Jim Grant appeared on CNBC’s Closing Bell to discuss the Fed’s latest non-move in interest rates, noting that “it seems awful familiar.”
Grant offered a stinging indictment of the Fed’s role in the world, pointing out that central planners simply can’t juggle all of the varying factors in the economy. Every move the Federal Reserve makes to “fix” a problem brings about another set of unintended consequences.
The Fed is in the business of making things worse as it seeks to make things better.”
Grant went on to discuss the notion that sovereign debt is some kind of “risk free” investment. “Of course it has risk,” he exclaimed, noting that in 2005, mortgage debt was the favored asset of the cycle.
The asset of the cycle now is sovereign debt yielding just about nothing.”
This article was written by Dickson Buchanan, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
Due to the high level of response from our readers to the first article we posted on the benefits of our low cost vault storage solutions, we wanted to follow up and delve into the details of how to buy and sell gold and silver stored in a domestic or international vault.
To begin with, creating a storage account through our storage partners is a simple and easy process. Individuals as well as corporations, LLC’s, trusts, partnerships and other legal entities, can open an account. There is a one-page form to fill out, a couple of identification documents to provide, and in about two to three business days, your storage account will be opened. As our website details, we have domestic storage locations here in the US in addition to strategic international jurisdictions abroad.
Once the storage account is created and you have your assigned account number, you can then proceed to buy your physical metals from our firm.
As we’ve been reporting for months, China is quietly becoming a dominant player in the world gold market, as the yellow metal shifts from the West to the East. Now the mainstream media is starting to take notice.
Not only is China the top consumer of gold in the world, ahead of fellow Asian nation India, it is also gaining stature as a player in the global market. Just last week, China launched twice daily gold fixing to establish a regional benchmark that will further bolster the country’s influence.
Earlier this week, NewsMax Finance published an article highlighting five trends in China it says will change the gold market forever. The piece nicely summarizes the trends we’ve been pointing out for more than a year. Based on these trends, NewsMax predicts China will become a dominant force on the world stage:
The gold market will soon be very different than from what we see today—largely due to the current developments in China. China’s influence will impact not just gold investors but everyone who has a vested interest in the global economy, stock markets, and the US dollar. After all, China will be a dominant force in all, as most analysts project.”
This article was submitted by Addison Quale, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
You know the old saying. “There’s a sucker born every minute.”
Sadly, many Americans have been suckered into thinking their pension was going to provide a stable and comfortable retirement. But government mismanagement and central bank monetary policy are quickly turning that retirement dream into a nightmare.
Pensions have been a major contributor to the Greek financial crisis, and the American system is looking increasingly Greek.
Just last week, Central States Pension Fund, one of the largest pension funds in the nation, filed an application to cut participant benefits. Central States handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota. And in Illinois, pensions are underfunded to the tune of $111 billion.
This is not just an American phenomenon. A UK pension fund is also having serious issues and is slashing benefits.
With the Federal Reserve preparing for another meeting, pundits are talking interest rate hikes. Even AP is speculating that a rate hike is unlikely this go-around, blaming problems the “global economy.”
The US job market is healthy. The stock market is up. Home prices are rising. Yet as the Federal Reserve prepares to meet this week, it seems in no mood to resume raising interest rates from ultra-lows. With the global economy struggling and US inflation still below the Fed’s target rate, many economists see little likelihood of a rate increase even before the second half of the year.”
But James Rickards appeared on Bloomberg and said it isn’t just about the world economy. He pointed out that the US economy is “hanging by a thread,” and an interest rate hike would likely throw the country into a full-blown recession. Rickards reminded Bloomberg’s Francine Lacqua that the small hike last December sent the stock market into 10% free-fall, and he said the only reason the market is climbing again is because everybody knows the Fed isn’t going to normalize rates. That, Rickards says, is good news for gold.
The reason stocks are going up is Janet Yellen has gone full-dove. She’s sprouted wings and flies around the room. There is nothing the stock market doesn’t like about free money, and maybe negative interest rates are on the table for the next year or so. That is sort of bullish for stocks, but it’s also bullish for gold.”
ReasonTV asked Californians what they thought the “right” minimum wage is. Unsurprisingly, most of the people in the “trendy, hipster enclave” of Silver Lake in Los Angeles just assumed a higher minimum wage is simply a no-brainer, win-win for society and workers. They didn’t hesitate to insist a $15-20 minimum wage was a necessity for the common decency of low-wage workers, even when presented with the prospect of major job losses if the minimum wage were raised. The video reminds us of when Peter Schiff asked Walmart shoppers if they would be willing to pay 15% more for their groceries if Walmart employees got a 15% raise.
As the push for a $15 per hour minimum wage continues in earnest across America, policymakers had better consider the warning signs flashing from beleaguered Puerto Rico. Minimum wage policy was a major factor leading to the current crisis there.
The Government Development Bank in the US territory is operating under a state of emergency imposed to halt the erosion of its dwindling cash. Governor Alejandro Garcia Padilla declared the emergency earlier this month. The executive order suspends the bank’s lending power and freezes most withdrawals, except for those to fund public safety, health, and education services.
The GDB serves as the US territory’s primary financial agent. According to Bloomberg, the bank has $562 million in liquidity. It is currently negotiating with creditors, trying to avoid default on $422 million payment due May 1. According to a report at Fortune.com, Garcia Padilla says the bank can’t afford to repay the loan.
Earlier this week, China launched twice daily gold fixing to establish a regional benchmark that will bolster the country’s influence in the global gold market.
What is the significance of the move?
Greg Collett, director of investment products for the World Gold Council talked with Kitco News about the new Chinese benchmark. He said it reflects the country’s growing appetite for gold and its increasing influence in the world market:
China is the largest consumer of gold in the world and this is just reflective of their growing place, and their growing demand for gold in China.”
Collett also discussed the current bull market for gold, pointing out that negative interest rates in Europe and Japan are a big driver, and that won’t likely change any time soon.
As Peter Schiff put it in his recent podcast, “Hi ho silver seems to be the rallying cry for the day.” (Scroll down to watch the full podcast.)
Last month, we reported silver could be poised to come out of the shadows. It certainly has – in a big way. Silver cracked $17 per ounce Tuesday, hitting its highest level in more than 10 months. On Monday, Bloomberg declared it a bull market:
Silver entered a bull market after climbing to a 10-month high amid positive signs for Chinese industrial demand and decreasing bets the Federal Reserve will raise US interest rates.”
The silver price has increased more than 23% since the first of the year, outperforming gold.
In another sign that it is becoming a major player in the world gold market, China launched twice-daily price fixing on Tuesday. According to a Bloomberg report, the move is an attempt to establish a regional benchmark that will bolster its influence in the global gold market:
The Shanghai Gold Exchange set the price at 256.92 yuan a gram ($1,233.85 an ounce) at the 10:30 a.m. session after members of the exchange submitted buy and sell orders for metal of 99.99 percent purity. Members include Chinese banks, jewelers, miners and the local units of Standard Chartered Plc and Australia & New Zealand Banking Group Ltd., according to the bourse.”
Gold has shifted from the West to the East over the past several years. China ranks first in the world in gold consumption, ahead of India at number two. China’s central bank aggressively added to its stock of gold during the last half of 2015, and that trend is expected to continue this year. The country is also making an impact on the worldwide gold market. Earlier this year, ICBC Standard Bank bought a huge gold vault in London, expanding China’s largest bank’s footprint in the city’s bullion market.