Gold and silver are money. But most governments treat precious metals like a commodity. They don’t accept it as payment. Worse than that, they tax it. Think about the absurdity of this policy. You don’t tax money!
Fortunately, we’re beginning to see a shift. Many states are repealing taxes on gold and silver, and treating precious metals more like money. Wyoming is the latest state to reform its laws.
These policies not only ease the burden on investors, it opens the door to use gold and silver in everyday transactions, a foundational step for the people to undermine the Federal Reserve’s monopoly on money.
Expectations that the Fed will continue and perhaps even quicken the pace of interest rates hikes have created headwinds for gold. But there another side to the rising interest rate phenomenon that a lot of people in the mainstream seem to be missing. According to a recent Bloomberg report, the prospect of a higher interest rate environment is feeding signs of financial stress among debt-laden consumers.
This doesn’t bode well for the US economy and could spur safe-haven demand for gold.
The Federal Reserve opens its March Open Market Committee meeting today. Most analysts say there is a 100% chance for a rate hike during this go-round. Overall, there is a decidedly hawkish attitude when it comes to the Fed. The real debate right now revolves around whether the central bank will hike three or four times in 2018.
But Peter Schiff said in his most recent podcast he isn’t certain about all of these rate hikes.
The fact is I’m still not 100% sure the Fed is going to hike on Wednesday. Now, I would argue or agree that it’s more likely than not that the Fed is going to hike because they’ve been hiking interest rates all along. The Fed, so far, has not given any indication that they’re not going to hike because they don’t want to give up the ghost of this vibrant recovery where they need to raise rates because everything is going so well. But that whole narrative, that whole illusion, seems to be fading very quickly.”
So, could we see a more dovish Fed before the week is out?
Everything is great. We’re riding high. The stock market is up. Employment is up. Analysts and pundits see nothing but smooth sailing ahead.
It sounds an awful lot like 2007.
It’s like deja vu all over again.
The Federal Reserve claims to be tightening. According to the conventional wisdom, the Fed will raise interest rates at least three times in 2018 – maybe even four. And last fall, the central bank announced its plan to begin shrinking its balance sheet.
But have you actually looked at the Fed’s balance sheet? Dan Kurz of dkanalytics.com has. In fact, he has dug deep into the Federal Reserves opaque world of financing and concluded all of this talk of shrinking balance sheets and normalized interest rates is pure fantasy.
As sure as night follows day, before all too long the world’s leading central banks will be abandoning both fledgling interest rate increases and QT fantasies (reducing the size of their balance sheets by selling bonds and stocks) out of ‘status quo necessity.'”
Could we be on the verge of a retail apocalypse?
February marked the third straight month of declining retail sales. Analysts had not expected another drop, but they got one nonetheless. Sales fell 0.1% in February. Analysts had expected an uptick of 0.3%.
This is not good news for a retail sector that is already teetering on the brink.
The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.
Pro-tip – If you ever have to load 9.3 tons of gold, silver and platinum in an airplane, make sure you secure the load. I mean, tie it down good. You know, throw a few bungee chords over it. Or maybe a strap or two. Something. At least some rope. Because here’s a dirty little secret.
Things shift during flight.
Apparently, the guys loading the Russian AN-12 cargo plane in Siberia never read the little warnings on the overhead bins or listened to the flight attendant spiel. They loaded more than 18,000 pounds of gold and other precious metals on the plane and, as a Time Magazine report put it, “didn’t properly stabilize the load” before takeoff.
As you can probably imagine, this didn’t end well.
President Trump’s new economic adviser did an interview on CNBC’s Closing Bell Wednesday and offered a little investment advice.
I would buy King Dollar and I would sell gold.”
So, should you follow Larry Kudlow’s guidance?
Of course, that’s up to you. But Kudlow doesn’t have the best track record when it comes to predicting the future. On the cusp of the 2008 financial crisis, he was among the mainstream pundits saying the whole subprime mortgage thing was “no big deal.”
Retail sales unexpectedly fell again in February. It was the third straight monthly drop and the first time the US economy has seen three straight months of declining retail sales since 2012.
Sales fell 0.1% in February. Analysts had expected an uptick of 0.3%. According to CNBC, households cut back on purchases of motor vehicles and other big-ticket items, pointing to a slowdown in economic growth in the first quarter.
So, why is this happening? Peter Schiff offered a simple reason in his latest podcast.
Americans are broke.
