Saturday, February 11, 2017

Gold World News Flash

Gold World News Flash


Is Trump the largest FX Trader in the world?

Posted: 11 Feb 2017 01:25 AM PST

Trump met with Shinzo Abe friday, the famous inflationist Prime Minister of Japan.  The issue in question is if Trump will label Japan a 'currency manipulator' - whatever that means.  It seems to be the equivalent of 'Currency Headwinds' in publicly traded companies.  Because, every currency is manipulated!  The only currency in use today that's not manipulated, is Bitcoin and the Bitcoin alternatives (Author's note: Bitcoin is actually really useful, try it here).  From Bloomberg:

President Donald Trump vowed Friday that the currencies of the U.S., China and Japan would soon be on "a level playing field," a day after a phone call with China's president, Xi Jinping.

The two leaders, Trump said in a news conference with Japanese Prime Minister Shinzo Abe, "discussed a lot of subjects. It was a long talk.  "As far as the currency devaluations, I have been complaining about that for a very long time," he said.

Trump promised as a presidential candidate that he would have the Treasury Department declare China a currency manipulator on his first day in office. Three weeks into his presidency, that has yet to happen. Last week, he accused Japan of manipulating the yen, a charge Abe and other Japanese government officials have denied.  Trump did not explain how the three countries would reach a level playing field, or what he meant by the phrase.

What is 'a level playing field' ?  Sounds good, but what does it mean - if anything?  In FX, it means nothing (because, what is 'level' ?  It's all relative.  A cheap currency is a trade advantage, but these distinctions need to be made clear for traders.

The Yen was up a little on the day, but movement was really sideways - the market was looking for a 'big' statement.  They were watching.  In fact, no one in FX has ever watched a President like Trump.  He has accused many countries of being currency manipulators and the market waits for an action (such as an EO) or a statement.  Trump could be the biggest FX market mover of our generation.  

When FX markets were 'manipulated' (this was a misleading description of the case, what they did was manipulate the price FOR THEIR CUSTOMERS - it's impossible to manipulate the FX market it's too big) many said that it was impossible to manipulate FX markets, and this is generally true.  However, central bankers like Mario Draghi can make a statement and the EUR/USD can move by 200 pips in a tick.   Trump may have a larger effect on FX, although we haven't seen something like a 200 pip spike on an announcement.  We have seen it in the stock market, when Trump tweets stocks move.  During the elections and a little post election we've seen it in USD/MXN - the Mexican Peso.

A Citi strategist said all this talk is 'hot air':

Hogwash. Hot air.

That's what Willem Buiter, chief economist at Citigroup Inc., makes of the Trump administration's comments on exchange rates. The world's largest foreign-exchange trading firm sees the dollar rising this year even as the president talks the greenback down and blasts some of the nation's biggest trading partners for currency manipulation.

"This is all basically hogwash," Buiter said in an interview on Bloomberg Television, referring to Trump's criticism of China and Japan on their exchange rates. "All this currency-manipulator talk is, I think, basically hot air."

Wow - thank you Willem for clearing that up, now it is clear for investors.. it's just 'hot air' - now we can make better decisions about FX.

For a primer on how to manage 'The Trump Call' on FX, checkout this book Splitting Pennies.  If you need some Alpha in your portfolio checkout this Options program.

Gold and Gold Stocks Hit Upside Targets. Now What?

Posted: 10 Feb 2017 10:45 PM PST

The precious metals sector has reached the upside targets we've written about since the start of 2017. Gold has touched almost $1250/oz ($1246/oz high) while GDXJ exceeded our $41 target and GDX nearly reached $26. The glass half empty case is the sector is now at strong resistance levels and any immediate upside will be difficult to sustain. On the other hand, the gold stocks are showing the internal (strong advance/decline line) and relative strength (leadership against Gold) that bodes for additional gains. There may be some more upside potential but the risk of a medium term correction looms in the background.

Moving Stock Market Targets: Investors Need to Discriminate!

Posted: 10 Feb 2017 10:39 PM PST

In the current political climate herds are running every which way. There is the anti-Trump herd, the pro-Trump herd, the liberal herd, the conservative herd, the CNBC herd, the mainstream financial services industry herd, the Armstrong herd, the gold bug herd... and there are all those ideologies in play. But robotic thinking, unless it is in service to profitable trades like this one on an excellent company providing automation (ref. recent Fanuc NFTRH+ highlight), does not pay (disclaimer: I've sold and taken the profit). So stop right there! These are the financial markets, and if you have not checked your deepest held beliefs, your virtue, your bigotry and in general, your bias at the door you are going to lose.

Russia and China Further Dump The Dollar - Buy Gold; Economic Collapse Coming?

Posted: 10 Feb 2017 09:30 PM PST

Russia and China Are Continuing to Buy gold and dump dollars Transcript : this is by the Russia insider goodbye 0:09 petro dollar Russia and China dumped us 0:12 treasuries and buy gold on this is 0:14 posted on thursday februari 9017 gold is 0:18 appealing to Russia and China...

[[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://www.figanews.com for full links, other content, and more! ]]

Gold And Silver Stocks – The Bargain Of The Century

Posted: 10 Feb 2017 09:25 PM PST

Matterhorn AM

Gold and Gold Stocks Hit Upside Targets. Now What?

Posted: 10 Feb 2017 08:07 PM PST

The Daily Gold

Economists: Le Pen Victory Would Lead To "Massive Sovereign Default", Global Financial Chaos

Posted: 10 Feb 2017 06:02 PM PST

With two months left until the French election, analysts and political experts find themselves in a quandary: on one hand, political polls show that while National Front's Marine Le Pen will likely win the first round, she is virtually assured a loss in the runoff round against either Fillon, or more recently Macron, having between 20 and 30% of the vote; on the other, all those same analysts and political experts were dead wrong with their forecasts about both Brexit and Trump, and are desperate to avoid a trifecta as being wrong 3 out of 3 just may be result in losing one's job.

Meanwhile, markets are taking Le Pen's rise in the polls in stride, and French spreads over Germany are moving in lockstep with Le Pen's rising odds. In fact, as noted earlier in the week, French debt is now the riskiest it has been relative to German in four years.

Why are markets spooked? 

As per her recently released manifesto, Le Pen has promised to unilaterally take France out of the Euro within six months, sparking concerns over what might happen then. The answer comes from the National Front itself, which overnight revealed its plans to the FT, suggesting that €1.7 trillion of French public debt would be redenominated into francs if the far-right National Front party gets into power.

Call it Yanis Varoufakis' dream scenario.

As the FT reports, "in comments that are likely to amplify fears about the impact of a FN victory on the global financial system, several senior-ranking party members have told the Financial Times that in  power the far-right would seek to redenominate about 80 per cent of the France's €2.1tn public debt — the part that was issued under French law — in a new national currency. Confirming that Le Pen's party had extensively studied the topic, David Rachline, FN's head of strategy, said in an interview that only about 20% of France's total public debt "falls under international law [and would stay denominated in euros] . . . but for the rest we will have the right to change the currency".

So with the green line in the chart above continuing to rise, a potential currency redenomination and "Frexit" on the table, and with memories of "impossible" events like Brexit and Trump quite fresh in everyone's memory, the time has come to bring out the big scaremongering guns, starting with the rating agencies, and sure enough they did not disappoint, because as quoted by the FT, an event envisioned by Le Pen would, according to rating agencies, be likely to amount to the largest sovereign default on record, nearly 10 times larger than the €200bn Greek debt restructuring in 2012, threatening chaos to the world financial system on top of the collapse of the single currency.

Moritz Kraemer, S&P's head of sovereign ratings, said in a statement that this would be a default. "There is no ambiguity here . . . If an issuer does not adhere to the contractual obligations to its creditors, including payment in the currency stipulated, [we] would declare a default."

 

Alastair Wilson, head of sovereign ratings at Moody's, said they would consider any country leaving the euro to be in default if changing the currency of its debt caused investors to lose out financially relative to the original promise. "The test for us is: do we think investors will be able to get back the value they put in, when they expected to get it back," he said.

The FN's Rachline said French debt would be redenominated on a "one franc to one euro" basis. But he added that reintroducing a national currency that could fall in value against the rump euro would lower France's total debt burden. "[Having our own currency] will allow us to do a competitive devaluation," he said.

Again, this was precisely the scenario contemplated by Vaourfakis, until he realized that the ECB has full control over the Greek banking system and the population's euro-denominated deposits: there simply was not enough cash for the Greek people if everyone decided to withdraw funds, which is what ultimately killed the Varoufakis revolution.  And to think that fractional reserve banking would have been understood by now.

It is unclear if Le Pen, or the FN, has planned for this contingency yet: it would be silly not too less than two years after the Greek 2015 fiasco. Nonetheless, the process is distinctly possible. Lawyers contacted by the FT said the currency redenomination for the bonds governed by French law would be theoretically possible because any nation can change its own laws. This means that bondholders would struggle to pursue France in the courts in the same way they pursued Argentina after its default in 2001.

Matthew Hartley, a debt capital markets partner at Allen & Overy, said: "Because the bonds are governed by French law, they just have to change French law to change the terms of the bonds."

Meanwhile, just in case rating agencies were not sufficiently convincing, mainstream economists - because their reputation is obviously much higher - also chimed in, arguing that France leaving the euro would cause chaos in Europe. Benoît Cœuré, executive board member at the European Central Bank, this week said that leaving the euro would lead to "impoverishment", higher interest rates, a heavier debt burden, unemployment and inflation.

The European Central Banker will likely be even more angry when he learned that Le Pen plans on doing what the Developed World's central bank would love to do, but are - for the time being - stopped: deploy helicopter money. The FN has said that, following a shift back to the French franc, rules governing the country's central bank would be changed to allow it to directly finance the French state, for example servicing French welfare payments and government debts.

Leaving the euro is just one pillar of the FN's economic strategy, which is focused on making French industry more competitive, taking a page right out of the Trump playbook. However, since France does not share the US' exorbitant privilege of the global's reserve currency and world's strongest army, France - unable to bully its trading partners, hopes that a fall in the value of the new national currency will boost exports.

The second thrust of the party's economic policy is to use "intelligent protectionism" to allow them to defend French industries — something that they are currently prevented from doing by EU rules, says the FN.

 

One senior official said it was a return to the politics of postwar head of state Charles de Gaulle, who kept a tight hand on the French economy. "We are not extreme, we are Gaullists," said the person, who did not want to be named.

 

This dirigiste strategy would see them imposing trade barriers on any "unfair competition" from abroad, according to party officials. There would also be a 3 per cent import tax on foreign goods that would be given as tax breaks to the poorest.

For now, it is unclear whether Le Pen will win or not: there are two more months to go, and even with her rise in the polls against scandal-ridden opponents, one can debate if she has enough support to win. But no matter the outcome, Mikael Sala, the head of Croissance Bleu Marine, a think-tank supporting the FN, summarized it perfectly when he shrugged off concerns that the redenomination of the currency would be considered a default by the rating agencies. "We will be elected by the French people — it is not our job to please [the rating agency] S&P," he said. "They do not have much credibility after the financial crisis anyway."

Gold Price Closed at $1234.40 Up $15.90 or 1.3% this Week

Posted: 10 Feb 2017 05:08 PM PST

Here's the weekly scorecard:

3-Feb-1710-Feb-17Change% Change
Silver Price, cents/oz.1,745.301,791.2045.902.6
Gold Price, dollars/oz.1,218.501,234.4015.901.3
Gold/silver ratio69.81668.915-0.901-1.3
Silver/gold ratio0.01430.01450.00021.3
Dow in Gold Dollars (DIG$)340.51339.44-1.07-0.3
Dow in gold ounces16.4716.42-0.05-0.3
Dow in Silver ounces1,150.031,131.61-18.42-1.6
Dow Industrials20,071.4620,269.37197.911.0
S&P5002,297.422,316.1018.680.8
US dollar index99.76100.750.991.0
Platinum Price1,003.201,008.805.600.6
Palladium Price749.45783.1533.704.5

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Gold Stocks’ Strong New Upleg

Posted: 10 Feb 2017 04:02 PM PST

Zealllc

Are You Prepared for “Unencumbered” Interest Rate Policy?

Posted: 10 Feb 2017 02:00 PM PST

This post Are You Prepared for "Unencumbered" Interest Rate Policy? appeared first on Daily Reckoning.

[Ed. Note: Jim Rickards' latest New York Times best seller, The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisisclaim your free copy here – transcends politics and media to prepare you for the next crisis in the ice-nine lockdown.] 

In September Janet Yellen gave a speech in Jackson Hole, Wyoming titled "Designing Resilient Monetary Policy Frameworks for the Future." That title at least suggested that some new thinking and new policies might be on display. They weren't.

Yellen basically said that interest rate cuts, quantitative easing, interest on excess reserves and forward guidance were sufficient to pull the U.S. economy out of a future recession if needed.

In short, Yellen said the Fed's existing toolkit is adequate, and is unwilling to consider more radical tools or remedies. The real lesson was that if you like weak growth, money printing and market manipulation, get ready for more of the same.

She dismissed the idea of negative rates. She also agreed that "helicopter money" (really fiscal policy supported by Fed bond purchases to finance deficits) could be useful, but made it clear that it was up to Congress to implement that and the Fed would not lead the charge.

Investors should ignore Fed noise. But that doesn't stop markets from overreacting to every syllable of Fedspeak. Gold investors just have to live with day-to-day volatility until the world finally realizes that central banks are impotent and can safely be ignored in favor of global macroeconomic fundamentals.

Yellen was not the only one speaking at Jackson Hole, though. Another major speech was by an economist named Marvin Goodfriend, from Carnegie Mellon University. His speech was called The Case for Unencumbering Interest Rate Policy at the Zero Bound.

On its face, the Goodfriend speech was about negative interest rates — and just because Yellen doesn't like them now doesn't mean they're not coming in the future. That negative rate idea has been around for a few years. But Goodfriend's focus was to promote "unencumbered" negative interest rate policy, which means getting rid of things standing in your way.

Specifically, the No. 1 thing standing in the way of negative rates is cash. If citizens can go to cash, that makes it difficult to impose negative rates on digital bank accounts. That's also not a new insight.

The war on cash has been going on for a while, and prominent economists from Larry Summers to Ken Rogoff have called for an end to cash. Rogoff did so in a front-page article in the "Review" section of The Wall Street Journal. He's also written a recent book called The Curse of Cash. The title removes any doubt about his position.

What is new in all of this are ideas that Goodfriend presented to the Fed to neutralize the role of cash. His preferred way is just to "abolish paper currency," as his paper outlines in Section 5A. But then Goodfriend laments that "the public is likely to resist the abolition of paper currency." He's right about that.

So Goodfriend comes up with a new concept called the "flexible market-determined deposit price of paper currency." (Seriously, I'm not making this up; you can find it in Section 5B of his paper.)

In plain English, this means the "money" in your bank account and the "money" in your purse or wallet would be like two different kinds of currency. There would be an exchange rate between the two, just as there is an exchange rate between dollars and euros. The Fed could set this exchange rate at whatever level it wanted and would not be obligated to "defend" that rate at any particular level.

What this means is if you go to the bank and withdraw $1,000, the bank might only give you $980 in cash because of the "exchange rate" between your bank account and cash. Or if you deposit $1,000 in cash, the bank might only credit your bank account $980 because of the same "exchange rate" between your cash and the bank account balance. In short, it's a way to impose negative interest rates on physical cash.

It's true that Goodfriend is an academic, not a policymaker. But Yellen and other Fed bigwigs like William Dudley and Stanley Fischer were sitting in the audience. In my experience, this is how things start. Some ivory-tower academic writes about a policy proposal.

A few other ivory-tower academics and beltway think tanks take the idea and run with it. Then one of those academics gets appointed to a policy position. The next thing you know, the policy is in effect.

That's how I saw special drawing rights (SDRs) coming years in advance, and that's how I see the war on cash now. That's why I also see a war on gold…

Curiously, academic policymakers have spent so many years disparaging gold they seem to have forgotten that gold is money. Once the war on cash heats up — and certainly when that war is in full swing, out in the open — people everywhere will turn to gold as an alternative form of money.

And then, once policymakers see the massive shift to gold, they will launch a war on gold also.

So my advice to people interested in gold is — get it now while you still can. What are you waiting for?

But it's not just the government and the banks that are doing everything they can to make it impossible for you to get your own money in the form of cash. Now they have a new partner — big business!

It seems that businesses have their own war on cash. They hate handling it and it's expensive to transport, store and insure. More and more, businesses are refusing to take your cash.

This is just another form of discrimination against the poor who may not have banking accounts or who rely on check cashing services and live paycheck to paycheck. It's also aimed at you because it forces you into a digital system where your money can be hit with negative interest rates, service fees, account freezes, bail-in charges and other forms of theft.

When pigs are going to be slaughtered, they are first herded into pens for the convenience of the slaughterhouse. When savers are going to be slaughtered, they are herded into digital accounts from which there is no escape.

The war on cash may be a losing battle for you and me, but there is still shelter in physical gold, silver, land and other hard assets.

The key defensive play is to obtain your gold now, while you still can, before the war on gold begins.

As this realization sinks in, it will create more demand for physical gold, which is already in short supply. That demand-driven tail wind for physical gold will take gold mining stocks much higher.

These scenarios are more disturbing, and the tempo more rapid, than I imagined just a short time ago. The time to position yourself in gold is now. Don't wait.

Regards,

Jim Rickards
for The Daily Reckoning

The post Are You Prepared for "Unencumbered" Interest Rate Policy? appeared first on Daily Reckoning.

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain About 1% and 3% on the Week

Posted: 10 Feb 2017 01:32 PM PST

Gold fell $9.80 to $1221.70 in Asia before it climbed up to $1237.00 in early afternoon New York trade and then fell back off a bit, but it still ended with a gain of 0.2%. Silver slipped to as low as $17.555 before it rallied all of the way back to $17.996 and ended with a gain of 1.53%.

COT Gold, Silver and US Dollar Index Report - February 10, 2017

Posted: 10 Feb 2017 12:32 PM PST

COT Gold, Silver and US Dollar Index Report - February 10, 2017

Moving Targets: Investors Need to Discriminate!

Posted: 10 Feb 2017 12:24 PM PST

In the current political climate herds are running every which way. There is the anti-Trump herd, the pro-Trump herd, the liberal herd, the conservative herd, the CNBC herd, the mainstream financial services industry herd, the Armstrong herd, the gold bug herd… and there are all those ideologies in play. But robotic thinking, unless it is in service to profitable trades like this one on an excellent company providing automation (ref. recent Fanuc NFTRH+ highlight), does not pay (disclaimer: I've sold and taken the profit).

LIVE STREAM: President Donald Trump Holds a Joint Press Conference with Japanese PM Abe

Posted: 10 Feb 2017 09:21 AM PST

 President Donald Trump Holds a Joint Press Conference withJapanese Prime Minister Abe The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more

[[ This is a content summary only. Visit http://financearmageddon.blogspot.com http://www.figanews.com for full links, other content, and more! ]]

Gold Stocks’ Strong New Upleg

Posted: 10 Feb 2017 08:55 AM PST

Gold stocks are on fire this year, powering higher in market-dominating performance. This is a massive reversal from their dark fourth quarter, with 6/7ths of those losses already erased. But this strong new upleg still remains young and small by historical standards. Gold stocks' recent rally is only the vanguard of another major bull-market upleg. This sector's bullish technicals reveal vast upside potential from here.

Gold And Silver Stocks – The Bargain Of The Century

Posted: 10 Feb 2017 08:14 AM PST

Gold And Silver Stocks – The Bargain Of The Century
By Egon von Greyerz

Buy high and sell low, that is the mantra of many stock market investors. When a stock or a market reaches a new high the average investor turns even more bullish. That is also the point when the media talk about it and it becomes headline … Read the rest

Gold Stocks Strong New 2017 Upleg

Posted: 10 Feb 2017 08:12 AM PST

Gold stocks are on fire this year, powering higher in market-dominating performance.  This is a massive reversal from their dark fourth quarter, with 6/7ths of those losses already erased.  But this strong new upleg still remains young and small by historical standards.  Gold stocks’ recent rally is only the vanguard of another major bull-market upleg.  This sector’s bullish technicals reveal vast upside potential from here. The gold miners are a small contrarian stock-market sector that isn’t widely followed.  Hearing about how the gold stocks are faring in the mainstream financial media is pretty rare.  So this sector generally flies under the radars of the great majority of speculators and investors.  That’s rather unfortunate, because the gold stocks have enjoyed some of the greatest gains in all the stock markets in this young century.

Great Fiscal Rotation and Gold

Posted: 10 Feb 2017 06:52 AM PST

Reflation is a fact, at least for a while. And it is not limited to the U.S., as it is a truly global phenomenon – since 2016, the rebound in economic activity has been seen both in the advanced and emerging markets (this is partially due to the flattening in deep recessions in Russia and Brazil). The broad-based improvement is bad for the yellow metal, as it signals a more lasting revival.

Counter Trend Moves Underway

Posted: 10 Feb 2017 06:31 AM PST

The daily cycles in gold and the Euro have likely topped and the US Dollar bottomed. This video discusses the likely price direction of gold in the short and longer term.

A Bullish Take on Silver's Nasty Reversal

Posted: 10 Feb 2017 06:04 AM PST

Because of the gratuitous nastiness of yesterday's reversal, I've selected a chart for today that shows a bullish pattern big enough not to have been affected by it. Indeed, in this picture, March Silver would become a speculative 'mechanical' buy on a pullback to the red-line pivot; and an even more enticing one if the futures were to fall all the way back to the green line 65 cents below. That would represent a decline of about 3.6%, so we needn't be terribly concerned if sellers were to hit this vehicle hard for another day or two, driving it down by perhaps a further 40-50 cents; the move would still look merely corrective.

Great Fiscal Rotation and Gold

Posted: 10 Feb 2017 04:57 AM PST

Reflation is a fact, at least for a while. And it is not limited to the U.S., as it is a truly global phenomenon – since 2016, the rebound in economic activity has been seen both in the advanced and emerging markets (this is partially due to the flattening in deep recessions in Russia and Brazil). The broad-based improvement is bad for the yellow metal, as it signals a more lasting revival. Additionally, although the recent rebound has mainly been triggered by the huge fiscal stimulus in China, the advanced economies have also improved significantly, in particular the U.S. It means negative news for gold, which is more sensitive to developments in America.

SPX is Testing the Trendline

Posted: 10 Feb 2017 04:53 AM PST

Good Morning! SPX futures are marginally higher, but appear not to have broken above the trendline. The futures have not broken above yesterday’s high, so there is one technically bearish sign. ZeroHedge writes, “S&P futures rose further into record territory, European shares rose to within striking distance of their highest levels in more than a year while bonds fell and the dollar rose as investors cheered a surge in Chinese trade data amid hopes of "phenomenal" tax cuts by Donald Trump, all of which have rekindled the Trumpflation trade.”

Gold Prices Up 5.8% YTD As Trump ‘Honeymoon’ Ends

Posted: 10 Feb 2017 04:49 AM PST

Gold prices continued to shine this week reaching $1,244.70 per ounce and and has posted gains in five of the last six weeks. This week it reached a new three-month high – it’s highest since the Trump win and has climbed over 6% this year, beating the gains made in the same period in 2016.

Breaking News And Best Of The Web

Posted: 10 Feb 2017 01:37 AM PST

US stocks at all-time highs on Trump tax-reform promise, gold and silver near multi-week highs. Trump immigration plan challenged in court. Debate over Putin intensifies. French election uncertainty rocks euro bonds  Best Of The Web The misleading comfort of calm – SafeHaven Which assets are most likely to survive the inevitable “system re-set”? – OfTwoMinds.com […]

The post Breaking News And Best Of The Web appeared first on DollarCollapse.com.

MGX Shareholders Ride a Rollercoaster

Posted: 10 Feb 2017 12:00 AM PST

Bob Moriarty of 321 Gold chronicles MGX Minerals's wild ride from $0.69 to $2.75 to $0.92 in three weeks.

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