Instead of Treasuries, Investors Are Buying Foreign Stocks - Ep 1017

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 First Day of Q4 2019 Today was the first trading day of the 4th quarter of 2019.  And if today's action was a harbinger of things to come, it is going to be one difficult quarter for the bulls on Wall Street. In fact, when they rang the opening bell this morning, everybody was happy, the stock market was up, the dollar was up, gold was down again.  In fact, gold has had a pretty big correction since my last podcast. When You Live in Glass White Houses… Yesterday, gold saw a $25 decline; again, with a stronger dollar and a stronger stock market.  For some reason, I think investors were a little bit more optimistic over the last few days after my last podcast Donald Trump talked about - or there were some rumors that he was thinking about maybe de-listing Chinese companies from U.S exchanges, making it illegal or something for Americans to invest in China - which I thought was a very dangerous road for the President to go down. Remember, when you live in glass White Houses, you don't want to throw stones. Chinese Still Big U.S. Investors The United States benefits from a lot of direct investment from overseas, particularly China.  Chinese invest a lot in U.S. businesses; they're big buyers of U.S real estate, and, of course, they're still big holders of U.S. Treasuries. If the United States says, "Well, Americans can't invest in China." what happens if the Chinese return the favor?  I think we have a lot more to lose than they do. I think the following day or maybe over the weekend the President kind of backtracked away from that trial balloon and they said, "No, we're not considering that." So probably that was good news and a relief for the market that that wasn't going to happen. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

2 Okt 201952min

Check out my podcast, "What it Means to be an American", Episode 265 Earthquake Hits Puerto Rico Last night, I was lying in bed, I wasn't asleep yet; I just finished watching television; my wife and I were still awake, and next thing we know, the house starts shaking. And it kept on shaking.  I couldn't believe I was in an earthquake. This was a decent-sized earthquake - it was over 6.0 on the Richter scale. The earthquake occurred in the ocean, but not too far from Puerto Rico.  I think it rattled a lot of the islands here in the Caribbean. I haven't felt an earthquake since I lived in California. To be honest, I never even considered earthquakes here in Puerto Rico.  I knew about hurricanes, but I really didn't think we would be hit by an earthquake - and we did.  Fortunately, it didn't do any actual damage; in fact, I don't think anything in Puerto Rico was damaged.  Of course, the big risk when you get earthquakes in the ocean is tsunamis - but that didn't happen.  In the meantime, I've got a tropical storm overhead as I am recording this podcast.  Tropical Storm Karen has arrived in Puerto Rico later than expected.  It was supposed to come this morning but it didn't get here until this afternoon, although "Karen" doesn't sound particularly menacing, and it's living up to its name. It's really just a little rain, not too much wind; so that's not bad. Disaster in the Cryptocurrency Markets The real disaster is not here in Puerto Rico with earthquakes and tropical storms; it's the disaster that is unfolding in the cryptocurrency markets.  We are seeing some real carnage - a real bloodbath over there. I think this is just getting started, because we've finally really broken down on the Bitcoin chart, although the biggest declines today are in the alt coins. Bitcoin is down about 13% right now. But this about the high that Bitcoin is been in the last half hour. We're trading up around $8500.  We did get as low as $8000; I think we maybe ticked below it briefly.  That means from the nearly $14000 high that's a better than 40% drop in the price of Bitcoin from that peak, which, by any definition constitutes a bear market. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

25 Sep 201943min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 These two videos were referenced in today's podcast: How government programs drive up college tuitions Is a college degree worth the cost? You decide Fed Proving Me Right As I surmised, when I recorded my podcast on Wednesday, it seems pretty clear that the Federal Reserve has already returned to quantitative easing.  And that didn't take long, because they just ended QT (quantitative tightening) and they've already begun QE. - Although, the Fed is not going to admit that that's what they're doing. Apart from proving me right, which was one of my forecasts from the very beginning, even before the Fed was talking about ending QE, I said they could never end it before they even started it. Monetary Roach Motel I had forecast what the Fed was going to do before they did it. And when they announced quantitative easing, not only did I say it was a mistake, but I said the Fed was checking us into a monetary roach motel from which we could never check out.  It was the delusion that we could check out - the Fed was able to convince the markets that it was a temporary policy and that they would only be doing it in an emergency, then they would unwind the policy and shrink their balance sheet and the market believed them. QE Plus Zero Interest Rates Equals Bigger Problem I didn't believe them, and I was warning everybody that the Fed was either lying or didn't know what they were talking about or foolish, but the markets bought into this nonsense.  So, clearly, if the Fed were going to go back to quantitative easing, they would basically be admitting that the policy was a failure. Because the policy was intended to be temporary, not permanent. If they have to do it again, then it proves that it wasn't temporary.  Again, what I said, by doing quantitative easing in conjunction with lowering interest rates to zero, they were simply taking a debt problem and making it much bigger by encouraging even more debt. So once you load up with debt, once you encourage everybody to lever up, then you can't pull the rug out from under them. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

21 Sep 201958min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 No Surprises from the Fed: Quarter Point Reduction A lot has actually happened since I recorded my last podcast on Friday. I want to start with what happened today and then work backwards.  First of all the big news of the day is the Federal Reserve did exactly what the markets expected and reduced interest rates by a quarter point. Fed: "Mid-Course Correction"? This is the second quarter point reduction since the Fed reversed course on monetary policy and started what it once called a 'mid-course correction".  The markets didn't really like that, so the Fed kind of walked that back. Although, in the press conference today, Powell was asked about the "mid-course correction" and he kind of dodged it a little bit, but still maintained the pretense that all is well in the economy. But anyway, the Fed delivered the quarter point cut #2.  It is now targeting the Fed Funds Rate at between 1.75% and 2%. Short Term Interest Rates Back Below 2% So we now have short-term interest rates back below 2% - certainly on the way to zero, maybe even lower, we'll see.  Jerome Powell was specifically asked about negative interest rates during the Q&A session following the announcement.  He basically said the Fed is not really thinking about negative interest rates, or don't think they're going to be doing  negative interest rates, but of course we'll see what happens when we get to zero, and the problems are not solved. The Fed may well do negative interest rates; they may well not want to let that cat out of the bag just yet. Bullard:  "Interest Rates are Too High" At one point there was some anticipation that the Fed would do 50 basis points but by the time we actually got the announcement this morning, I don't think anybody was really looking for 50 basis points. Although, in the decision to reduce rates, Jim Bullard actually dissented and said that he wanted a 50 basis point rate cut, rather than the 25, but there were 2 other dissenters who didn't want any cuts at all. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

19 Sep 201947min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Dow 200 Points from Record High It was pretty quiet today in the equity markets; the Dow Jones managed to inch up 37 points, closing at 27,219 but, you know, how we're less than 200 points away from a new all-time record high in the Dow Jones. Long on Bonds? Bad Friday 13th! But the real action today was in the bond market. If you're suspicious on this Friday the 13th, and you were looking for bad luck, that's where you would have found it, if you were long the bond market.  Now, I've been talking about this bond market bubble for a long time - it's been inflating for a long time. Whether or not it's actually popped, well, we'll have to wait a little longer to find out.  But the carnage in the bond market that I mentioned on my last podcast has continued, with bonds continuing to suffer. Biggest Single Day Decline on 10-Year Treasury In fact, today was the biggest single day decline of the entire move.  The yield on the 10-year Treasury up to 1.903%.  Now, of course, it's still a very, very low yield, but when you consider that a week ago, we were as low as 1.429%.  That is a huge increase, percentage-wise, in the yield on the 10-year bond, which means a big drop in prices. Risk in Bonds if Interest Rates Go Up I'm not sure the percentage decline; maybe 5 or 6% was the drop, which, in the stock market, that's not a big deal.  Stock prices could drip 5% in a week - no big deal. But when the price of a bond drops by 5% in a week, especially a Treasury bond - people think about Treasury bonds as being risk-free - well, there's actually a lot of risk.  Especially when you're buying a bond with such a low coupon. There's a lot of risk if interest rates go up, then the value of that bond is going to go down. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

14 Sep 201956min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Millions of Americans were Affected by the Terrorist Attack on 9/11 Today is the 18- year anniversary of the tragic events that surrounded the terrorist attack on the World Trade Center and the Pentagon back in 2001.  I do not wish to make light of the suffering of the individuals who died tragically, not only the people who lost their lives on the ground, but also the ones aboard the airplane that crashed into a field in Pennsylvania. And, of course, thousands of families were profoundly affected by those events, and they're still affected by those events today. Loss of Liberty and Freedom So, what I am about to say is not to minimize their suffering, but there are 300 million or so Americans who were not personally affected by those events, other than the fact that we certainly empathize with our fellow citizens who did have to endure the tragedy on a more personal level.  But on a broader level, the biggest loss, historically, from those events is not just the loss of lives and the family members who lost loved ones, but all Americans who lost individual liberty and freedom. Self-Inflicted Loss That is the real tragedy, historic tragedy of 9/11. The tremendous loss of individual liberty and freedom. America today is a far less free society than it was prior to those attacks 18 years ago. And that means that the terrorists won. They didn't win based on the damage that they inflicted.  They won based on the damage that we inflicted on ourselves. The self-inflicted wounds are much greater on a national scale than the terrorists' direct acts. And it's not just the 300 million Americans who are alive today. It's all the Americans yet to be born who are going to be born into a society that is far less free than America would have been but for these attacks. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

12 Sep 20191h 3min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 The Numbers Really Look Bad in Private Payrolls Where the  numbers really start  to get bad is when you look at the private payrolls.  There, they were expecting 150,000 private sector jobs created. The private sector jobs are far more important than the government jobs.  The private sector jobs are self-sustaining. The tax payers are on the hook for paying the salaries of the government workers and the private sector employees, by and large are actually productive.  They're making our lives better. Manufacturing is Very Weak They were looking for 150,000 private sector jobs; we got just 96,000 jobs. AND, they revised last month's private payrolls down from 148,000 to 131,000.  Manufacturing - very weak: they were looking for 8,000 jobs - instead, we added just 3,000 manufacturing jobs in August and last month, July, they originally said that we created 16,000 manufacturing jobs and we only created 4,000 manufacturing jobs. 34,000 Jobs Created in Category "Government" Now if you actually look at the breakdown of all the jobs that were created, 34,000 jobs were created in the category of "government".  So, of all the different job categories, the one that added the most was government - 34,000 jobs. I think about 20,000 of these people were temporary hires associated with the 2020 Census. Where's the money coming from to pay for these government jobs?  It's being borrowed. We're borrowing more money to hire more government workers.  Of course, ultimately the taxpayers are on the hook for paying all these salaries, for paying interest on the money  borrowed, to pay all these salaries. Slowest Job Growth in Private Sector Creation in 8 Years In fact, if you look at the private sector job creation so far in the Trump Presidency, this year, 2019, is on track to have the slowest growth in private sector job creation in 8 years. Trump is out there talking about how this is the greatest economy ever - he's the greatest jobs president ever.  We've got the manufacturing sector, the weakest it's been in 10 years, we have the slowest growth in private sector payrolls in 8 years - this is a disaster! Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

7 Sep 201949min

Don’t miss my upcoming appearances: The Las Vegas Trading Conference, Oct. 4-5 The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Silver DID Join Gold's Party Back in mid-July I titled my podcast, "Is Silver Finally Joining Gold's Party?". Well, I think we know the answer to that question. Since I recorded that podcast about a month and a half ago, the price of silver is up another 15%.  In fact, it's up better than 30% since the end of May. Silver having a sterling performance today. As I am recording this podcast, it's about an hour after the close of the U.S. market, we're up almost 90 cents an ounce. We're at 19.22. Gold Still Meeting Resistance at $1,550 Gold, not quite having as strong a day as silver; gold isn't making a new high.  It's up $19.50 on the day: $1548.  Still having some problems with the $1550 resistance area. GLD, the exchange-traded ETF did make a new high for this move, but the spot market did not register a new high - but I think that's just a matter of days - if not hours - before that happens. Silver is Leading the Charge Because silver is leading the charge. It's leading gold higher; pretty much the way I said.  A week ago, I titled my podcast, "Hi Ho Silver, Away" and that prompted a number of people to comment that somehow I had just capped the silver rally by getting too optimistic on silver.  Well, that was a week ago.  We just hit $18.00, we're now over $19.00, and I said on that podcast, I thought we would have a pretty quick move up to about $20, and once we take out $20, I think this thing could really, really take off. Overdue Move Down in the Dollar What is going to be the catalyst, I think, for a much bigger move up in both gold and silver is going to be the long overdue move down in the dollar. Paradoxically, when the dollar starts its decline, it is even possible that gold and silver take a bit of a breather, or maybe pull back a little bit, in terms of dollars, but pull back even more in terms of other currencies. Remember, as strong as gold has been in dollars, it has been even stronger in other currencies. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

4 Sep 201945min