Trump’s Backdoor Power Play to Rein In the Fed

“Just run the presses – print money.”

That’s what President Donald Trump supposedly instructed his former chief economic adviser Gary Cohn to do in response to the budget deficit. The quote appears in Bob Woodward’s controversial book Fear: Trump in the White House.

Trump disputes many of the anecdotes Woodward assembled. But regardless of whether the President used those exact words, they do reflect an “easy money” philosophy that he has expressed many times before.

Trump Likes Low Rates, Loose Money

President Trump has described himself as a “low interest rate person.”

This past summer, Trump launched a very public attack on the Federal Reserve’s rate hiking campaign. He wants it to stop because it’s making the dollar “too strong” and threatening to undercut his tax cut fiscal stimulus.

There’s only so much dollar strength the U.S. economy and U.S. debt and equity markets can take. President Trump is keenly aware of the risks.

A Fed rate hike next week is a given at this point.

The Trump-versus-Fed feud will likely heat up again in December if the central bank raises its benchmark short-term rate at its scheduled policy meeting. Although a December hike is far from certain, Fed chair Jay Powell and company seem intent on raising interest rates again – and possibly a couple more times in 2019 if the markets don’t melt down before then.

Additional tightening will increasingly put the central bank on the wrong side of the President’s Twitter feed. If Donald J. Trump wants to put more than social media pressure on Fed officials, he can threaten to remove them.

Trump himself appointed Powell, a decision he now apparently regrets. It would be unprecedented for a president to fire a Fed chairman before his term is up… but not necessarily inconceivable. After all, President Trump has done a number of unprecedented things, as the anti-Trump media are wont to remind us.

Does the White House have the legal authority to remove Fed Board members? Apparently so. According to Section 10 of the Federal Reserve Act. “each [Board] member shall hold office for a term of fourteen years from the expiration of the term of his predecessor, unless sooner removed for cause by the President.”

If the President finds “cause,” then he can remove Fed policymakers. Such a backdoor power play would set off a political firestorm if Trump actually did it. But if he merely implied that he’s thinking about it, that might be enough to get some Fed officials to back down on another rate hike.

Trump Could Strike Back by Auditing the Fed

Another way Trump could strike back at the Fed is by reintroducing calls to audit the Federal Reserve’s books, as often urged by former Congressman Ron Paul. Trump had made “Audit the Fed” a part of his campaign platform in 2016. But since being sworn into office, he has neglected to push it.

Fed chair Jay Powell opposes an audit for obvious reasons. He opposes greater transparency to the public because that would threaten the Fed’s “independence.” That’s really just a code word …read more

Axel Merk Exclusive: Can You Sleep at Night When the Market Goes Against You?

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Mike Gleason: It is my privilege now to welcome in Axel Merk, President and Chief Investment Officer of Merk Investments and author of the book Sustainable Wealth. Axel is a well-known market commentator and money manager and is a highly sought after guest at financial conferences and at news outlets throughout the world. It’s great to have him back on with us.

Axel, it’s always a pleasure and thanks for joining us again.

Axel Merk: Great to be with you.

Mike Gleason: Well, before we get into other matters like Fed policy and the latest on trade wars and so forth, Axel, I figure a good place to start is with what appears to be a stock market that keeps acting like it’s coated in Teflon. Things just keep chugging along and we don’t ever seem to get the correction that many have been expecting. So should we give up on the idea of seeing a pullback in equities, Axel?

Axel Merk: Maybe. Maybe we should. And for full disclosure, I have been most cautious on the market. In recent weeks, I’ve actually become far more neutral, even taking a small equity position. And the reason is not so much that I want to throw in the towel. I look at it in the context of everything that I do. I actually think we’re in the late stages here of the economic expansion, but what we got is we got this enormous economic stimulus in the system and that does provide a tailwind, obviously, for earnings. The question, then, is, what’s going to derail that?

Now, I caution that most people have gone along for the ride and not taken chips off the table. And for anybody, I urge them to make sure that they should revisit what they have and then stress test their portfolios. But at the same time, when you have that stimulus here, that obviously is a factor. Now, at the other end of the spectrum, you have the global threats. As we talk, it’s the eve ahead of the European Central Bank meeting where Mr. Draghi is again going to say, “Hey, the global trade outlook is uncertain and the ECB is expected to downgrade its growth outlook.”

But let’s keep in mind that our Executive Branch does a lot of huffing and puffing, but when it comes to the real impact on the economy, trade is a fairly small segment of that. And while that uncertainty might reduce some investments, I do think it is more than compensated by this economic stimulus. Also, keep in mind even though interest rates have been going up, inflation keeps ticking up and so I don’t think that things have gotten tighter. Not only do I not think so, the metrics I look at, the easy access to credit hasn’t changed. And so, access to credit is abundant, and that means we’re going out full throttle on the economy. And while obviously we’ve had …read more

Are Silver and Gold ‘at the Flood’?

What a Bolivar buys – August 2018

There’s a lot to be said for reflecting deeply on the wisdom Brutus’ comments may portend. Do the directional arrows implied seem like a ‘fit’ for your belief about the state of things in today’s world, financially and politically? To your expectations, goals and resources? To your views on the metals’ supply-demand metrics?

Do you “have enough” metal right now to ’round out’ your position if this argument turns out in significant measure, to be correct?

Or are you still locked into “thinking mode” – hobbled by the opinions of the majority of market players currently crowded onto the same side of the proverbial investment boat, betting on still lower gold and silver prices?

Have you worked through the OODA Loop we discussed in earlier essays (see last month’s column

By David Smith, Money Metals Exchange

There is a tide in the affairs of men…

Thus, begins one of the most famous quotes ever uttered, taken from Shakespeare’s play, Julius Caesar. Brutus, talking to Cassius, says, “There is a tide in the affairs of men. Which taken at the flood, leads on to fortune…”

A flood tide takes place at the very crest in the water’s height. Once the “tide turns,” there is no stopping its ebb until, much later, it reaches an extended, even a minus low.

If you’re ashore in parts of Alaska, where a tide can run 20 feet, not embarking “at the flood” and waiting until it’s made an obvious turn can have important implications, leaving you and your craft high and dry.

The same applies in many areas in life, not least financial.

Shakespeare’s quote serves as a metaphor – a touchstone for deciding when, how, and even if to act on some particular circumstance in our lives.

It’s difficult, because though we may be certain we see a transformative event (or a series) in the process of taking place, there’s no way to know ahead of time how long or to what degree it may take.

In the case of the tightly-stretched “variance from the mean” in the market’s current opinion of where the precious metals are headed over the near to intermediate term, divining the outcome correctly in a timely manner could have decisive bottom-line consequences for those who decide to act… and for those who do not.

Even more important than trying to “score a quick profit,” if prices are making a major sustainable upside turn, those who have not established at least a core holding are likely to find themselves watching, waiting, and ultimately not participating at all as today’s levels recede in the rear-view mirror.

By the same token, waiting to buy until “it’s obvious” will lead to frustration if prices then move back into the large sideways action we’ve witnessed several times over the last few years.

By almost any measure, the precious metals’ sector is “stretched.”

Hedge fund silver shorts (betting on lower prices) – often a contrary indicator – are at all-time highs, as indicated by this chart:

Gold Commercial shorts – also a contrary indicator – are near all-time lows:

Physical gold and silver buying by China, India and Russia (gold) remain strong:

Palladium, often a “lead indicator” for the rest of the complex, has recently spiked $120 above its recent lows…

And platinum, which generally costs up to $300 an ounce more than gold, is trading at some of the largest ever recorded values below gold.

Trying to find an exact low in the price of any market is a losing proposition. But establishing holdings into a level which gives solid evidence of representing strong long-term value – well that’s an entirely different matter!

Brutus concludes his exchange with Cassius, remarking,

“Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the …read more

The Bullion Market

Bullion is any precious metal that is in the form of bars or ingots. It is usually used for trade in a market and comes from the original French word “bouillon” which means boiling. This was the term used to describe the activity of a melting metal.

Each Bullion varies when it comes to its value depending on its precious metal content which is determined by its purity and mass. To find out the purity of each gold bullion, they use the century-old method known as fire assay along with modern spectroscopic instrumentation to accurately determine its quality to ensure the owner receives fair market value for it. It is also weighed extremely accurately.

Understanding the bullion market

The bullion market is the avenue by which buyers and sellers can trade in gold or other precious metals. The London Bullion Market is known as the primary global bullion market trading platform for gold and silver.

The bullion market is where you can buy and sell your gold bullion or other precious metal ingots.  There are many bullion markets throughout the globe. These bullion markets are typically characterized as over the counter markets. Bullion markets exist in New York, Zurich, and Tokyo with London serving as the location for the largest global bullion market.

Bullion trade is considered to have a high turnover rate with transactions conducted over the phone or electronically, and its primary market is considered to be gold and silver. Gold and silver traded in the bullion market can sometimes be used as a safe-haven investment or hedge against inflation which may also affect its trading value.

The bullion market is one of several ways to invest in gold and precious metals. Other options like exchange-traded funds or mutual funds can also be good ways of investing in gold and precious metals.

Investment

The specifications of bullion prices are often regulated by legislation or market bodies. In the European Union, the minimum purity for gold bullion, which is treated as investment gold with regards to taxation, is 99.5% for gold bullion bars and 90% for bullion coins. You can choose to buy gold for many different investment reasons.

Most investors consider and use actual gold for a few reasons, one of which is that gold has proven to be a hedge against currency crisis, inflation risks, geopolitical risks, or to add diversification to an investment portfolio.

Conclusion

The Gold bullion market is the market by which buyers and sellers of gold and other precious metals trade and from which they gain profit.  Gold bullion has been considered a hedge against currency crisis, inflation risks, geopolitical risks, or to add diversification to an investment portfolio. Whatever the case, gold bullion has proven to be a worthy investment and has a high turnover rate, which is something investors also consider most when it comes to finding profit and returns. Like any other economic investment, the investor must always consider all the factors and the consequences of each of his decisions and hope that it will lead to good returns and profit …read more

What is a Gold IRA?

A Gold IRA is a type of retirement account by which physical gold or other precious metals are held in custody for the benefit of the IRA account owner. It works like a regular IRA but instead of using paper assets, The IRA holds bullions and coins. So basically, Gold IRA is a type of investment vehicle used to save for retirement by buying or holding gold bullions and other approved precious metals. with your traditional or Roth IRA, you stash your savings in the form of stocks, bonds or mutual funds.  In a Gold IRA, you use precious metals. You can also own many other precious metals aside from gold, examples of which are silver, palladium, and platinum.

This also allows you to invest in other gold-related options like stock in gold mining companies, precious metals mutual funds, precious metals commodity futures or Exchange Traded Funds (ETF).

How to get Gold IRA

Not all precious metals and gold can qualify for an IRA. These metals will have to meet IRA standards. If you have metals that you wish to deposit but have not been checked or approved, you might get rejected. Some accepted forms are the gold and silver American Eagle and Canadian Maple Leaf coins, the Austrian Philharmonic coin, PAMP Suisse Gold bars, Sunshine Gold and Silver Bars and most platinum bars. To get a Gold IRA, you will need a custodian to hold and provide the account for you. This is because the gold will be deposited into an IRS-approved depository and not a regular savings account. So to find an approved custodian, you can go to your nearest bank, credit union, trust company or brokerage firm and acquire a custodian for your gold.  Of course, you would want a qualified custodian you can trust with your asset and not just any company or person.

Weighing the costs: Pros and cons

One of the benefits of holding or owning physical gold or gold IRA is that it adds diversity to your retirement portfolio. Having this type of investment provides security for you and your money in the event of an economic meltdown or should stocks go south. Gold has already proven to be a considerable hedge against inflation, unlike stocks and bonds. One of the major cons could be the requirement to find a trustworthy custodian rather than just committing to the first person you meet. Another risk of having a gold IRA is the instability surrounding gold mines or companies. Other investors also dislike that gold IRAs don’t pay dividends.  One good thing is that your gold or precious metals are insured up to a certain amount when kept by the custodian which gives you a safer investment.  Some advisors say that you would be better off with an account that pays dividends.  Bottom line is to think everything through and spend more time understanding the economic decision you are making.  This will not only ensure wise decision making but allow you to plan your investment portfolio properly.

…read more

Precious Metal Funds – an Amazing Investment

Gold and other precious metals have proven to be a hedge against economic meltdown or turmoil and are considered a safety spot during a stock market storm. These types of investments tend to grow in the event that stocks fall short.

Gold and Market Meltdown

Beside the benefits of having a diverse investment portfolio when you choose to invest in Gold, Gold itself is betting against the dollar because it is a fiat currency without any commodity backing. Meaning, when the value of the dollar declines, the value of Gold tends to shoot up. Gold also has a correlation with the stock market. These two always tend to go in opposite directions as well. There are multiple ways to measure the risk of a mutual fund: one way is through an indicator known as R-squared. This measures how faithfully an investment follows an index.

Another way to measure the riskiness of an investment is through beta. This is a measure that analyzes the market risk of a fund. It shows how responsive the fund is to a given market index such as the S&P 500 or the Barclays Capital Aggregate Bond Index.

Stocks generally will have terrible performance when inflationary pressures are feared. This, on the other hand, becomes a wonderful avenue for gold investments.

How to choose your very precious metals fund

Most advisers explain that the reasons gold and precious metals are good in a bear market also make them historically bad in a bull market. Their volatility can help or hurt a portfolio, so they must be used wisely so not to destroy your investment. Most of these advisers would consider precious metals as seasoning rather the meat itself of your portfolio. In selecting a fund, the usual criteria should apply, according to advisers. A fund should have at least a five-year record, and the manager should have a long record in running a precious metals portfolio. The fund should also have a long record so that one can see how it performed in both a bear and a bull market, and it should be compared with other funds in its category.

Conclusion

So like in any other major financial decision or investment, proper understanding and trust in the company or person you are leaving your asset with is a must. These types of investment could most likely be considered as seasoning to your main course rather than being the main dish itself to balance out your investment portfolio.

…read more

5 Reasons to Buy Silver instead of Gold

Is silver really better than gold? Why should someone buy silver instead of buying gold? What potentials does silver have as an investment? All these questions will be answered right here. It is natural of an investor to be curious and want to discover if one type of asset is better than another. This is particularly true when it comes to silver and gold since both markets generally differ in size.

Money in silver

Silver isn’t part of our currency, yet it is still considered of value along with gold. One evidence is that this cannot be generated easily and thus depreciates like paper or digital forms. And by real money, we do mean physical silver—not ETFs or certificates or futures contracts.

Here’s why silver and gold has potential value,

They have never been defaulted on.
They have no counter party risk.
They have long term use as money.

So as a general overview, owning physical silver gives you a real asset that has served as money for thousands of years.

Silver is practical for small purchases

Silver itself is not cheap to buy but can be more practical when you want to use it. Perhaps you don’t want to use a full ounce of gold to meet a small financial need, hence silver could be of more potential value. Since it frequently comes in smaller denominations than gold, you can sell only what you want or need at the time.

Silver outperforms gold in bull markets

The market for silver is so small, in fact, that a little money moving into or out of the industry can impact the price to a much greater degree than other assets which include gold itself. This higher volatility rate also signifies that in bear markets, silver falls more than gold but soars further and higher than gold in bull markets.

Global demand is growing

World demand for silver is already growing.  Almost all major government mints have seen record levels of sales, with most already operating at peak production. Rising demand, especially in China and India, is very evident in today’s world. Both countries have very long histories when it comes to an affinity with precious metals. Thus, since these surging demands don’t happen so often, there will be consequences later when rising demands meet low supply.

Silver is a hard asset

There are a limited number of investments that you can hold in your hand, silver and gold are one of them.

The markets are full of paper profits, digital trading, and currency creation. However, this is in contrast with gold and silver investment options as these are one of the rare few you can store, hold or even have in your pocket. And it can be as private and confidential as you want. Physical silver is also a tangible hedge against all forms of hacking and cybercrime.

So generally these are some of the reasons why silver is generally better than gold and why investing in silver is also a good option, not only does it diversify your portfolio, it also has many more benefits along with …read more

Growing job market in the U.S.

Before we dive in let’s first understand the basics. Now, what is the job market? Well in simple terms, the job market is the market in which employers search for employees and employees search for jobs. The job market is also directly related to unemployment. The higher the unemployment rate, the greater the supply of labor in the overall job market. When employers have a larger pool of applicants to choose from, they can be pickier or force down wages. As the unemployment rate drops employers are forced to compete more heavily for available workers, which has the effect of increasing wages. During the past months, we have seen a steady rise in the job market under the Trump administration. This includes the generating of new jobs which would then affect unemployment rates. Other analysts suggest that this could be one of the great effects from his pull out from the Iran nuclear deal where the P5+1 namely China, France, Russia, the United Kingdom, and the United States; plus Germany will not impose new sanctions on Iran and will remove existing sanctions on Oil, precious metals, auto parts and petrochemical products. And therefore, President Donald Trump’s decision of leaving the deal must have affected the job market as well.

Now let us talk about the job market and other industries that have been affected as well.

The job market and job growth

Job growth is the figure measure by the bureau of labor and statistics to gauge how many jobs have been created on a monthly basis. The bureau determines this through a survey or a number of surveys and the results are then published every month. Jobs growth data can be found in many places since it is such a popular test of the nation’s economic well-being. The data is available on the Bureau of Labor Statistics website, as well as in the Employment Situation Summary issued by the Bureau of Labor Statistics each month. This will gauge how well a nation is doing. A job growth figure between 100,000 and 150,000 new jobs per month is considered to be the minimum level of job growth needed to mitigate the effects of new entrants to the workforce.

Oil and the job market

Oil plays an important role in many businesses, specifically that of the costs of other production and manufacturing across the United States. For example, there is a direct relationship between the cost of gasoline or fuel prices in the transportation of goods and people. When Trump pulled out of the Iran nuclear deal, this also meant the loss of 500k barrels of oil due to the cancelation of trade with the said country. Now, oil companies would then have to search for new oil deposits to recover from its losses and meet the rising demand for oil. So the generation of new companies and expansion of existing companies also started the pulse for new job opportunities.

Increase in the job market

Besides that of oil and gas, other industries are also on the …read more

Gold & Silver Investors’ 8 Commandments for Avoiding Rip Offs

For every promising investment opportunity, you come across, there are multiple opportunities for bad-faith brokers and hucksters to try to rip you off.

It could be undisclosed commissions and fees in an annuity, unwanted accounts opened up by a banker seeking additional fees, trades sabotaged by market manipulators, or any number of other schemes.

Rip-off artists, unfortunately, operate within the precious metals space as well.

Most recently, a scammer posing as a government agent in order to gain people’s trust was convicted of selling counterfeit gold bars and phony Morgan silver dollars. He took one investor for $11,000, according to reports.

You can avoid this type of scam as well as other common cheats when buying or selling precious by heeding the following guidelines.

Avoid “Too Good to Be True” Deals

If a price on a bullion product sounds too good to be true – or comes with exorbitant incentives or exaggerated claims – you should be suspicious.

Gold and silver bullion products do not legitimately sell below spot prices. Individuals holding precious metals can visit a dealer and sell items immediately, for full value. Given that everyone has this option, it is highly likely anyone offering items well below actual value is trying to stick it to you.

Legitimate dealers cannot afford to offer items way below cost either. Dealers must charge small premiums above spot prices to reflect product minting costs and the costs of doing business. (One notable exception: 90% silver U.S. coins minted prior to 1965 (aka “junk” silver) which exhibit significant wear occasionally become available at melt value or even slightly lower.)

Choose a Reputable Dealer and Use Extreme Care Buying from Unknown Parties Online

Find a reputable dealer who offers prompt, reliable service, and fair prices. Customers who buy based solely on slick advertisements or low quoted prices risk getting left holding the bag when that dealer fails to deliver.

Every so often a dealer will come along that tries to undercut the industry with super-low prices. Only a few years back a “low price leader” called Tulving & Company went bust. A similar blow up occurred at the Northwest Territorial Mint in 2016.

In both cases, warning signs included delivery delays and rising customer complaints. A slew of customers ultimately lost tens millions of dollars when their orders went undelivered.

Bottom line – receiving actual delivery of your metals is way more important than getting the lowest price!

Take a few minutes to investigate a dealer’s online reputation before ordering. You should also expect the dealer to provide a firm estimate as to when the order will ship when the order is placed.

Avoid eBay, Craigslist, and Other Online Bulletin Boards

You may be tempted to peruse sources such as eBay, Craigslist, or flea markets to try to find hidden bargains. But all too often, the only ”hot deals” being offered are from sellers with questionable or poor reputations.

Auction sites, including eBay, charge significant fees to the seller. That means reputable dealers must charge very high prices within that platform – passing along the fees …read more

Oil Prices and its effects on the U.S. Economy

Oil Prices have a great effect on the U.S. economy in many forms like jobs, investment, and growth. Oil exploration and production. Fluctuations in Oil prices play an important role in the different aspects of finance and business. That is why oil price movements are closely watched by economists, investors, and policymakers.

The U.S., although produces its own oil, still has the need to import more to meet the growing energy demands. New technology allowed companies to economically draw oil and gas from shale deposits that were once considered depleted because the cost of extraction would be impractical.

Oil and Business

Oil plays an important role in many businesses, specifically that of the costs of other production and manufacturing across the United States. As an example, there is a direct relationship between the overall cost of goods and the cost of gasoline or fuel prices in the transportation of goods and people. A drop in fuel prices means lower transport costs and cheaper airline tickets. As many industrial chemicals are refined from oil, lower oil prices benefit the manufacturing sector.

Conversely, high oil prices add to the costs of doing business. These costs are also ultimately passed on to customers and businesses. Whether it is higher cab fares, more expensive airline tickets, higher prices on imported goods and many more. That being said, oil prices do have an effect on seemingly unrelated products and services throughout the U.S.

Oil and Inflation

Rising Oil prices can also influence inflation, as is said in the previous paragraph, businesses will tend to push the increasing cost of oil that affect their businesses to their customer, hence make commodities fluctuate in prices. This type of inflation is what we call as a cost-push inflation by which businesses will inevitably pass on the weight of rising oil prices to customers which cause commodities to rise in prices. Because oil is a determinant of inflation, this also has an effect on cash holding, interest rates and many other aspects of the economy.

Job Growth and Investment Dollars

The exploration of new sources and production of shale deposits have become a strong source of job growth in the U.S. The hydraulically fractured wells tend to have a shorter production life, so there is always new drilling activity to find the next deposit. All this activity requires labor including drilling crews, loader operators, truck drivers, diesel mechanics, and so on. Plus, these workers also help support the local businesses surrounding the area like hotels, restaurants, and car dealerships. Lower oil prices mean less drilling, therefore less work and job opportunities. Consequently, this also means less activity can lead to layoffs which can hurt the local businesses that catered to these workers.

The Banking and investment sector also feel the effects of fluctuating oil prices. There are a lot of different companies drilling and servicing wells on the shale deposits, and many of these companies finance their operations by raising capital and taking on debt. This means that investors and banks both have money to lose if the …read more

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.

…read more

Sound Money Needed Now More Than Ever

National Debt from 1940 to 2008 graph

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 …read more