He’s been dubbed the “Bond King,” but Jeffery Gundlach isn’t particularly bullish on bonds right now – at least not US government bonds. And he’s certainly not bullish on stocks. Gundlach has his eyes on gold.
Gundlach heads DoubleLine Capital, overseeing some $119 billion in assets. During a speech at the 2018 Sohn Investment Conference last week, he said an “explosive, potential energy” of a huge “head-and-shoulders bottom” base was signaling a move of $1,000 in gold prices.
Bernie Sanders wants everybody to have a job with health benefits paying $15 per hour. Most people would like to see that happen. But Bernie is willing to put your money where his mouth is. He’s come up with a plan guaranteeing every American worker “who wants or needs one” such a job. Here’s how the Washington Post described the proposal.
Sanders’s jobs guarantee would fund hundreds of projects throughout the United States aimed at addressing priorities such as infrastructure, care giving, the environment, education and other goals. Under the job guarantee, every American would be entitled to a job under one of these projects or receive job training to be able to do so, according to an early draft of the proposal.”
According to a representative from Sanders’ office, the senator has not come up with a cost estimate for the proposal or decided how a government this is more than $21 trillion in debt would fund such a program.
As Peter Schiff put it in his latest podcast, Bernie Sanders has come up with a lot of dumb ideas, but this one is probably the dumbest.
Rising interest rates could unleash a zombie company apocalypse – if the Fed lets it happen.
Corporate bankruptcy levels in the US hit seven-year highs last month.
New Chapter 11 bankruptcies surged 63% year-over-year in March. All-told 770 companies filed for Chapter 11 protection last month. That is the highest level since April 2011.
Imports of gold into China via Hong Kong surged in March, rising 78.67% compared to February.
The amount of the yellow metal moving into mainland China via Hong Kong rose to 59.4 tons in March, up from 33.25 tons in February, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.
Stock markets had another bad day Tuesday. The Dow Jones fell over 400 points as the 10-year Treasury yield broke through 3%. Several “marquee” companies warned of higher costs, including Google-parent Alphabet and Caterpillar.
In his latest podcast, Peter Schiff said he thinks the correction is over.
Not the downward move. That is not the correction. This is the bear market. The upward move was the correction. It was the first correction in this young bear market that technically is not a bear market yet because we’re not down 20%. But that’s only a matter of time before the people call the bear market what it is.”
Inflation is low – so we’re told. But this simply isn’t true.
Now, it is true that the consumer price index (CPI) has remained relatively low. But rising prices aren’t in-and-of themselves inflation. In fact, we can have inflation without a corresponding rise in CPI – at least in the short-term. That’s exactly what we’ve had over the last decade. We’ve had rampant inflation, but it hasn’t manifested in broad-based rising prices – yet.
Conventional wisdom holds that rising interest rates are bad for gold. The fact that the Federal Reserve has been nudging rates up over the last couple of years has accounted for a lot of the bearishness in the gold market. But the conventional wisdom doesn’t line up with the current reality. Even as the Fed has hiked rates, the price of gold has gone up – increasing by 8.5% since the Federal Reserve’s first rate hike of this cycle in December 2017.
A recent report issued by the World Gold Council indicates that gold investors focused primarily on interest rates are looking in the wrong place. They need to be watching the dollar.
Our analysis shows that the correlation between gold and US rates is waning and that the US dollar is again a stronger indicator of the direction of price. And, in our view, this will continue over coming months.”
Last week, Peter Schiff said we may well be in the calm before the economic storm. In his latest podcast, he said the storm may be on the horizon. But most people are still oblivious, including the Federal Reserve.
Can the auto industry survive in a high interest rate environment? We’re about to find out.
Earlier this month, we reported that the air has started to come out of the subprime auto bubble. Nevertheless, Americans are still buying cars. Last week, we got a Commerce Department report that consumer spending was up thanks in large part to the strongest auto sales in six months. But there is a dark lining in this silver cloud and the long-term prospects for the auto industry could be dimming.
Why?
There are some troubling signs for the economy in the bond market. Yield curves are going flat.
On Wednesday, the yield curve from 5 to 30 year bonds flattened to as little as 29 basis points. That represents the narrowest spread since 2007. The yield curve between 2-year and 10-year Treasuries also narrowed, touching 41 basis points, also the smallest gap since before the financial crisis. Investors extending to 10 years from 7 pick up just 4.3 basis points, less than a quarter of what they got a year ago, according to Bloomberg.
So, what does this mean?
