Michael Snyder: Prophetic Warnings for America

Journalist and book author Michael Snyder predicts, “Judgment is coming for America.” Snyder lays out his case in his new book called “Lost Prophecies of the Future of America.” 

Snyder says; 

“What is remarkable is all these people have seen the exact same thing coming (over many decades) and that is because it is all coming from the same source.

So, it is really a summary or a bringing together of these voices warning in advance of many things that are coming. 

We were warned in advance a pandemic was coming, and most people don’t even realize it. Another pandemic is coming too.”

- Source, USA Watchdog

Frank Holmes: If You’re Not long, You’re Wrong, Bear Case For Gold is Weak

However you look at it, gold’s long-term fundamentals remain bullish, owing to a world that is unlike anything we’ve seen before, said Frank Holmes, CEO of U.S. Global Investors. 

“I think all those [bear case] suggestions, if you look at the evidence, are pretty weak. It’s a very different world,” Holmes said. “People complained when the balance sheet of the Fed was 6% of the GDP, and now it’s 30%. 

If you get [politicians like] AOC [Alexandria Ocasio-Cortez] becoming mainstream, you’re talking about trillions of dollars of government money printing.”

- Source, Kitco News

It's Getting Worse With Every Shock: One Bank Turns Apocalyptic On The Coming End Game

In what can be described as Bank of America at its most apocalyptic, the bank's currency strategist Athansios Vamvakidis takes us on a tour de force of where we've been, going through what comes next, and which culminates in what may well be the 9th circle of financial hell.

Starting with the "three red flags" that have recently emerged across global economies, he then explains why nobody cares and why "markets remain optimistic" - the reason is MMT, in case anyone is confused - as "deflation and not inflation is the risk today." As a result, nothing "prevents more fiscal policy stimulus, funded by more money printing" while "central banks keep policy rates low for as long as necessary, to help governments deal with the massive debts they are accumulating? Effectively, this is what markets are pricing in" as without inflation there is no "budget constraint."

Yet stocks at all time high does not mean the situation is sustainable: as Vamvakidis writes next "things could have been different if the pandemic had found the global economy with lower debt and higher interest rates" however, that is a pipe dream as "most countries did not take advantage of the good times in the years before to create enough policy space, just because they thought that these years were not "good enough." In fact, in a complete failure of following Keynesian principles, "macro policies since the late 1990s have been loose in good times and even looser in bad times" as "countries have been converging towards MMT, without even realizing that they do" and the result "is that policies were loose and debt high even before the pandemic." Covid only accelerated this trend.

So for now the world is cruising on a debt-fueled autopilot, and "as long as there is no inflation, there is no budget constraint, in MMT and in the current state of the world. For as long as the pandemic lasts, fiscal and monetary policies can provide as much support as necessary and even more." Furthermore, looking ahead in a post-covid world, there will be "no rush to tighten policies, to avoid jeopardizing the recovery, as was also the case in the years following the global financial crisis. After all, Japan has been in this reality for the last 30 years."

Of course, eventually these loose macro policies, in both a good and a bad state of the global economy, "will likely lead to inflation. The longer it takes the more addicted markets become to macro policy support making the eventual adjustment harder." And yet, even once central banks announce their intent to overshoot their inflation target - something which will be unveiled in September, "non-linearities may make their task challenging, while in any case markets may start pricing rate hikes and the so-called central bank policy put could weaken."

Indeed, it is "only low inflation has allowed the I-am-so-bearish-I-am-bullish market in recent years" and is why the Fed will do anything in its power to keep inflation from becoming a budget constraint. However, "if and when at some point we do get inflation, this equilibrium will likely break."

So is there a way out? Well, with debt set to keep rising, the only option to reduce debt to either pre-Covid levels, or even more to pre-global financial crisis levels "would require massive fiscal austerity and private sector deleveraging", something which no self-respecting politician will ever campaign on ever again. And why take the plunge: "as long as inflation remains low and central banks keep policy rates at zero, there is no reason for such pain."

Unfortunately, as even Bank of America admits, "this is a scenario of recurring bubbles." The real economy is weak, but asset prices are strong because of loose macro policy support-more decoupling between Wall Street and main street. As Vamvakidis writes, "this will continue until unexpected shocks take place, asset price bubbles burst, which then needs even looser macro policies to avoid an even weaker real economy, leading to new asset price bubbles. The result is a vicious cycle spiralling to even higher debt levels, lower interest rates and larger central bank balance sheets, without inflation, but with an even weaker real economy and even worse asset price bubbles."

And we all have the Fed to thank for this endless loop that eventually ends in absolute disaster.

Of course, these same central banks are all too aware of these "risks" as BofA calls them (or, as the 1% would call them, opportunities), "but they are stuck." For the reason why just look at recent attempts to tighten, even in small steps, which led to sharp market adjustments: "We can mention many examples, from the Fed's QE taper tantrum and its sharp U-turn last year cutting rates and expanding its balance sheet despite unemployment being well below the natural rate, to the ECB being stuck with negative rates well after the crisis and despite serious side effects and reintroducing QE last year at effectively full employment. Government debt is already too high in most cases, particularly after the pandemic, to reduce it with fiscal consolidation in the years ahead, without hurting the already weak economy."

Which brings us to Vamvakidis' damning conclusion, one which can be summarized simply as enjoy it all while you can because the end-game is coming as "this is not a sustainable situation in the long term:"

We see no easy way out. Again, we wouldn't start from here. This is not a good place to be in for the global economy and it is getting worse with every shock, despite the market euphoria in the meantime. An already bad situation before the pandemic has now become worse. We are not sure how and when we will see the end-game, but in our view this is not a sustainable situation in the long term.

And that's all one needs to know about the current trajectory of, well, everything.

His full must-read note below:

In search of a budget constraint

First, Covid-19 infections continue to increase in Europe in recent weeks, reaching a new re-opening peak last week. We have been concerned that reopening will lead to higher infections, in Europe and everywhere else. The trade-offs between going back to normal and containing Covid-19 are clear to us.

Second, the Eurozone August PMIs dropped, confirming our view that the initial rebound was simply from base effects after the lockdown and that the cleaner data from now on will reflect a weaker recovery and output well below pre-crisis levels. US data has also started weakening, with our economists expecting further slowing this fall.

Third, markets were disappointed by the FOMC minutes last week, just because they were not dovish enough. The minutes told us that Fed policies would be outlook-dependent. However, the consensus was looking for a strong, unconditional dovish message. Effectively, markets are pricing both loose monetary policies and a strong recovery, which we have been arguing is not realistic.

US equities were back to an all-time high last week, with equities in the rest of the world also recovering strongly, before these red flags caused a pause in risk assets. In the meantime, there is no fiscal deal yet in the US, with some benefits already expiring. The bottom line we see is that the real economy remains weak and fragile, while macro policy support has its limits, but markets are optimistic on both fronts.

- Source, Zero Hedge, read more here

Ron Paul: The Counterfeiting Fed & Reckless Political Spending

Politicians are spending money (that they don’t have) like never before. Bailouts, “Stimulus,” and Welfare for everyone are the only game in town. 

The great enabler, the Federal Reserve, counterfeits dollars by the trillions. The failure of "planning" cannot be more obvious. 

Representative Thomas Massie sounds off in opposition to the madness on today's Liberty Report.

- Source, Ron Paul

Gold, Silver and Mining Stocks Smell the Demise of the Dollar

The news that Warren Buffet took a stake in Barrick Gold stimulated animal spirits in the precious sector on Monday. To be sure, this was a factor in the move on Monday. 

However the precious metals are starting to price in the next round of money printing by the Fed and the coming avalanche of new Treasury bonds, both of which will be considerable in quantity and serve to further devalue the U.S. dollar. 

On that note, the US dollar index tumbled below 93 on Monday. In addition, per the TIC report which shows the flow of international capital into and out of U.S. securities, foreign entities led by China dumped $20.6 billion worth of Treasury securities in June.

The message is clear: the Fed will need to be a large buyer of the upcoming Treasury bond issuance and the precious metals sector loves the smell of this.

- Source, Silver Bear Cafe

Election Chaos & Delays Already in the Works With 600 Lawyers, Countermeasures in Place

Alarm Bells Ring over Refinance Mortgage Boom: Why Refis Are so Risky

The mortgage industry is in uproar over the surprise announcement by Fannie Mae and Freddie Mac (the GSEs) Wednesday night that they would charge a 0.5% “adverse market refinance fee” on refinance mortgages that they buy – “a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty,” said Freddie Mac’s statement sent to lenders.

The fee is designed to reduce potential losses for taxpayers that back the GSEs, as these GSEs now see the mortgage market, and particularly refis, heading for trouble. Refis carry a lot higher risk than purchase mortgages. More on that in a moment.

This fee will be effective September 1. To refinance a $500,000 balance, the fee would amount to $2,500. It’s not the end of the world. Mortgage lenders pay this fee to the GSEs, but they’ll try to pass at least part of it on to the borrower. The fee will be applied to cash-out and non-cash-out refi mortgages.
Who profited from the refi boom and who carries the risk?

On Thursday, 20 lobbying groups representing the mortgage and real-estate industry – including the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and the National Association of Home Builders (NAHB) – responded with a letter, opposing the fee, because it would threaten “the emerging, but unsteady improvements to the national economy,” and raise refi costs, which would be “particularly harmful for our nation’s low- and moderate-income homeowners,” and would be, therefore “contradicting and undermining Fed policy.”

Turns out, these 20 lobbying groups don’t represent anyone but their clients in the mortgage and real estate industry – mortgage bankers, mortgage brokers, real estate brokers, home builders, and others. And these clients have all hugely profited from the refi boom that the record low mortgage rates, which have dropped nearly 1 percentage point since January, have brought about.

And none of the clients of these lobbying groups carry the risks of these refi mortgages. The GSEs – Fannie Mae and Freddie Mac – carry those risks, and ultimately the taxpayer.

This then triggered two counter-punches from the American Enterprise Institute’s Housing Center, sent out by email on Thursday and Friday.

“The Housing Lobby has described the GSEs’ imposition of a new ½-point market adjustment fee to offset risk on refinance loans as: “outrageous,” “a cash grab,” and “based on jealousy, greed, and disdain.” Nothing could be further from reality,” the AEI’s first statement said.

The GSEs are already strung out on refi mortgages, according to the AEI:

“The GSEs’ share of the entire cash-out refinance market is now at 90%, up from about 75% at the beginning of 2020.” That’s how exposed they are.
“The GSEs’ share of the entire rate and term refinance market is now at 80%, up from about 63% at the beginning of 2020.”
“Recently the combined volume of cash-out and rate and term refinance rate locks has been more than double the level a year earlier.” That’s how much the refi market has boomed under the record low interest rates.

The refi market share of the FHA, the VA, and private-sector lenders are down because they “have appropriately tightened credit standards,” the AEI said. The GSEs too have tightened standards, but “not been enough to slow their massive share and volume increases.”

“Mortgage lending history teaches us that lending into a vacuum is dangerous, and nothing indicates that more than a massive increase in share compared to one’s competitors,” the AEI said.

“The new ½-point market adjustment fee is not only appropriate, but it would have been a dereliction of regulatory oversight not to have taken action,” the AEI said...

- Source, The Wolf Street Report

Gold and silver ran up a little too quickly, said Kitco's precious metal division head

In an interview on Wednesday, Hug noted that precious metals prices were over-extended after both metals had phenomenal runs. In the past weeks, gold hit a record high and silver achieved a multi-year high. 

"Silver ran up to $30. Gold ran up to almost $2,100--all a little too quickly in my opinion," said Hug. "That's when the profit-taking set in. 

It was just a very small door with everybody trying to get out. And then as the market moved lower, people who were in at higher prices were getting margin calls in the afternoon, which just accelerated the move."

- Source, Kitco News

Despite Gold Price Correction, Many Gold Miners Are In Great Shape and Are Hiking Dividends

After superb and for many gold miners record breaking Q2 earnings numbers (remember that Q2 2020 ended before gold prices went over $2k an oz), many gold miners are now hiking dividends. 

The gold mining sector is the only sector where margins have expanded rapidly, free cash flow has increased a lot and there is big dividend hikes.

- Source, Wall St for Main St

Ron Paul: Does Jerome Powell Have a Clue? What De-Dollarization Truly Means for the US Economy

Politicians and Central Bankers attempt to do the impossible. They believe that with dictates and counterfeit money they can control the economy. 

The reality is the exact opposite. They only destroy the economy. Is it any wonder that the ultimate international money - Gold - has hit all-time highs in terms of The Fed's debased dollars? 

Gold has no ties to any politician or central banker. It is a source of independence. More and more people are wanting that kind of independence.

- Source, Ron Paul

Revolution is Coming: Is Gold and Silver the Next Bitcoin for Millennials?

What the gold sector has needed for years is generalist interest in the space, and one demographic in particular that has shied away from the sector is now showing unprecedented interest, according to Lobo Tiggre, principal analyst of the Independent Speculator. 

“Young people today understand that there is a risk in calling something money that governments can create at will at no cost. That’s completely different than anything we’ve seen before,” Tiggre told Kitco News, noting that there has been a surge of trading activity on Robinhood, the web-based discount brokerage, in gold-backed exchange traded funds.

- Source, Kitco News

SRS Rocco Report: Something Amazing Happened In The Silver Market

Something BIG Changed in the silver market last week. I discuss why the silver price will likely head up much higher in the future.

- Source, SRS Rocco Report

All Time High: Gold Goes Over & Closes Above $2000 For First Time Ever

Jason talks about how gold closing above $2,000/oz today (8/4/2020) was long overdue! This is while the head of Goldman Sachs wealth management warned his muppet clients and other muppets to avoid having gold exposure.

- Source, Wall St for Main St

Gold & Silver Prices Surge Up As Gold Exceeds All Time Highs

Gold passes the all time highs setting a new record at $1980 as silver rose above $25 as precious metals news reaches the mainstream. 

Where are the metals heading from here and what will the second half of the year look like? 

We will cover the rapid price movements of gold and silver in context of the record setting new highs in gold. 

We will also cover the price movements of platinum, the U.S. Dollar index, the equities sector and more.

- Source, Golden Rule Radio

Wolf Street Report: Nobody Knows How to Ever Get Out of This Mess

“Extend and Pretend” forevermore.

- Source, Wolf Street Report

Gold Price Forecast: $6,000 Gold on the Horizon

The gold price just rocketed through $1,900, marking the highest level since the record high peak in late 2011. This move should not come as a surprise to anyone paying attention to the current financial landscape. The FED has injected an unprecedented amount of new money/debt into the economy since March in efforts to avoid a collapse from the impact of the Covid-19 virus and subsequent restrictions of business activity globally. Over $6 trillion in stimulus so far is roughly double the entire amount injected during the financial crisis of 2008/09. And they are just getting started.

The Federal Reserve has stated that stimulus efforts will last for years and they have committed to do “whatever it takes” to keep the economy afloat. The Federal Reserve balance sheet has shot from $4 trillion pre-crisis to $7 trillion today. This is the highest level on record by a wide margin and the fastest it has ever increased. And this is before the 2nd round of stimulus, which is currently being negotiated. While there are plenty of dollar bulls amidst a global dollar shortage, they have been incorrect in their bullish outlook thus far. The dollar index has dropped from a high of 103 on March 20th to just 94, a significant drop in just a few months to the lowest level since September of 2018.

It turns out that when the money printer goes brrrrrr, it is indeed bearish for the dollar and bullish for gold, which is now up 25% year-to-date. This compares to a loss of 0.5% for the S&P 500 and even outpaces the gains of the red-hot NASDAQ, which is up 15% in the same time period. While we advocate holding some physical gold, it has been mining stocks that have generated the best gains in 2020. The VanEck Vectors Gold Miners ETF (GDX) is up 42% year-to-date and many of the junior miners that we hold in the Gold Stock Bull portfolio are up 100%. Miners see their profit margins increase at a faster pace than the gold price, which often results in leveraged gains.

The recent breakout above resistance at $1,800 (red circle in the chart) was very significant for gold and was followed by a quick rally of an additional $100 to $1,900 per ounce. And there is plenty of upside left in this rally in our view, with the price still below the mid-point of the trend channel. If we use the last major bull cycle in gold as a guide, we forecast the price to climb toward $6,000 by the start of 2026. This would represent another 10-year cycle and 6x move from the December 2015 bottom around $1,050.

- Source, Silver Bear Cafe, read more here