Headlines

Americans tune into ‘cancel culture’ — and don’t like what they see

U.S. agrees to pay Pfizer and BioNTech $2 billion for 100 million doses of coronavirus vaccine

Price tag of Biden campaign promises nears $10 trillion

Senate transcripts: Joe Biden Quoted N-word 13 times in 1985 hearings

Feds assemble ‘Operation Diligent Valor’ force to battle Portland unrest

Existing home sales surge nearly 21% in June — a record monthly gain

Google appears to blacklist major conservative news sites

At least 14 wounded following shooting outside Chicago funeral home

Liz Cheney defends pro-Trump bona fides after GOP attacks

State Department orders China to close consulate in Houston — China vows retaliation

Gold and silver prices spike

Hollywood dunks on Trump after he offered well wishes to Maxwell


STAND UP FOR AMERICA!

reddit Pic

$1.6 billion in gold bullion ... about equal to the largest Mega Millions jackpot

Headlines

Bloomberg campaign manager: ‘Mike needs to get his legs under him’

Coronavirus update: US hospitals brace for possible pandemic, Air France tallies ‘brutal’ cost

Bolton see his testimony wouldn’t have affected Trump acquittal ...

Sanders wins backing of top Muslim political group

Bloomberg nails Socialist Sanders as millionaire with 3 houses

Gold surges to 7-year high as investors seek safety trade

Spielberg daughter comes out as porn star ...

Rod Blagojevich: ‘I’m a Trumpocrat’

Trump, RNC announce $10 million plan to battle Dems on voting lawsuits

Bloomberg’s debate debacle might be the ‘beginning of the end’ of his 2020 run, pollster says

‘Nazi terrorist’ massacres 9 at hookah bars near Frankfurt ...

George Soros calls for removal of Facebook CEO Mark Zuckerberg

Headlines

Trump fuels prediction that Russian investigators will face prison

Facebook is giving users a way of wiping their web history

Warren crowd swells in MN ... 12,000 people, largest on tour

‘I have made mistakes’: Warren apologizes at Native American Fotum

Mueller-targeted Russian firm seeks April 2030 trial

A top- performing hedge fund is making a big bet on gold

Iowa corn poll: Biden, Pete ...

Rashida Tlaib’s grandmother fires back at Trump: ‘May God ruin him’

Italian prime minister resigns

FDIC approves tweak of Volker Rule, easing trading restrictions for Wall Street banks

U.S. Steel to lay-off hundreds in Michigan ...

WALLS WORK: Immigrants fail to scale new border wall

Headlines

‘Warren has built a monster’ inside the Democrats’ battle for Nevada

Investors try to figure out Trump’s trade war endgame: ‘I can’t even tell you what victory is’

Rasmussen: [Trump] 47% approval ...

President Trump supports expanded background checks

Puerto Rico high court overturns Pedro Piertuisi as governor

10-year yield drops below 1.6%, 30-year drops to 30-year low as collapse in rates accelerates

‘Red Flag’ plan has support in Congress ...

Marianne Williamson releases $500 billion reparations plan

Trump quietly used regulations to expand gun access

Gold surges above $1,500, now has a better return than stocks this year

Troubles: NYTimes stock tumbles as much as 20% ... Ad revenue scarce

Biden pushes gun confiscation plan

Headlines

Trump’s re-election campaign is on a crusade against leaks

It was a monumental week for markets with major milestone for stocks, bonds, gold and oil

ICE raids starting Sunday ...

TX Governor orders 1,000 National Guard troops to border

Huawei sues Commerce Department over seized equipment

Traders his week bet on a Fed rate cut in record-setting numbers

Trump deporting illegals at slower pace than Obama ...

Donald Trump: People ‘forgot’ Elizabeth Warren is a ‘fraud’

What if Trump won’t accept 2020 defeat?

Giant explosion rocks largest refinery complex on East Coast, sends gasoline prices higher

Special Prosecutor named in Jussie Smollett case, new charges possible

Trump cuts Obama’s Syrian refugee surge by more than 60 percent

Precious Ratios

I recently posted a picture and discussion about how the United States used to back some paper currency with precious metals ... see: Real Money. The picture in this blog entry intrigued me to the point that I figured out what the value ratio between gold and silver was in the early 1930s. Roughly a  ten dollar Silver Certificate was equal to 10 one ounce silver dollars whereas a ten dollar Gold Certificate was backed by a half ounce gold coin. Therefore the value ratio of silver to gold then was 20 to 1.

And I also remember that, as a young man in the 1950s, this same government mandated ratio was 32 to 1 because gold was pegged at $32 per ounce when we still had real one ounce silver dollars. Today the spot price of an ounce of gold is $1,287 whereas silver goes for $14.54 an ounce. Therefore the current value ratio between these two precious metals now is roughly 88 to 1.

This suggests that either gold is too expensive ... or silver is too cheap. You decide.

Headlines

Farmers are losing money thanks to Trump -- but they still support him

Gold buying by central banks hits its highest level in almost three years

October jobs: +250K ... Wage gains strongest since 09 ...

Clapper: Trump 'seemingly condones' radical anti-Semitism

Bolton praises Brazil's Bolsonaro as a 'like-minded' friend

Young Americans signal record turnout for midterm elections, reject Trump, GOP: Poll

NYT: Nationalism is breaking point for some suburban voters ...

Macron lashes out as popularity tumbles to all-time low

Trump: Trade talks with China 'moving along nicely'

Apple now has $237.1 billion in cash on hand

Cook: Dems gain 30-40 [House] seats ...

Oprah involves lynching, opression in campaign speech

A Few Observations

- Obama's spooks, Brennam, Comey and Clapper, were so focused on undermining Trump's bid for the White House; I wonder how many real intelligence jobs went undone or underdone?

- Back in the day when salt was as valuable as gold, a bag of potato chips might have cost as much as $100

- If the Clinton Foundation and Global Initiative were not money laundering operations, how come they have gone quiescent after Hillary is no longer a shoe-in for the presidency.

- How does the DOJ's Rod Rosenstein still have a job since it has been revealed that he illegally back-dated by weeks the authorization to break down Manafort's  door at 3 AM to search his home and arrest him?

- Why is Turkey still in MATO?

- When the Federal Reserve Bank's primary missions of full employment and a 2% inflation rate are met, as they are now, it would seem that the Fed could swing to helping our balance of payments strategies and lowering the cost of financing our national debt.

Olympic Medals

In the recent  South Korean Winter Olympics, North Korea won zero God Medals, zero Silver Medals and zero Bronze Medals. However, they did take down first place for the longest tapeworm. When all these Nork athletes return home, the owner of this champion parasite is the only one who will not be given a bus ticket to oblivion.

Curious George

Germany has been moving its physical gold out of New York and Paris ... and back to Frankfurt. They have been engaged in this process since 2013 and have so far repatriated about one half of its stash ... about 583 tons ... curious? See: CNBC Story. Yes, words have consequences, but actions have even more consequences. Read the speculations in the CNBC story above or conjure up your own guesses ... but whatever the real reason, it surely must be consequential.

Copperhead.

Copperhead Snake

I recently had an investment in the largest copper mining company ... along with Carl Ichan. But, after realizing what was happening with the strategic future of this metal, I took my money and ran ... as did Ichan. What prompted my decision?

Copper is primarily used to transmit electricity and information, in minting coinage, in plumbing piping, and in architectural roofing, gutters and other features. Now two of these big uses of copper are on the way out ... transmitting information and household plumbing piping. Increasingly voice and data are transmitted using silicon ... glass fibers. And plastic (PVC) piping is the new and more economical way to move household water. One lone last smaller trend, in micro-electronics, silver and gold are replacing copper because of better ductility and electrical transmission qualities.

So, in the long run, these two major uses of copper will gradually be phased out. Add to this the fact that, in the US, it costs more money to mint a copper penny than it is worth, suggesting that this use may also soon disappear ... maybe even worldwide.

Of course, like often happens on Wall Street, after I (and Ican) sold this copper stock, the price went up ... as did the price of copper! But, like Bernard Baruch once said when asked how he had made so much money, he replied, "I always sold too soon."

Bad Ads

There are a number of television ads that make me want to throw the remote thru the TV screen. And what is even more unfortunate, is that many of these commercials are repeated ad nauseum. Here are my top picks for the worst of the worst:

- My Pillow -- two years in development and endorsed by the National Sleep Foundation

- Socolove Law -- suffering from Mesothelioma? $30 billion has been set aside. You may be compensated ...

- Prevagin -- improve your memory with an ingredient found in jellyfish

- Flexseal -- we made the entire bottom of this airboat out of screen and covered it with Flexseal ... YAHOO!!

- Pulaski Law Firm -- have you taken Xarelto? Call 1-800-BAD-DRUG

- Progressive Insurance -- enough with Flo already!

- Viagra  -- if your erection lasts more than four hours, see a doctor immediately

- Lear Capital -- when the debt bubble bursts, it's the time that you should own gold

- Publishers Clearing House -- win $5,000 a week not just for life ... for ever

- Liberator Medical -- call for your free catheter sample pack

Silver Lining

Yesterday morning I watched a compelling interview on CNBC with Kyle Bass, a hedge fund manager who has shorted the Chinese yuan. His argument was that China is just months away from having to devalue it currency by not just 10% but more like 30-40% ... for his reasoning see: CNBC Interview. Then later I read an article that made a convincing case that the Chinese banking system has as much as 5 trillion dollars of nonperforming loans and the government might soon be required to bail them out using its huge sovereign reserves ... for the details see: New York Times Article.

This all sounds like awful news ... not so fast! If the yuan were to be devalued by the amount that Kyle Bass expects, then Chinese products would have enormous price advantages around the world ... and its economy would soar. Also a bailout of the Chinese banking system would clear the decks for a number of new loans to Chinese industry ... matching its explosive industrial expansion with equivalent liquidity. The result would be that China would likely once again be the world's growth engine ... quickly using up the world's existing commodity surpluses. And this would solve much of the deflationary pressures that now overhang the world's stock markets.

Therefore, once again, every cloud has a gold, copper, oil, steel and silver lining.

Where To Invest?

Where does someone stash one's investment funds these days? The choices are becoming very meager for the ordinary investor. Consider the following:

Income Stocks: The prospect of increased interest rates being pushed by the Federal Reserve Bank for this Fall has cast a pall over most income stocks ... particularly utilities. However, seeing that interest rate increases are likely to be small and stretched out, this might suggest that the weakness in these income stocks just might be overdone.

Growth Stocks: Growth stocks have been hot of late as money has been leaving income stocks ... that is until the latest slips by Apple and Microsoft. The stratospheric price-earnings ratios of many of these tech and bio-science companies offer considerable risk for the casual investor.

Government Bonds: Theoretically U.S. Government bonds are a safe investment ... however to earn 2.3% per year on you money for ten years is a pretty meager return ... particularly if one may not get a full return of one's capital if one has the sell this investment before its maturity date.

Municipal Bonds: Federal and often state and local tax free, these securities might be interesting under a Democrat presidential win ... since taxes are likely to go up. However, this may be more than offset by the dangers associated with increasing municipal bankruptcies.

Corporate Bonds: High-yield corporate bonds have been suffering the same fate as high-yield equities ... however, the time may be right for certain convertible debt securities ... but do your research!

Fine Art and Antiques: I believe that the only people who make money in these markets are well-connected dealers.

Gold (and Other Commodities): Gold and most other commodities are now at or near their five-year lows. The excuse given is the strength of the dollar. However I believe other forces are also at work ... including possible hedge fund manipulations of these markets ... and, as they say, you can't eat gold.

Developing Nations: A few years ago developing nations' markets were the place to be. Now, Russia and Brazil ... and more recently China have greatly disappointed.

Savings Accounts: Paying usually well less than 1%, savings accounts should only be used for ready liquidity ... certainly not for income.

Real Estate: The median price of homes in the United States just hit an all-time high  ... primarily due to lack of inventory ... and such prices, insiders say, are not sustainable ... particularly if mortgage rates climb back to more normal levels.

Your Mattress: Gets kinda lumpy.

So, in conclusion, there are not a lot of viable choices ... and I am as befuddled as the next investor ...

Black Swan Events

L

2015 has had its first black swan financial event ... the removal of the peg between the Swiss Franc and the European Euro ... an event that has traumatized currency markets causing the Swiss Franc to appreciate 30% in minutes ... and sent the Swiss stock market down over 10%  ... see: CNBC Story. (Black swan events are out-of-the-blue occurrences, like a black swan landing on a koi pond.) And I have a suspicion that this may not be the only such unexpected financial event of this new year ... already speculation is growing that the Euro may be on its last legs ... see: Breitbart Article.

If I were to guess,  another such financial shock in the new year might well center around commodities ... in particular gold. Already there are rumors that China might be hording gold with the intent of establishing its Yuan as a gold-backed currency ... see:  Money Metals Story. If this were to occur, Gresham's Law (good money drives bad money out of circulation) would change the financial landscape overnight. The U.S. Dollar, which is now on a roll, would plummet and financial markets would suffer apoplectic fits. The United States might even be forced back onto a gold-standard itself ... that is, if we have as much gold in Fort Knox as we claim ... see: U.S. News Story.

The only thing that I could imagine that would deter China from making such a bold currency move would be the large amount of dollar-denominated debt that it currently holds ... it would be cutting of its own nose to spite its face. But also note, China has been gradually paring back such lendings to America  ...see: Bloomberg Article. Perhaps China's intent might be a longer-term strategy?

Why is Gold in the Toilet?

The price of gold has dropped today $93, as I write this, to $1409 per ounce ... down from $1803 last August ... and an all-time high of $1920 in September of 2011.  That is almost a 27% decline and is causing a lot of consternation among the gold bugs and panic among those schlemiels who bought gold after listening to those high-pressure ads on television.  Now the question is, why has this "guaranteed investment" gone sour,  I can offer four reasons:

1) The price of gold has been anticipating the return of rampant inflation as a result of the U.S. Federal Reserve Bank and other central banks around the world printing new money as fast as they can get the paper delivered to their mints.  Like any speculative market, the price of gold was discounting the future and, when the "future" doesn't occur on schedule, things can get messy.  Ben Bernanke's interest rate manipulations and a continued weak U.S. economy/employment picture has kept a lid on inflation  ... which has pushed back the date of the big payoff for U.S. gold bugs.

2) Since there are significant carrying cost to owning gold (storage fees, margin interest cost, no dividends, and steep selling discounts), an unloading of same was almost destined due to the drawn-out timing of the expected "rally." (The price of gold in Japan, based on the recent and dramatic quantitative easing of the yen, is hitting new highs.  This maybe is another gold market bubble in the forming.)

3) Because of the austerity measures being imposed on some European Monetary Union members, there is considerable pressure on these central banks to sell gold reserves to meet their debt obligations.  Apparently last Friday, Cyprus was the first country to crack under the strain and either is or will be selling off significant amounts (tons) of gold.  Are Spain, Portugal, Italy, Greece, and Ireland to follow?

4) Independent of these three fundamental factors, clearly technical factors are now ruling the roost.  If speculators, such as hedge funds, see the price of gold plummeting, they head for the exits, elbows akimbo.  Small private investors often get crushed in the stampede.

So, dear readers ... gold now is in the toilet ... and may stay there until there are real signs of inflation rearing its ugly head again.  When might this occur?  I am not that good at predicting things.  But, I can safely say that, when it does occur, it will probably be lightning fast.

Afterward: as of 10:30 on 4/15/13 gold is selling for $1342 per ounce.