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Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher
Currency Wars Have Entered the Next Phase, Gold and Silver Will Move Higher
Gold is trading solidly above the $1500 mark at the time of writing, and I believe we are only just getting started. The currency wars are back in full swing, and they will be more intense than ever.
The United States government, ironically, labeled China a currency manipulator for the first time since 1994, marking a severe uptick in their rhetoric against the Chinese government, as the trade wars continue to spiral out of control with seemingly no end in sight.
Many simply waved this move off as nothing more than what it initially appeared to be: jawboning with no true ramifications behind it. However, others see it as a blatant threat by the U.S. administration against China, as the last time this language was used twenty-five years ago was when China was placed on a currency blacklist.
Some were surprised by this move, as they see it as an overreaction, fearing that we have now moved into another phase of the ongoing currency wars that have bubbled behind the scenes for years—currency wars that are now in plain sight for all to see.
Unfortunately, this should come as no surprise to anyone, as President Trump stated back in 2016 that he fully intended to label China a “currency manipulator”, a statement that was laughed off until now.
This move comes on the heels of a Fed interest rate cut in which the Fed Chief, Jerome Powell, lowered rates by 0.25%, citing fears of a weakening global economy and ongoing trade wars.
Of course, China is far from the only currency manipulator in the world, as countries are constantly “racing to the bottom” in an attempt to lower the value of their currencies. This increases their competitiveness on the international markets by artificially making the prices of their goods lower.
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Peter Schiff: If You Understood What This Means, You Would Be Buying Gold as Fast as You Can
Peter Schiff: If You Understood What This Means, You Would Be Buying Gold as Fast as You Can
Gold has risen to six-year highs in recent weeks as the Federal Reserve has pivoted back toward an easy-money monetary policy. Markets widely anticipate a Federal Reserve interest rate cut this week and the economy appears to be slowing.
Peter Schiff recently appeared on RT Boom Bust to explain why he believes this is the beginning of a much bigger long-term rise in the price of gold. And it’s not just because the Fed is cutting rates.
In fact, they are going to cut rates next week and this is going to be the first step on the road back to zero. And the Fed is also going to return to quantitative easing. But we just found out that Donald Trump is cutting a deal with a Democrats to basically throw out any progress Republicans made back in 2011, thanks to efforts of the Tea Party, to at least try to rein in the increase in government spending. So, they’re throwing caution to the wind. We are going to see deficits going through the roof over the next several years, and that’s even without the recession, which I believe is coming and which is going to make them much, much worse.”
Consider that in the midst of what is supposed to be a strong economy, we’re already seeing record-setting deficits. As Peter pointed out, bigger deficits mean more money-printing and that means more inflation.
All of this is very bullish for gold … If you understood what all of this means, you would be buying gold as fast as you can.”
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Somebody’ Finally Cares About Gold
Somebody’ Finally Cares About Gold
Grant Williams pithily summed up the situation that has been plaguing gold since 2013: Nobody Cares.
Yes, it’s highly likely that the price has been suppressed. But not enough buyers cared to fight the bullion bank/central bank cartel or make life difficult enough for the politicians — and thus, the regulators — to change things.
So gold languished. For years.
But last August, gold quietly entered a bull market after breaking above $1200.
As the price began rising (for both fundamental & technical reasons), we’ve been tracking its progress closely. We do so on a daily basis via Peak Prosperity’s Precious Metals Daily Commentary updates (outstandingly authored by user davefairtex), as key developments happened via our premium reports (like this prediction), and via expert interviews such as our recent in-depth discussions with TFMetals and Incrementum’s Ronni Stoeferle.
As we entered 2019, the increasingly dovish/desperate policy retracements of the central banks — which now appear will NEVER normalize their balance sheets — have boosted the bull run.
Lower real interest rates are gold price-positive. And not only are real rates falling right now, there’s alreadycurrently $12 trillion in negative *nominal* debt trading worldwide right now:
And based on this week’s further dovish announcements from both the Fed and the ECB, we can expect more $trillions to be added to that pile soon.
On Tuesday, Mario Draghi apparently went rogue on his fellow policymakers and launched into a swan song version of his all-time hit “Whatever it takes”. The next day, Jerome Powell at the Fed confirmed his willingness to ease and let the market know he stands ready to cut rates multiple times over the next year.
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Getting rid of Debt: How About Replacing Money with Social Credit?
Getting rid of Debt: How About Replacing Money with Social Credit?
Mark Twain had a genial idea with his story “The One Million Pound Bank Note” published in 1853. It was such a huge amount of money that it couldn’t be exchanged, yet it gave its owner all sorts of perks and goods. It was, in a certain way, an anticipation of what we call today the “social credit score” obtained on the various social media services on the Web. It is a form of money that can be owned, but cannot be exchanged — in most cases, you can’t even go negative with your social credit. So, no debt, no bankruptcy. Would it be possible to build a financial system based on this concept? Not easy, but also an idea being examined nowadays, especially in China with their state-owned social credit system (shèhuì xìnyòng tǐxì). The text below is derived from the chapter on financial collapses of my new book “The Seneca Strategy,” to be published in later 2019.
The whole problem of financial collapses is the result of the existence of money. But what is money exactly? Without going into the various theories of money that economists are still discussing, we can say that once, money was something that everybody agreed on: a weight of precious metals. After all, the British currency is still defined in units of weight, even though one pound (in monetary terms) does not weigh a pound (in physical terms). Still, up to not too long ago, money was simply a token representing a physical entity, typically a certain weight of gold and silver. But things changed a lot with time and, with the 20th century, the convertibility of the dollar into precious metals was more theoretical than real. In 1971 president Nixon formally canceled it.
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Liberty Under Attack: Gold and Silver Fall?!
Liberty Under Attack: Gold and Silver Fall?!
Image Source, via Ruptly
On a day like today, the irony of gold and silver losing key psychological support levels is beyond ironic, it is ludicrous.
Unless you are living under a rock, then you will have heard that after seven years of hiding out in the Ecuadorian Embassy, Julian Assange, the founder and head of Wikileaks, was forced out of asylum and arrested by the UK government.
This move, highly anticipated for days, caused a sudden flood of emotions, with some supporting the arrest and others screaming out in rage and shock as they watched a disheveled Assange being dragged out of the Embassy and thrown into an awaiting police vehicle.
His appearance once again raised concerns about his well-being and health, as many of his supporters have worried about the damage the last seven years of confinement have done to his mental health.
These concerns appeared to be valid, as Julian Assange without a doubt looked absolutely horrible.
Whether or not you support Julian Assange and Wikileaks likely depends on the way the political winds are currently blowing.
I remember well the entirety of the Assange saga and the work that Wikileaks has done throughout the years, exposing such things as the ” Iraq War Logs” and the “leaked State Department cables“.
These two very prominent leaks exposed a deep level of corruption within the U.S. government, and thus Assange became an enemy of the United States bureaucrats and the deep state.
The first major leak made Assange a hero to the left, as it greatly damaged President Bush and the Republican party of the time by exposing the violent acts of torture the military was committing overseas.
The second major leak saw the political winds change, blowing them in another direction.
Turning the left, who once idolized Assange, against him.
…click on the above link to read the rest of the article…
One Day the Volcano Will Erupt – Precious Metals Supply and Demand
One Day the Volcano Will Erupt – Precious Metals Supply and Demand
Keynesian Rot
The prices of the monetary metals rose $11 and ¢27 last week. The supply and demand fundamentals is the shortest section of this Report [ed note: we are excerpting the supply-demand section for Acting Man – readers interested in the other part of the report can find it here].
The eruption of Mt. St. Helens in 1980 – prior to the cataclysmic event, numerous small earth quakes and steam venting from fissures warned that something big was about to happen, even if no-one suspected the actual magnitude of the outbreak. The eruption was so powerful that a fairly large chunk of the mountain went missing in the proceedings. There are always accidents waiting to happen out there somewhere, and the modern-day fiat money system is clearly one of them. There will be warning signals before it keels over – in fact, the final cataclysm usually happens fairly quickly, while the period that leads up to it tends to be a drawn-out affair. [PT]
This is because the actual data can be seen in a simple chart for each metal. If central banks were really buying mass quantities of gold in anticipation of a new gold-based global monetary system, or India were really importing all marketable gold, or the mainstream American public were desperately trading its dollars for gold, or China were really buying up all the physical gold to prepare for a gold-backed yuan (while selling paper gold, natch)…
…then the data would show this.
Mount Saint Helens was quiescent for a long time, until all of a sudden in 1980 it went wild with activity. There was an earthquake, then steam venting, then the side of the mountain began to bulge, then a second earthquake triggered that side to collapse. Then the volcano finally exploded.
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Fables, Fairy Tales and the Gold Standard
Fables, Fairy Tales and the Gold Standard
President Trump often tweets about the strength and health of the U.S. economy, and two weeks ago, he tweeted that the U.S. economy was the Gold Standard throughout the World.
The fact that Trump capitalized the words “Gold Standard” may have piqued the interest of those who believe in sound money principles. Trump has in fact spoken in the past about a return to the Gold Standard, and some of the issues surrounding this are summarized in an October 2018 article: Trump Puts Gold Standard On The Table.
A simple interpretation of Trump’s tweet means that the U.S. economy is the envy of the world, the benchmark by which other economies measure themselves.
Nevertheless, Trump’s tweet can be viewed as valid in another way, whether this interpretation was intended or not. When the U.S. dollar was de-linked from the value of gold in 1971, the U.S. dollar and its economy became the Gold Standard. The U.S. dollar is the primary reserve currency throughout the world, and therefore almost everything bought or sold in the world has a reference point to the value of the dollar.
The value of the dollar is related to the health of the U.S. economy, and the U.S. economy, absent a “real” gold standard, IS the monetary standard throughout the world.
We are not suggesting that Trump will help navigate the world back to a Gold Standard, and any political, strategic or tactical discussions on that point are above our pay grade. In fact, we prefer to summarize our understanding of the gold market by way of two children’s stories.
Fables and Fairy Tales
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Gold is money, everything else is credit
Gold is money, everything else is credit
People have been obsessed with gold since the beginning of civilization. Both the Egyptians and ancient Greeks valued the precious metal as a status symbol. The more gold you had, the higher you ranked in the natural order of things. In more recent times, gold rushes in Alaska and South Africa have caused major frenzies while changing lives.
People have a natural affinity for shiny things, which makes them desire gold and silver for its beauty. Especially gold, which is a simple, fairly boring metal that can be melted and formed into any desirable form. In many struggling countries, such as India, even the poorest citizens crave gold jewelry.
Prior to paper currency, the actual precious metal was used in trade. A certain amount of gold was assigned a certain value and used in exchange for some other commodity. Since gold and silver were easy to carry, the system worked well, involving the trade of equal commodities.
When governments began to mint currencies, gold and silver became natural choices. Their very rarity, especially gold, gave them an inherent value. People could trust the value of gold and silver. Slowly, however, beginning in the 1930s, world governments were no longer linking their currency to gold. The US dollar stopped being backed by gold in the 1970s. Instead of being backed by true value, word currencies became pieces of paper.
The role of gold changed from a trusted trading currency to a safe investment haven. Investors rely on the fact that while the value of paper currency will fluctuate, gold and silver will hold their value. Precious metals require no guarantees. As currencies lost their gold-backing, global central banks began purchasing and hoarding gold as a reserve currency whose value has been recognized throughout history.
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NEW ERA OF THE MODERN PRECIOUS METALS INVESTOR: The Coming Pension Fund Disaster
NEW ERA OF THE MODERN PRECIOUS METALS INVESTOR: The Coming Pension Fund Disaster
Get ready for a new era of precious metals investor. That’s correct. Up until now, the primary buyer of gold and silver have been the older generation, 40-65+, but that will all change when the next financial crisis hits. The Millennials, or those in the 23-38 age group, have participated less in the stock market than previous generations. And, rightly so.
According to one study, Millennials preferred cash (30%) as their largest investment over stocks (23%). This should be no surprise as the older Millennials have experienced two market crashes, the dotcom NASDAQ crash and the 2008 market meltdown within a decade. Furthermore, the Millennials are likely very concerned and worried about the massive underlying debt and leverage in the system. Of course, it is probably true that most Millennials don’t understand the details of the financial markets, but have an excellent innate ability to recognize that SOMETHING IS SERIOUSLY WRONG.
In my newest video update, New-Age Precious Metals Investor: Pension Fund Disaster, I discuss how surprised I was to learn that the largest age group that followed the SRSrocco Report website were the Millenials, not the older generation. Now if that wasn’t surprising enough, the next largest group of readers came from an even younger group, aged 18-24:
The chart comes from my Google Analytics dashboard so that you can thank Google for that statistic. How on earth does Google know the demographics of my website, that is a subject matter for another day? Regardless, while the mainstream media suggests that the younger generation are less interested in finances and politics, I actually believe they are hungry for GOOD INFORMATION. Unfortunately, they will not find quality information in the mainstream press. Which is precisely why many of the Millennials are quite concerned about the future and continue to question everything.
…click on the above link to read the rest of the article…
Demand for Physical Gold & Silver Bullion Increase As Geopolitical Tensions Erupt Around the World
Demand for Physical Gold & Silver Bullion Increase As Geopolitical Tensions Erupt Around the World
You can sense it. You can feel it.
The tension in the air is all around us, and it’s not just isolated to one country. Rather, it is a global phenomenon.
Geopolitical angst is rising as trade wars rage across the globe, with countries picking sides and either moving radically to the left or to the right, with all middle ground rapidly evaporating.
This is a recipe for disaster, and we are soon to enter a period of incredible turmoil and unrest, as people become more and more desperate to assert their political will over their opponents, no matter the cost.
This will, as it always has, lead to great political upheaval, upending the proverbial apple cart in the process.
We already see this unfolding in politics all over the world, as people take more and more extreme measures, forgoing the traditional means of change and adopting more radical approaches.
Look at Venezuela, look at France, look at the United States. Change is happening, and it is happening fast.
Now more than ever, it is vital to protect yourself, to take personal liberty over your finances and to prepare for the hard times that are soon to be upon us.
There are many steps that could be taken to mitigate the risks coming to you and your family. However, first and foremost is the acquisition of gold and silver bullion, both of which are tried, tested and true ways of preserving your wealth in times of increased tension and chaos.
I personally believe that taking physical possession of your precious metals is the first step in this process. This is an insurance policy that has worked for thousands of years, getting people through some of hardest times in human history.
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