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The total U.S. public debt hit a new record high of $21.145 trillion on the last day in May. As the U.S. debt increased, so did the interest expense which jumped by more than $26 billion in the first seven months of the fiscal year. That’s correct; the United States government forked out an additional $26 billion to service its debt (Oct.-Apr) versus the same period last year.

While the U.S. debt reached a new high on May 31st, it took nearly two months to do it. Let me explain. During tax season, the total U.S. public debt actually declined from a peak of $21.135 trillion on April 10th to a low of $21.033 trillion on May 3rd. Since then, the U.S. debt has been steadily moving higher (including some daily fluctuations):

If you spend some time on the TreasuryDirect.gov site, you will see that the total public debt doesn’t go up in a straight line. There are days or weeks where the total debt declines. However, the overall trend is higher.

Now, a rising debt level impacts the interest the U.S. Treasury must pay on this debt… especially when the average interest rate also increases. According to the TreasuryDirect.gov, the interest expense rose from $257.3 billion (Oct-Apr) 2017 to $283.6 billion (Oct-Apr) this year:

As I mentioned, the U.S. government paid an additional $26 billion to service the debt than it did last year. Now, $26 billion may not seem like a lot of money these days, but it could buy the total global Registered Silver inventory:

Thus, the extra $26 billion paid by the U.S. Treasury to service its debt would have purchased the 1+ billion ounces of silver held in the COMEX (270 million oz) and all the Global Silver ETFs. And, this would include the 138 million oz of silver supposedly stored at the JP Morgan vaults.

…click on the above link to read the rest of the article…

Petroyuan is Only the Beginning, Pop Goes the Metals Market

May 25, 2018

Petroyuan is Only the Beginning, Pop Goes the Metals Market

No boom today. Boom tomorrow. There’s always a boom tomorrow”

— Susan Ivanova “Babylon 5”

When Hong Kong Exchanges and Clearing (HKEX) bought the London Metals exchange in 2012 all the speculation about about the effects on gold trading. The primary reason for buying the LME was to obtain its warehouses and ensure a free flow of metals to points east.

What it also did was give them control over what type and kind of futures contracts could be traded on their exchanges. No longer would the west control this very important part of the precious and industrial metal supply chain.

Now we’re seeing the next evolution of the power of owning the exchange. After successfully launching a yuan-denominated gold futures contract last year, the LME is now preparing to issue a range of yuan-denominated metals futures.

In other words… Boom.

First Rule: Do No Harm

When China bought the LME the usual suspects in the contrarian investing community talked about the coming apocalypse for the bullion banks. It never happened. In fact, China was in a position to help them cap the price of gold and extend the gold bear market for the past six years while it and its strategic partners, namely Russia, accumulated vast quantities of the world’s most important metal.

The Chinese were smart. Take over the LME and, for a while, change nothing. Don’t upset the apple cart and allow markets to operate mostly normally. Now their ownership of the LME is not an issue.

Until now. First gold trading in Yuan. Now the rest of the metals.

We’ve all been breathlessly focused on how strong the so-called ‘petroyuan’ oil futures contract has been for the Shanghai Exchange. It has captured more than 12% of the total oil futures market in just under two months. That’s incredible.

…click on the above link to read the rest of the article…

Wealth Preservation: Understanding Silver and Gold Content for Collapse Investing

May 11, 2018

Wealth Preservation: Understanding Silver and Gold Content for Collapse Investing

Investing in precious metals is a great way to diversify and preserve your wealth. You can even find it on eBay! While this article is by no means an exhaustive treatise on gold and silver buying, it is more of a “primer” to give you some basic information you need to get started (if you plan on going into this area) or to provide knowledge to arm you in your dealings with people. Some of this may be useful for you in purchases of precious metals, but the scope of this is mainly to cover things that you may find when out hunting in the flea markets, thrift stores, yard sales, or other areas of the “secondary shops.”

First, we’ll cover gold measured in terms of purity that is expressed in karats, symbolized by the letter “K” and “kt” with jewelers.

24 Karat 100%, or pure gold

22 Karat 91.7% gold

18 Karat 75.0% gold

14 Karat 58.3% gold

10 Karat 41.7% gold

Now let’s cover silver, a metal marked with a purity mark. Here are the marks and their percentage of silver contents that correspond:

999 99.9% silver

958 95.8% silver

925 92.5% silver (known as Sterling silver)

800 80.0% silver

We are referring mostly to jewelry or decorative pieces and keepsakes here (such as silverware, candlestick holders, or other things that may bear a stamp to show their precious metal content). Coins are a little bit more involved and beyond the scope of this article, as there are too many to list here.

One of the problems that people run into with jewelry and their great-grandmother’s candlestick holders is that most businesses that buy them will usually pay according to their melt value. This is especially true with silver. Most of these dealers will estimate the silver content of your item by weight, and then will pay you roughly 15-25% under value to cover their handling and melting charges.

Learn how to test your junk gold and silver

…click on the above link to read the rest of the article…

The Two Most Important Reasons To Invest In Gold & Silver

May 8, 2018

The Two Most Important Reasons To Invest In Gold & Silver

As the markets and financial system continue to be propped up by an ever-increasing amount of debt and leverage, precious metals investors need to understand the two most important reasons to invest in gold and silver. While one of the reasons to own precious metals is understood by many in the alternative media community, the more important critical factor is not.

The motivation to write this article is due to the increasing amount of negative sentiment and comments in regards to precious metals analysis and investing. There’s a very interesting notion put forth by many commenters that the precious metals analysts and dealers are the frauds and charlatans, not Wall Street or the Central Banks. I imagine they believe this because gold and silver prices haven’t performed as forecasted or compared to the insanely inflated stock, real estate, and crypto markets.

Before I discuss the two important reasons to own precious metals, I would like to provide some information about the fraud and corruption taking place in the financial industry.

Now, it is true that a few precious metals dealers have defrauded investors, but this is true with all sectors and markets in the financial industry. However, investors frustrated with the precious metals tend to forget the massive amount of fraud and losses that took place as a result of the 2008 Housing and Investment Banking collapse.

For example, according to the article, Financial Crisis Bank Fines Hit Record 10 Years After The Market Collapse:

$150 billion (127.6 billion euros) – that’s how much US authorities have collected in fines from financial institutions for shady dealings with subprime mortgages since the beginning of the credit crisis in 2007, according to research by the British business daily Financial Times (FT).

…click on the above link to read the rest of the article…

Paper Gold Market Normalizing, Silver Getting Even More Extreme

May 7, 2018

Paper Gold Market Normalizing, Silver Getting Even More Extreme

The past few months have seen some unusual, maybe even unique, developments in the gold and silver futures markets, with gold becoming extremely bearish and silver almost ridiculously bullish.

Neither imbalance has amounted to much in terms of price action, so it’s not clear whether the most recent changes matter. Still, the action in both gold and silver futures remains unusual enough to bear watching.

Beginning with gold, large speculators have lately been hyper-bullish and commercials extremely bearish. Since the former tend to be wrong at the extremes and the latter right, that was disturbing for anyone who didn’t like the idea of gold tanking in the short term.

Gold did fall a bit lately, to the low $1,300s, and that seems to have been enough to cause futures players to start unwinding their extreme positions. Speculators cut their net long bets by about 30,000 contracts and commercials cut their net shorts by a similar amount, which in the scheme of things is a big change. Another few weeks like this and both speculators and commercials will be close to neutral, which is positive for gold’s price going forward.

But silver has been and remains the really interesting case. Speculators – who are almost never net-short – spent a few weeks in that state before briefly reverting to slightly net long. But last week they jumped back to net-short in a big way (the bottom row shows the change in each position).

Here’s the action presented in graphical form, with the gray bars representing large speculators. Note how in the previous couple of cycles (early and late 2017) the speculators’ net positions got close to zero but then bounced back quickly to the more normal net-long. But in the current cycle they’ve been net-short for most of the past two months.

…click on the above link to read the rest of the article…

TOM CLOUD UPDATE: Rising Interest Rates To Impact The Metals & Large Investors Make Up 70% Of Gold & Silver Buying

May 3, 2018

TOM CLOUD UPDATE: Rising Interest Rates To Impact The Metals & Large Investors Make Up 70% Of Gold & Silver Buying

Today, Tom Cloud provided another interesting precious metals update. He discusses how rising interest rates will impact the precious metals and why the Federal Reserve is forced to continue increasing rates. Tom also explains what is going on with official gold reserves in China and Russia.

Tom also mentions how his precious metals sales volume has changed since 2007. I spoke with Tom on the phone this week to get an update as he hears a lot of what is going on in the industry. I asked him if he could look at his precious metals sales figures and see how the small and larger investor buying volume has changed:

If you look at the chart below, the smaller precious metals investor had, the larger pie in gold and silver volume during the 2007-2009 period. According to Tom’s sales figures, the small investor, $50,000 or less, accounted for 62% of total volume while the large investor was 38%. This trend changed in the next period, 2013-2017 as the large investor made up 58% of total volume while the small investor fell to 42%.

Tom said that so far this year, the large investor accounted for 70% (or more) of total precious metals sales as smaller investor buying fell further to only 30%. So, the little guy is not participating in the precious metals market as they were in 2007-2009 when the stock and economy was disintegrating.

However, the larger gold and silver buyer is usually the wiser investor. The small investor is more fickle and has to wait until panic comes back into the market before they start buying once again. Furthermore, the small investor is also the one that loses faith much easier and is known to flip-flop by getting out frustrations by writing negative comments about gold and silver.

…click on the above link to read the rest of the article…

Why Gold & Silver Won’t Crash Along With The Stock Markets

April 30, 2018

Why Gold & Silver Won’t Crash Along With The Stock Markets

When it comes to what happens during the next major market correction-crash, we can count on that “this time will be different” for the gold and silver prices. While many precious metals investors believe that gold and silver will crash along with the broader markets, the charts and data suggest the opposite.

In my newest video, Why Gold & Silver Won’t Crash Along With The Stock Markets, I provide charts and updated information on the break-even analysis of the primary gold and silver mining industry. According to my research, the gold market price has not fallen below the production cost of the top gold miners in the past two decades.

Some analysts, such as Harry Dent, believe the gold price will fall to $700 this year. Dent reconfirmed his forecast in the following article, Why We Are Heading Toward $700 Gold In 2018:

Investors are fleeing to gold in a desperate attempt to weather the recent market volatility… but is this long time “safe-haven” actually poised to collapse wiping out trillions of dollars of wealth in the process?

While many economists will argue that gold is not in a bubble… and insist it will soar to $2,000, $5,000 and even $10,000, my research has said otherwise. I’ve never been more certain of anything in over 30 years of economic forecasting.

Market volatility, worries over the Europe Central Bank, negative interest rates, and China are among a laundry list of events that are driving panicked masses to buy the yellow metal. But this is only inflating the gold bubble that is poised to pop at any moment.

Mr. Dent states the due to the current market volatility, worries over Central banks, negative interest rates, and fears about China’s massive credit bubble are driving investors into gold. BUT, according to Dent, this gold bubble is about to POP.

…click on the above link to read the rest of the article…

GOLD & SILVER: The Ultimate Hedge Against Everything That Is Wrong In The Markets

April 25, 2018

GOLD & SILVER: The Ultimate Hedge Against Everything That Is Wrong In The Markets

Today we are getting another whiff of what’s wrong in the markets. Currently, the Dow Jones Index is down over 500 points, and the NASDAQ is off by more than 100 points. Who knows where the markets will finally end up at the close of trading, but it really doesn’t matter. Markets aren’t valued in days or weeks; rather it takes months and years. So, be patient, and you will be rewarded with at least a 50% decline in the Dow Jones Index.

Unfortunately, a lot of traders, even some frustrated precious metals investors, forget about the STAGES OF A FINANCIAL BUBBLE. It seems like after about ten years, all memory of the 2008 Financial Meltdown has been all but forgotten. While I can understand the “This time is different” by the Mainstream Media, I have to get a kick reading comments by disenchanted precious metals investors who have been swayed by the rampant insanity in the markets.

So, let me publish the stages of a financial bubble to remind those who have either been brainwashed by the Mainstream Media or who have just forgotten the fundamentals:

If I had to make a reasonable guesstimate, I would imagine we are somewhere going down the Peak slope or close to the Denial Stage. However, once the Dow Jones Index falls below 20,000, we will know that the markets have entered into the Fear Stage. During the Fear Stage is when I see the price and demand for precious metals to increase. As we enter the Capitulation Stage, then we could experience precious metals demand like we have never seen before.

Let’s take a look at the current Dow Jones Index chart. As I mentioned in several articles and videos, nothing goes down in a straight line, and it will likely take 1-2 years before the Index reaches its lows. However, this will not be the Dow’s ultimate low.

…click on the above link to read the rest of the article…

Getting High on Bubbles

April 16, 2018

Getting High on Bubbles

Back in the drug-soaked, if not halcyon, days known at the sexual and drug revolution—the 1960’s—many people were on a quest for the “perfect trip”, and the “perfect hit of acid” (the drug lysergic acid diethylamide, LSD). We will no doubt generate some hate mail for saying this, but we don’t believe that anyone ever attained that goal. The perfect drug-induced high does not exist. Even if it seems fun while it lasts, the problem is that the consequences spill over into the real world.

Today, drunk on falling interest rates, people look for the perfect speculation. Good speculations generally begin with a story. For example dollar-collapse. And then an asset gets bid up to infinity and beyond (to quote Buzz Lightyear, who is not so close a friend as our buddy Aragorn). It happened in silver in 2010-2011. It happened more recently in bitcoin.

Most speculators don’t care about the economic causes and effects of bubbles. They just want to buy an asset as the bubble begins inflating, and sell just before it pops. But bitcoin and many gold proponents are different. They promise that their favorite asset will cure many social ills, fix many intractable problems, and increase liberty. Oh yeah and get-rich-quick.

We been pounding the table for going on a decade, sometimes even bellowing from the rooftops, that gold does not go up. Even the gold bugs claim that the dollar is collapsing. Our point—which has so far gone unanswered—is that you cannot use something which is collapsing to measure other things. Especially not the economic constant (gold). Either the dollar is collapsing, in which case if gold is going up then the dollar could not be used to measure this. Or else it’s not collapsing, in which case maybe it could measure gold—but then remind us why these folks are buying gold.

…click on the above link to read the rest of the article…

Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold

April 16, 2018

Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold

– Global debt bubble hits new all time high – over $237 trillion
– Global debt increased 10% or $21 tn in 2017 to nearly a quarter quadrillion USD
– Increase in debt equivalent to United States’ ballooning national debt
– Global debt up $50 trillion in decade & over 327% of global GDP
– $750 trillion of bank derivatives means global debt over $1 quadrillion
– Gold will be ‘store of value’ in coming economic contraction
– Global debt is the mother of all bubbles

Source: Bloomberg

Global debt has now reached over 327% of global GDP, $237 trillion. Prior to the financial crisis it was less that $150 trillion. The amount by which it has surged in just one year is the same amount as the ballooning national debt of the United States.

The response of our leaders, central bankers and financial thinkers to this latest data?

It was good news as it showed that thanks to global growth the ratio of debt-to-gross domestic product fell for the fifth consecutive quarter. No irony in the fact that the economic growth is entirely funded by debt itself – adding another shaky layer to the house of cards.

Christine Lagarde said earlier this week:

The bottom line is that high debt burdens have left governments, companies, and households more vulnerable to a sudden tightening of financial conditions. This potential shift could prompt market corrections, debt sustainability concerns, and capital flow reversals in emerging markets.

A sudden tightening of financial conditions is inevitable. The latest FOMC minutes released yesterday showed that members plan to increase interest rates at a faster rate than previously expected. This was inevitable given the loose monetary policy that central banks have been enjoying for the last decade.

As Jim Rickards summarises:

…click on the above link to read the rest of the article…

“In the long run, owning gold and silver is going to be, by far, the smartest thing one could have done.”

April 14, 2018

“In the long run, owning gold and silver is going to be, by far, the smartest thing one could have done.”

It’s Friday the 13^th,and after an almost perfect week, things are looking bumpy again. Eric stops by to calm our frazzled nerves on this, the unluckiest day.

In this chat you’ll hear:

Why you shouldn’t rely on fiat currencies
Eric’s thoughts on price suppression in the precious metals space
His top picks for mining companies to look into

“We are seeing people throughout the world buying more physical gold… The logic for that is getting stronger all the time. We have a stock market that’s getting very jittery here, we have a bond market that’s in a bear market, we have inflation rising, we have craziness going on in various currencies… How many people does it take watching their currencies being that volatile before you say, ‘Give me something little more secure?’”

To hear Eric’s full thoughts, listen here: https://soundcloud.com/sprottmoney/sprott-money-ne…

When the big ones start going, you better head for the hills.” – Eric Sprott on volatile markets (Weekly Wrap-up, April 06,2018)

April 7, 2018

When the big ones start going, you better head for the hills.” – Eric Sprott on volatile markets (Weekly Wrap-up, April 06,2018)

That’s another week in the books, and Eric Sprott returns once again to break it down for you. In this week’s wrap-up, you’ll hear his thoughts on:

What a weak US jobs report means for gold and silver
The “terrible vulnerability” of the stock market
Plus: Surging open interest in COMEX silver

“The big worry when I look at the stock market in general … I would be very concerned about some of the things that are happening on a macro scale. And one of them, of course, is what happened to cryptocurrencies … It’s a wipeout! People doing exactly the wrong thing with their money … And it just tells you about markets. Let’s go to the stock market … [Facebook, Google, Amazon…] They’re getting picked off one by one. When the big ones start going, you better head for the hills … I just think that this stock market is looking terribly vulnerable. I wouldn’t want to be in it. There are so many things that can go wrong here.”

To hear Eric’s full thoughts, listen here: https://soundcloud.com/sprottmoney/sprott-money-ne…

Currency Wars Erupt, We Have Reached the Point of No Return

April 7, 2018

Currency Wars Erupt, We Have Reached the Point of No Return

It is happening, and it cannot be stopped.

The Currency Wars that have been discussed at length by many precious metals experts for years are here, and there is now no turning back.

As I have previously discussed, these wars have been ongoing for much of the last decade, if not longer. However, it has remained largely a “gentleman’s” war, with neither side wishing to expose their hand too much.

Now, with the increased rhetoric coming from the Trump administration, things have turned red hot. Shots are being fired back and forth on an almost daily basis.

President Trump has imposed numerous tariffs on Chinese goods entering the United States. The first was $50 billion worth of tariffs, to which China swiftly responded in kind, imposing $50 billion worth of their own tariffs on American imports such as soybeans and small aircrafts.

As expected, President Trump would not let this stand, and he is now discussing an additional $100 billion worth of tariffs on Chinese goods. This action would, of course, be answered with a likewise response from China.

As we can already see, these actions will have a ripple effect through not only the Chinese and US economies, but the entirety of the West, as these countries are two of the largest importers / exporters in the world.

These increased hostilities show no sign of abating and are likely to increase from this point out. Neither side is willing to back down and show weakness. As a result, stock markets have corrected sharply, proving that they too prescribe to my assumption.

…click on the above link to read the rest of the article…

Why A Dollar Collapse Is Inevitable

April 7, 2018

Why A Dollar Collapse Is Inevitable

“Naturally, the smooth termination of the gold-exchange standard, the restoration of the gold standard, and supplemental and interim measures that might be called for, in particular with a view to organizing international credit on this new basis, will have to be deliberately agreed upon between countries, in particular those on which there devolves special responsibility by virtue of their economic and financial capabilities.”
-General Charles de Gaulle, February 1965

We have been here before – twice. The first time was in the late 1920s, which led to the dollar’s devaluation in 1934. And the second was 1966-68, which led to the collapse of the Bretton Woods System. Even though gold is now officially excluded from the monetary system, it does not save the dollar from a third collapse and will still be its yardstick.

This article explains why another collapse is due for the dollar. It describes the errors that led to the two previous episodes, and the lessons from them relevant to understanding the position today. And just because gold is no longer officially money, it will not stop the collapse of the dollar, measured in gold, again.

General de Gaulle made himself very unpopular with the international monetary establishment by holding the press conference from which the opening quote was taken. Yet, his prophecy, that the gold exchange standard of Bretton Woods would end in tears unless its shortcomings were addressed by a return to a gold standard, turned out to be correct shortly after. What the establishment did not like was the bald implication that it was wrong, and that the correct thing to do was to reinstate the gold standard. Plus ça change, as he might say if he was still with us.

…click on the above link to read the rest of the article…

The Case For a Gold Currency Part 2: Wages and Growth: Higher Under Classical Gold Standard

April 6, 2018

THE CASE FOR A GOLD CURRENCY PART 2: WAGES AND GROWTH: HIGHER UNDER CLASSICAL GOLD STANDARD

When the world was on the gold standard, the fastest rate of economic growth happened between 1870 and 1914, when the gold standard was suspended in Europe because of WWI. Not only that, but blue collared workers then saw vast increases in their purchasing power. Had we stayed on the classical gold standard, wages would be higher and the middle class would continue to grow.

For example, in 1915, Henry Ford paid his workers $5 per day. At that time the price of gold was set at $20.67/oz. This means that in terms of gold (which was a legitimate form of payment and was easily redeemable into paper money) a blue collared factory worker was paid 0.242 oz. of gold per day. Assuming a 5-day work week and 40 weeks of work in a year, Ford workers could be paid 48 oz. of gold per year. Today the price of gold is $1200/oz; this means the Ford workers were paid $57,600/year in today’s money. This is significantly higher than what manufacturing jobs pay today.

Similarly, in 1965, the minimum wage was $1.25/hr (5 silver dimes) and under the Bretton Woods Agreement, silver was $1.25 per ounce. Today silver is $15/oz and hence workers would have had a purchasing power of $15/hour in today’s money.

Inflation

This implies that it is government control over a nation’s monetary system, which has allowed the middle class’s income to be eroded by inflation. While the CPI may show us that central banks have kept inflation under control, once we use precious metals as a measurement, the cost of goods and services have gone up much higher than what current inflation would suggest.

…click on the above link to read the rest of the article…

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