are open.

ETFs are flexible and efficient. Mutual funds are old and stodgy.

4. ETFs are transparent.

Mutual funds disclose their holdings once per quarter. Meanwhile, ETFs must report their portfolios on a daily basis.

With ETFs, you always know what you’re buying.

5. ETFs are tax efficient.

Mutual funds generate taxable income as part of the regular process of buying and selling shares. That creates taxable capital gains.

In contrast, ETFs exchange underlying securities in kind for ETF shares – a nontaxable event. That means you pay much lower – if any – taxes on ETF gains.

6. ETFs are cheaper than mutual funds.

And here’s my favorite advantage that ETFs have over mutual funds…

The average mutual fund charges a management fee of 1.13%.

In contrast, the average ETF has an expense ratio of 0.44%.

Put another way, the average mutual fund is a whopping 157% more expensive than the average ETF.

How much impact can high fees have on your returns?

Consider this extreme example…

The Rydex S&P 500 Fund Class C (Nasdaq: RYSYX) charges 2.31% per year to track the S&P 500 Index.

In contrast, the Vanguard S&P 500 ETF (NYSE: VOO) – with an identical strategy – charges only 0.04%.

That means the Rydex S&P 500 fund …read more

Paper Lanterns

Mud Volcanoes

There are numerous explanations for just what in the heck is going on with the economy.  Some are good.  Many are bad.  Today we’ll do our part to bring clarity to disorder…

Two data series it is worth paying attention to at the moment: the unemployment rate (U3) and initial claims. As the chart at the top shows, when the former makes a low it is time to worry about the economy. Low points in the U3 UE rate slightly lead the beginning of recessions. Claims on the other hand are near coincident indicators of the stock market, this is to say, lows in initial claims tend to happen within a time period of four to six weeks surrounding major stock market peaks (in most cases they lead slightly, but small lags have occasionally occurred as well). Note: neither indicator confirms an imminent turning point as of yet – initial claims would e.g. have to rise to around 300k in order to do so. The same is true of other major recession indicators, their most recent readings do not yet confirm that the business cycle is about to turn down. However, there is a lot of circumstantial evidence that indicates such a downturn may soon be confirmed, including recent market moves (i.e., deteriorating stock prices and rising credit spreads). [PT]

Several backward looking economic fundamentals show all is well. Third quarter gross domestic product increased at an annual rate of 3.5 percent. And the unemployment rate, if you exclude something called discouraged workers, is just 3.7 percent – a near 50 year low.  By these metrics, the economy’s never been better.

Still, it doesn’t take much snooping around to uncover what’s really going on. Cracks in the economy’s foundation are transforming from minor hairline fissures to full blown surface fractures at about double the rate that Imperial Valley mud volcanoes are consuming Union Pacific Railroad tracks.  These full blown surface fractures will further multiply as the planet approaches the next financial crisis.

Gaia’s pustules… the mud volcanoes of Gobustan, a mysterious moving mud volcano near the Salton Sea and  a cold mud pot in Glenblair, California. [PT]

At the moment, for example, the auto manufacturing and housing sectors are breaking down.  Last week, General Motors announced they plan to cut 14,000 jobs and close five factories.  What in the world is going on?

We suspect that General Motors’ present failings have something to do with the fact that they aren’t very good at making cars.  Do you own a General Motors car?  Do you know anyone who owns a General Motors car?  We don’t either.

An early GM reputation destroyer – the 1971-1977 Chevi Vega. According to Popular Mechanics: “Legend has it that when Chevrolet Division Manager John DeLorean went to the GM Proving Grounds to get his first look at a prototype of the new 1971 Chevrolet Vega, the front of the car literally fell off onto the ground. But that bad omen didn’t keep DeLorean from putting the …read more

Is an Inverted Yield Curve Bullish for Gold?

In recent days we’ve seen the beginnings of an inversion in the yield curve.

The 2-year yield and the 5-year yield have inverted but not yet the the 2-year yield and the 10-year yield, the curve that is watched most. However, “2s and 10s” as bond traders would say appear headed for an inversion very soon.

We know that an inversion of the yield curve precedes a recession and bear market. That is good for Gold. But timing is important and the key word is precedes.

In order to analyze the consequences for Gold we should consult history.

First let’s take a look at the 1950-1980 period.

In the chart below we plot the Barron’s Gold Mining Index (BGMI), Gold, the Fed funds rate (FFR) and the difference between the 10-year yield and the FFR (as a proxy for the yield curve).

The six vertical lines highlight peaks in the FFR and troughs in the yield curve (YC), which begins to steepen when the market discounts the start of rate cuts. A steepening YC is and has been bullish for Gold except when it’s preceded by inflation or a big run in Gold.

 

Note that five of the six lines also mark a recession except in 1966-1967.

At present, the yield curve is on the cusp of inverting for only the third time since 1990.

The previous two inversions in 2000 and 2007 were soon followed by a steepening curve as the market sensed a shift in Fed policy.

The initial rate cut in 2000 marked an epic low in the gold stocks and the start of Gold strongly outperforming the stock market. In summer of 2007 the rate cuts began and precious metals embarked on another impulsive advance.

The historical inversions carry a different context but the takeaways are not so different.

Aside from the mid 1970s to the early 1980s, we find that a steepening of the curve (which accelerates from the start of Fed rate cuts) is bullish for precious metals. (This also includes a steepening in late 1984 that preceded the bull market in the mid 1980s).

With that said, the inversion itself is not bullish for precious metals because there can be a lag from then to the first rate cut and steepening of the curve.

I took a careful look at four of the previous inversions and counted the time from that point to the next significant low in gold stocks. The average and median time of those four is 10 months.

That appears to be inline with my thinking that the Federal Reserve’s final rate hike will be sometime in 2019.

In the meantime, precious metals are rallying but the inversion of the yield curve and Fed policy argue it would not be wise to chase this strength. There will be plenty of time to get into cheap juniors that can triple and quadruple once things really get going. To prepare yourself for an epic buying opportunity in junior gold and …read more

Why the Game of Money Is Rigged

This post Why the Game of Money Is Rigged appeared first on Daily Reckoning.

In a few months, my new book, FAKE: Fake Money, Fake Teachers, Fake Assets, is set to be released. To be honest, I’m still writing it. My publisher isn’t happy with me right now, but it’s something we’ve gone through with every book I’ve written. In the end, I meet the deadline and she can finally get some sleep.

When I wrote Rich Dad Poor Dad in 1997, it was to sell the board game that Kim and I created called CASHFLOW®. I never in all my life would have guessed that it would become the #1 personal finance book of all time. It has been said that it’s changed the way people think about money.

With the new book, I want to change more than the way you might think about money. I want you to understand the lies that have been told to us for decades.

A Brief History

It all starts with this diagram below: 120 years of the DOW.

If you look closely, you’ll see the GIANT crash of 1929. This crash put us into a depression that lasted 25 years. It nearly wiped out the U.S. And it was just this little blip—compared to what would hit the U.S. later.

As you follow through the years, you’ll see in 2000 the dot.com bubble, and then the financial crisis in 2007. You can see how significant these bubbles were. Yet, it seems we haven’t learned from what this chart is trying to tell us.

To predict the future, you have to understand the past.

Gross. Universal. Cash. Heist.

In 1983, my teacher was Dr. R. Buckminster Fuller, and he was famous for the geodesic dome, which was the U.S. Pavilion for the World’s Fair in Montreal in 1967. I studied with him for three summers.

Sadly, Fuller passed away on July 1st, 1983. After he died, his book, Grunch of Giants, was published posthumously. Fuller is more known as a scientist and a mathematician and an architect. When he wrote this book, it was a different kind of book. It was a departure from what he normally wrote about.

Grunch stands for Gross. Universal. Cash. Heist. It’s about who really runs the world economy. So, I read this book, and that’s when I really began to study. For the first time in my life, I became a student. I was a screw off before that. It made me question, “What is Grunch, who are these guys? Who are these guys that are controlling the world?” That was my question.

So, as Fuller said “Get the student out of school and get him back to his studies.”

I realized Fuller was saying the same thing my rich dad was saying. The game is rigged, the game of money is rigged against you and me. The problem was rich dad couldn’t really prove it.

In my book, FAKE, it’s going to prove to you that the game of money is rigged against you.

FAKE Teachers

In …read more

Why EVERY Fiat Currency MUST Fail

™

Trading RecommendationsCash Flow Gold & SilverSave In SilverMarket Analysis — Investing — Trading Methods At The Morgan Report For Only $50 Per Month. | http://www.themorganreport.com/join.
Discover How YOU Can Cash-Flow Gold & Silver For A Passive Income Of 12% – 26.4% Per Year Just Like Real Estate… Get more details here.
Starting your own precious metals savings program is an easy way to automatically save in gold and silver. This makes it easy to maintain a disciplined program for increasing your ownership of historyâ€s most proven stores of value. Learn more here.

With every country of the world having now abandoned sound money for fiat currency, what can’t they just keep pulling maneuvers out of the hat to prop up our “money supply” indefinitely? Are all those predicting a financial collapse just a bunch of Chicken Littles running around saying the sky is falling?

Precious metals and resource guru David Morgan, freshly back from London conferences on gold & silver cashflow strategies & other topics, returns to Reluctant Preppers to answer YOUR viewer questions. Morgan shares a mind-expanding mathematical proposition to get us grappling with the limits of our own finite lifespans and the limited lifespan of our money supply.

Let My Passion Create Your Wealth.

I’ve Been Helping My Subscribers Weather the Current Economic Mess. Now I Invite You to Join My Growing Circle of Successful Investors.
The Morgan Report is all about YOU and how you can build and preserve Wealth for generations to come. We know it can sometimes seem a daunting task to protect your assets and preserve or grow your wealth. Over 15 years ago, a small group of us started The Morgan Report and formed an exclusive membership organization to promote personal freedom, an honest money system, free market wealth accumulation and asset protection.
Thus was born The Morgan Report – since then we’ve helped 11,000-plus members scattered over the globe in every continent and over 100,000+ e-newsletter subscribers have read our weekly e-newsletter — This Week’s View from The Morgan Report.
Through our publication, The Morgan Report, we provide you with ways to achieve greater financial security and wealth in all sorts of environments.
Learn more and become an insider for The Morgan Report, click link below…
http://www.themorganreport.com/join

Special Riches In Resources Free Report

Because there is a 100% failure rate of ALL fiat money throughout history, you will learn what to do by obtaining your Free Report. Just enter your first name, your primary email address and click the Get Special Report button below.

(function(d, s, id) {
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fjs.parentNode.insertBefore(js, fjs);
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“To teach and empower people to understand the benefits of an honest monetary system.”
Today’s monetary system is based …read more

Are You Playing by the Rules of the Rich?

Copy and Paste

This post Are You Playing by the Rules of the Rich? appeared first on Daily Reckoning.

When I was a young boy in elementary school, my rich dad was already putting ideas in my head about the differences between the rich, the poor, and the middle class.

My rich dad would say, “If you want job security, follow your dad’s advice” — my real father — “if you want to be rich, you need to follow my advice.”

Rich dad then went on to show me the difference between his investment plan and my dad’s investment plan.

“My business buys assets with pre-tax dollars,” said rich dad as he drew the following diagram. “Your dad tries to buy assets with after-tax dollars. His financial statement looks like this,” said rich dad.

To sum it up nicely, rich dad combined the two diagrams to highlight the difference between my dad and him.

Playing by Different Rules

The point that rich dad was making was that even though we live in a free country, not everybody plays by the same rules. The rich have laws of their own that allow them to become richer.

Rich dad went on to teach me that because my dad was an employee, he had to pay his taxes first and then invest. That meant that up to 50% or more of his income would be spoken for before he could even begin investing.

As a business owner, rich dad was able to buy assets through his business and then pay taxes on what income was left over. He bought his assets first and paid his taxes later.

“I pay my taxes on net income,” he said. “Your dad pays taxes on his gross income, and then tries to buy assets. Because of that, it is very, very hard for him to achieve any kind of wealth.”

If we were to map this to the CASHFLOW Quadrant, rich dad’s points would look like this:

How my poor dad invested

How my rich dad invested

“Always remember,” said rich dad, “that the rules are different for the different quadrants. Make your decisions about your future wisely. Decide which rules you want to play by.”

You Can Do This Too

I try to pass on the bits of wisdom I learned from my rich dad. Today, as my rich dad taught me, I invest through my businesses, and I teach others to do the same.

When I speak on this, invariably people raise their hands and say things like:

“But I’m an employee, and I don’t own a business.”

“Not everyone can own a business.”

“Starting a business is risky.”

“I don’t have the money to start a business, let alone invest.”

To these types of statements, I remind people that less than 100 years ago, approximately 85 percent of people in the US did own their own businesses as either independent farmers or small shopkeepers. Only a small percentage of the population was employee-based. I know my grandparents were small business owners.

Today, in just a couple generations, it seems that the Industrial Age—with its promise …read more

A Global Dearth of Liquidity

Worldwide Liquidity Drought – Money Supply Growth Slows Everywhere

This is a brief update on money supply growth trends in the most important currency areas outside the US (namely the euro area, Japan and China)  as announced in in our recent update on US money supply growth (see “Federal Punch Bowl Removal Agency” for the details).

Nobody likes a drought. This collage illustrates why.

The liquidity drought is not confined to the US – it is fair to say that it is a global phenomenon, even though money supply growth rates in the euro area and Japan superficially still look fairly brisk. However, they are in the process of slowing down quite rapidly from much higher levels – and this trend seems set to continue.

Euro Area – Money Supply Growth Still High, But Slowing Fast

The chart below shows the euro area’s narrow money supply aggregate M1 (stock) and its year-on-year growth rate. M1 in the euro area is almost equivalent to US TMS-2, which makes it a good enough stand-in (it includes savings deposits that are in practice payable on demand; however, it lacks euro deposits belonging to foreign residents and central government deposits).

It is worth noting that a slowdown to a 0% growth rate triggered crisis conditions in 2008. After a sharp, but short term spike in money supply growth after the ECB made emergency liquidity facilities available to European banks to mitigate the fallout from the US housing bubble implosion, crisis conditions promptly returned when these facilities expired and money supply growth fell to around 1% in 2011.

Euro area, M1 (~TMS-2): Total in millions of EUR (blue line) and y/y rate of change (orange line). We have highlighted the three most recent slowdowns in money supply growth associated with economic crises and declining asset prices. In 2000, a slowdown to 5% annualized growth was sufficient to trigger an economic downturn in concert with a recession in the US after the technology mania ended. It not certain yet where the threshold will be this time, but there are already some indications that it may be at a higher level than in 2008 and 2011. The current growth rate of 6.8% is still quite brisk, but it is down from more than 14% at the peak in 2015 and this downtrend is almost certain to continue.

Although recent surveys show that lending standards in the euro area have eased considerably, bank lending growth remains quite anemic. Lending to non-financial corporations recently grew at just 1.75% y/y, while lending to households grew at approx. 2.6% y/y. Total bank credit growth (incl. lending to governments and other loans) amounted to 3.5% y/y, which is quite similar to recent bank credit growth in the US (3.4%).

In other words, most of the expansion of the money supply in recent years can be ascribed to QE – and the ECB has halved the size of its asset purchase program again to EUR 15 billion per month as …read more

[BREAKING] Canada Abandons Free Market Capitalism

Canadian Natural's Rapidly Growing Dividend

This post [BREAKING] Canada Abandons Free Market Capitalism appeared first on Daily Reckoning.

Desperate times call for desperate measures.

That is the justification for Canada’s most right-wing Province abandoning free market capitalism this week.

On Sunday, the Alberta Government announced that it will be enforcing a mandatory production cut of 8.7 percent for all oil producers operating in the province.

There is an exclusion for the really small operators, many of whom could be bankrupted by such a cut.

For all other producers, however, there is no option. Starting January 1, 2019, the production reduction is mandatory. These private sector companies have no choice.

This is a shocking measure — similar in size to the state of Texas doing the same thing.

But as always, The Daily Edge has the best way for you to play the action…

It Seems Very Wrong, But It Is Probably Right

To appreciate how bad things have gotten, you need to understand that Alberta is Canada’s version of Texas.

I’m talking about big trucks, cowboy hats and very conservative politics.

In Canada, Alberta prides itself on being the home of the free market — the province of privatization.

Alberta is a hotbed for libertarianism and the view that less government equals better government.

So what happened? What has shocked the Alberta Government into this oil patch intervention?

The answer is that the Province was tired of seeing it most valuable commodity (oil) being given away almost for free.

In Alberta, the most common blend of oil produced is called Western Canadian Select (WCS).

This is a heavier blend of oil which means that it is denser and the refining process is more complex than it is for lighter blends.

In the month of October, WCS sold on average for $45.48 per barrel less than West Texas Intermediate (the most common American light oil blend).

That meant that for much of the last two months, Alberta producers have been selling their oil for not much more than $10 per barrel. That means that every company producing it is losing money.

The economic cost of giving away oil production at this price is enormous. Not just for all of the companies that are losing money on production, but for the province of Alberta as well.

It has been estimated that on an annual basis, the recent discount costs the province of Alberta $7.2 billion on production royalties, oil producers $5.3 billion on production sales, and the Canadian federal government $800 million for its royalty take.1

It is a ridiculous amount of money being lost for the sale of a commodity that is going for multiples more elsewhere.

The Government Action Taken And How We Can Profit From It

The cause of this massive problem for conservative Alberta is that the province is landlocked.

Being landlocked means that the province needs to ship its oil through pipelines that run through other provinces and American states.

As you are likely aware, these days getting major pipelines built has been virtually impossible. The political left and environmental groups keep putting up roadblock after roadblock.

With all pipelines out of Alberta already …read more