Best Way to Buy Gold in an IRA

By Mykola Kadutskyi,

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Positive Relationship between TRUMP and GOLD PRICES

By alexadmin,

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If Trump were to become president, gold prices will likely perform well, because we expect that his policies will be inward looking and will weaken the fundamentals of the U.S. economy’ Georgette Boele, ABN Amro

 

Trump’s pledge to tear up trade agreements and a rise in overall uncertainty over the policy outlook would likely dent the U.S. economy while spurring a rise in demand for gold, said Georgette Boele, a currency and precious metals analyst at ABN Amro, in a Friday note.

To be sure, Boele’s forecast is based on highly pessimistic expectations in regard to Trump’s likely economic policies.

“If Trump were to become president, gold prices will likely perform well, because we expect that his policies will be inward looking and will weaken the fundamentals of the U.S. economy,” Boele said. “In addition, his rhetoric and possibly policy actions could create domestic and international uncertainty at best, and upheaval at worst.”

 

Weaker U.S. growth would help push gold toward $1,850 an ounce “over the coming years,” she said. That would be a 40% rise from gold’s US:GCQ6 current level just above $1,320 an ounce. Gold has rallied nearly 25% in 2016.

In the note, Boele takes a look at gold’s performance during past presidential administrations stretching back to Gerald Ford’s in 1974. She found that while gold was “very sensitive” to changes in inflation through the early 1990s, the yellow metal’s performance since the Clinton administration has been dictated by a wider range of forces (see table below).

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During Obama’s second term, improvement in the output gap — the difference between an economy’s actual output and its maximum potential output — and a rise in U.S. real yields (yields minus inflation), along with a sharp rally by the U.S. dollar, sent gold tumbling between 2013 and 2015, Boele said. A deterioration of U.S. real yields and haven demand amid geopolitical shocks have allowed gold to rebound this year.

Boele is bullish on gold overall, forecasting a smaller rise toward $1,650 an ounce if presumptive Democratic nominee Hillary Clinton wins in November. Gold would find support due to inflation outpacing growth, forecasts for interest rates to remain negative (though less negative than at present), and a longer-term downtrend for the U.S. dollar.

 

Boele isn’t the only analyst who sees a more pronounced upside for gold under Trump. Julian Phillips, the founder of Goldforecaster.com, agreed that a Trump presidency and a push toward “protectionism” would be negative for growth and “disruptive and divisive for the global economy.”

In addition, a President Trump would rapidly accelerate the transformation of the global monetary system away from its reliance on the U.S. dollar to a multicurrency framework.

“The need for gold in ‘official’ hands will grow in such an environment to smooth out the ruptures in cash flows between nations across the world,” he said, adding that silver would also likely benefit.

ABN Amro’s Boele, however, offered one caveat. Gold could sell off sharply in the unlikely event that U.S. real yields rise and the growth/inflation mix and the output gap see dramatic improvement. That scenario could lead the Federal Reserve to hike rates aggressively amid strong, above-trend U.S. growth.

Source: Market Watch, William Watts

 

 

A Great Opportunity to Stack Up on Gold

By alexadmin,

goldscale

Jim Rickards contact “Goldfinger,” a gold industry insider, first clued us into an important gold flow reversal happening. You might recall their live broadcast. In the months just before that meeting in Zurich with Goldfinger, over 170 tons of gold flowed back into London. Instead of coming out of London, into Switzerland, and then heading over to China and India, China and India slowed down their imports and gold starting to flow back into London.

Since then, the U.S. has become a significant gold importer, if you can believe it. Gold is flowing from vaults in London, Switzerland and even Dubai to destinations in the U.S. (If you’re wondering, there are no gold mines in Dubai; it’s all warehouse gold.)

In May, the U.S. imported more than 50 times the monthly average amount of gold, as compared to the past.

The most interesting thing?

This year, investor demand was the largest component of gold demand for two consecutive quarters (Q1 and Q2) – the first time this has ever happened. This means that more and more U.S. investors are diversifying their assets into gold. They are looking for ways to protect themselves from the monetary tricks that central banks are experimenting with around the world.

goldie1Daily Reckoning

We’re familiar with those tricks here at the Daily Reckoning. The biggest two are the war on cash (see yesterday’s DR issue on that topic) and negative interest rates. The truth is governments don’t want people holding currency on the sidelines of the economy. Governments desperately want people to spend their money as fast as they make it. They know that the global economy is fundamentally weak, even as they try to convince the rest of us otherwise.

After a minor, but much-anticipated, Federal Reserve interest rate hike last December — the first rate increase in 7 years — gold prices bottomed. For a moment, the Fed seemed to convince people that the economy was picking up strength, and investors didn’t need the safe haven of gold anymore. Then, on January 21, 2016, news broke that the Bank of Japan had adopted a policy of negative interest rates. That hit the market hard and gold prices soared.

Not long ago, a study by Merrill Lynch concluded that roughly $13 trillion of government bonds, worldwide, offer negative yield. Here’s a chart to show the rapid growth in negative yielding financial instruments.

goldie2Daily Reckoning

As bad as this chart looks, however, it doesn’t tell the full story. Of that “positive”-yielding debt, about $14.5 trillion pays between 0 and 1%. Overall, about 3/4ths of the world’s sovereign bond market trades at 1% or lower. Just over $2 trillion, or 6%, of outstanding government bonds offer coupon rates better than 2%.

Once negative interest rates were introduced, gold prices began to climb, and they’ve been rising steadily ever since. Here’s the one-year chart of the London gold fix, showing the progress since last winter:

goldie3Daily Reckoning

Seven months ago, gold prices began to move upwards from its December-January low of $1,050 per ounce. This was right around the time the physical gold flows began reversing due to heightened investor demand.

Now, more than halfway through summer, gold has solidly broken through a major resistance at $1,300. We could see $1,550 to $1,600 by March 2017, just six months from now. Silver could make a similar climb, moving from the current $20 range to a near-term level of $25 per ounce. Thanks to the strange world of negative interest rate bonds and bumbling central banks, demand for gold and silver is consistently growing.

Numbers don’t lie. The gold bulls are out in full force. People are buying gold and silver, and putting large amounts of money into small packages of yellow metal.

 

People are finally waking up to the fact that the global economy is not strong. We have sky high bubbles in the markets, and the Fed apparently can’t explain it all away with academic-sounding gobbledygook.  The bottom line is that our U.S. economy is not recovering — indeed, it’s on the brink of a recession. This increases demand for safety. And safety means gold.

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Yet now, we confront a problem:  What about future supply?

Not long ago, I was in Yukon Territory, in northern Canada. I was visiting Kaminak, a gold mining company that has worked up a major new gold prospect which is still a few years away from becoming a mine. Back in May, Goldcorp, one of the largest gold producers in the world, announced that they would buy out Kaminak for $520 million. I spent much of one day on-site with Kaminak and Goldcorp representatives. They were all open and straightforward. And what they told me about gold supply was astounding.

According to Goldcorp, there are “significant supply constraints ahead’ for future gold production. One main reason is found in what they call the “Peak Gold” approach. Across the world, gold discovery peaked in the 1990s. However, according to one Goldcorp rep, “it takes about 20 years to move a project from discovery to initial production.”

goldie4Daily Reckoning

It’s basic logic that production would trail discovery by a significant period of time — you can’t produce what you haven’t discovered. But now, as gold discoveries continue to decline, future production will decline as well. Goldcorp management calculates that gold production peaked in 2015. The trends are all downhill from here.

Now, if a company wants to remain a major producer, it must grow reserves and invest in new discoveries and production.

Goldcorp’s preferred method to stay in the gold game is through “brownfield” exploration and expansion. This means that they focus future growth in existing mine districts that host established discoveries and/or developments and production. Along the way, they’ll seek partnerships with junior companies that are active in these kinds of areas to cultivate a future production pipeline.

But even if more gold discoveries are made today, we still need to wait roughly twenty years for the pace of production to catch up. Meaning the supply of available gold in the world today is declining, just as investor demand for gold is increasing.

And as I noted earlier, China and India have slowed their gold imports in recent months. If their demand increases even back to early 2016 levels, there won’t be enough gold to go around — at least not at the current price…

Let’s make the most of this opportunity.

Right now, in our Strategic Intelligence model portfolio, we have several gold and silver royalty and streamer companies. We also have an exchange traded fund of gold miners. These ideas offer exposure to the upside of rising gold-silver prices via capital gains and dividends over time.

This is an ideal time to buy the physical metals, too.  Jim and I expect that gold and silver prices will climb in the months to come, through the rest of 2016 and into 2017. Still, I understand that you may be reluctant to purchase coins or bullion, due to markups by dealers, storage issues, insurance, and so on. But there are ways for you to buy in at your own pace, without the hassles, yet still, have ownership of metal that you purchase.

All in all, governments across the world are cracking down on cash. Bonds are a zero-yield play, if not negative. Most stocks are sky-high, and market bubbles everywhere await their needle. You are left with preserving wealth via classical, real money — gold and silver. But as demand builds and the production declines, we expect prices to skyrocket.

That’s why it’s imperative that you start getting a 10% allocation of your investable assets into physical bullion now. If you aren’t already building your stash of actual metal, now’s the time.

Source: the Daily Reckoning, by Byron King

A Big Comeback For Gold

By alexadmin,

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Gold is set for a comeback six to 12 months from now, according to UBS.

As long as the Federal Reserve sees no reason to raise interest rates in a hurry, gold should do well, according to strategists at the bank’s Chief Investment Office Wealth Management Research arm.

They see gold prices climbing to $1,350 per ounce over the next year, up 7% from its current level.

Because gold does not bear any interest, it loses appeal when rates rise and investors go after better alternatives.

Also, gold is favored in times of panic and economic stress, when investors are looking for assets that are considered safer.

UBS’ Wayne Gordon and Giovanni Staunovo said in a note that the Fed is still likely to raise its benchmark rate in December, and that may be bearish for gold in the short term.

And so, they forecast that gold could fall to as low as $1,225 an ounce over the next three months. Gold traded near $1,258.60 on Thursday, up by 0.4%.

They noted that Friday’s employment report was not enough to keep the Fed from raising rates later this year. The report was a dud; it showed fewer job gains than expected but did not have many worrying details about the labor market.

But after the Fed hikes rates in December, the outlook for gold should become much better, they said.

“A slow moving Fed and a moderate pickup in inflation should push real interest rates deeper into negative territory in 2017,” Gordon and Staunovo said. “Historically, this has acted as a powerful driver of higher gold prices.”

Gold

Source:  “The Business Insider: The Money Game”

Platinum Bear Cycle set to Break

By alexadmin,

Platinum ingots are arranged for a photograph at Tanaka Kikinzoku Jewelry K. K.'s Ginza Tanaka shop in Tokyo, Japan, on Tuesday, March 11, 2008. Platinum futures in Tokyo dropped for a fourth day as the yen held near an eight-year high and equities fell, prompting investors to sell precious metals to raise cash. Photographer: Tomohiro Ohsumi/Bloomberg News

Legendary investor Stan Druckenmiller, founder of Duquesne Capital Management LLC, told the Sohn Investment Conference in New York last week that he is bullish on gold and bearish on the stock market. Gold, he told the conference, “is our largest currency allocation.”

Druckenmiller recommended that investors sell their equity holdings. “The bull market is exhausting itself,” he told the conference. A major factor has been the Federal Reserve’s easy money policy, which has resulted in “reckless” corporate behavior.

Growing corporate debt is increasingly used for financial engineering, rather than in R&D that could lead to productivity improvements, Druckenmiller said. According to him, from 2012 to 2015, use of debt for U.S. nonfinancial firms for stock buybacks and M&A increased from $1.25 trillion to $2 trillion, while debt for R&D and office equipment grew from $1.55 trillion to only $1.8 trillion.

“The corporate sector today is stuck in a vicious cycle of earnings management, questionable allocation of capital, low productivity, declining margins and growing indebtedness,” Druckenmiller added.

The slowing Chinese economy as another reason to sell equities, according to Druckenmiller. He believes that stimulus measures by China have “aggravated the overcapacity in the economy.” While he had hope two years ago that the Chinese were willing to accept the tradeoff of a slowdown to gain reform, the Chinese “have opted for another investment-focused fiscal stimulus, which may buy them some time but will exacerbate their problem. They do not need more debt and more houses.”

Instead, Druckenmiller has made a move to gold. “It has traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates,” he said. “Some regard it as a metal, we regard it as a currency, and it remains our largest currency allocation,” he added. Among his investments are holdings in the SPDR Gold Trust.

Druckenmiller gained fame in 1992 when, as lead portfolio manager for George Soros’ Quantum Fund, the fund shorted the British pound, a trade that is widely believed to have made $1 billion in profits. Druckenmiller’s Duquesne Capital averaged annual returns of 30% before he converted it to the Duquesne Family Office in 2010.

The Bull Market is Exhausted – Move to Gold!

By alexadmin,

A refinery worker unshackles a bucket of molten copper at Falconbridge?s CCR refinery in Montreal East, Quebec on Wednesday, June 21, 2006. Falconbridge's CCR refinery produces copper cathodes, silver and gold in bars as well as various platinum bits and pieces from rough copper anodes from their smelter in Rouyn-Noranda, Quebec. Photographer: Norm Betts/Bloomberg News.

Legendary investor Stan Druckenmiller, founder of Duquesne Capital Management LLC, told the Sohn Investment Conference in New York last week that he is bullish on gold and bearish on the stock market. Gold, he told the conference, “is our largest currency allocation.”

Druckenmiller recommended that investors sell their equity holdings. “The bull market is exhausting itself,” he told the conference. A major factor has been the Federal Reserve’s easy money policy, which has resulted in “reckless” corporate behavior.

Growing corporate debt is increasingly used for financial engineering, rather than in R&D that could lead to productivity improvements, Druckenmiller said. According to him, from 2012 to 2015, use of debt for U.S. nonfinancial firms for stock buybacks and M&A increased from $1.25 trillion to $2 trillion, while debt for R&D and office equipment grew from $1.55 trillion to only $1.8 trillion.

“The corporate sector today is stuck in a vicious cycle of earnings management, questionable allocation of capital, low productivity, declining margins and growing indebtedness,” Druckenmiller added.

The slowing Chinese economy as another reason to sell equities, according to Druckenmiller. He believes that stimulus measures by China have “aggravated the overcapacity in the economy.” While he had hope two years ago that the Chinese were willing to accept the tradeoff of a slowdown to gain reform, the Chinese “have opted for another investment-focused fiscal stimulus, which may buy them some time but will exacerbate their problem. They do not need more debt and more houses.”

Instead, Druckenmiller has made a move to gold. “It has traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates,” he said. “Some regard it as a metal, we regard it as a currency, and it remains our largest currency allocation,” he added. Among his investments are holdings in the SPDR Gold Trust.

Druckenmiller gained fame in 1992 when, as lead portfolio manager for George Soros’ Quantum Fund, the fund shorted the British pound, a trade that is widely believed to have made $1 billion in profits. Druckenmiller’s Duquesne Capital averaged annual returns of 30% before he converted it to the Duquesne Family Office in 2010.

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Trump discovered a 100-year-old secret that Feds don’t want you to know.

By alexadmin,

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R: Hello Mr. Viera, Thank you for this interview today. What do you make of Donald Trump’s statements about our national debt and likely default?

 

V: Good Morning, Rebecca. Donald Trump needs to be careful about what he says, recently he got in trouble for mentioning a well-known truth that you really can’t talk about because it puts our finance and banking system at risk.

R: how are we at risk?

V: Let me explain. When Donald Trump mentions the possibility of buying back debt at a discount, He seems to have been following Argentina’s treasuries debt restructuring that was just finished by the new president Macri. What he seems to miss is the 12 years of inflation, economic contraction and misery created by such a historical default. In other words, he doesn’t understand the ramifications of these actions. If we attempt something like this the lack of faith in our treasury would ultimately hurt our economy and perhaps push us into default in the U.S.

R: What do you think about the “print the money” statement made on May 9th on CNN?

V: Trump was misquoted from the New York Times and other publications, he wasn’t pushing for the U.S. to default. Trump claims to be the “king of debt” and is telling us the truth that has been going steady since Q.E. or the quantitative easing program. The federal reserve has already bought 4.5 trillion in debt of which 2.7 trillion was in federal securities who were simply “printing the money”. Many critics of Trump say that such money printing will be inflationary but the Fed program has not even been able to create a modest 2% inflation.

R: This 4.5 trillion debt is made from nothing, where did this money go?

A: Well Rebecca, the 4.5 trillion dollars was supposed to end up in banks and be distributed to the people. The banks instead speculate in the market driving up stock prices and real estate. The CPI (consumer price index) is barely moving. The central banks, unfortunately, have been pumping money into the economy without much to show for it. “Growth is mediocre” as put by Christine Lagarde. Chief of the IMF.

R: Mr. Viera, what do you think Trump was truly trying to say?

A: Perhaps Mr. Trump was talking about what is commonly known as monetizing the debt. Since it’s a fake debt,to begin with, where the treasury prints debt in exchange for dollars. Since the Fed is legally allowed to return the debt, to the treasury to be destroyed why not just buy it straight and get it over with. This, of course, would be too much of a shock since the bank needs debt to make money, perhaps this is what Mr. Trump was trying to say.

R: Mr. Viera in your opinion does Donald Trump Know exactly what he is talking about.

A: Good Question, Rebecca, somehow he does understand but without the detailed knowledge, but it is a positive thing that he’s challenging the taboo of money creation. Question is, who should be in control of the money supply? Should it be the public, or done by the government? Should it continue like it is today and be private and held in the hands of banks and the Fed? As our monetary system slows and shows it’s age, crumbling in both Europe and Japan under the weight of negative interest rates. This question will need to be answered in the development of a new monetary system where the dollar might not be the world reserve currency.

The secret is we have been “printing the money” for the last 100 years with nothing to back it up.

R: Thank you, Mr. Viera, hope to speak with you again.

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Which Presidential Candidate is better for Gold?

By alexadmin,

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“The financial market is disintegrating , there is a baseless enthusiasm generated from unfounded liquidity policies that will be our downfall.” – Alex Viera.

Interviewer: Mr. Viera, Which candidate do you believe will have the best effect on your gold investments? Why?

Mr.Viera: I believe if #Hilary were elected it would cause a spike in the sale of gold and an interest in more solid investments. Hilary has a history of an unbalanced state department, and when the U.S. loses faith in the government institutions, they gain faith in tangible commodities like gold.

Interviewer: What does this mean for your 401k or IRA?

Mr. Viera:

At the moment many Americans are seeing their retirement investment quickly declining.I believe that the lack of trust in the government institutions and handling of the existing crisis forces us to look at more secure options such as gold.

Interviewer: Views on Trump vs. Gold?

Mr.Viera: Trump will spend on infrastructure and stimulus spending will be out of control, he’s a real estate developer so he knows how to spend money. This money printing will create high gold prices, and create big deficits.

Interviewer: Do you think Trump has a #GoldIRA?

Mr.Viera: (Laughs) I would assume he keeps bars of gold in his house under his mattress!

Interviewer: Sen. Bernie Sanders effect on Gold?

Mr.Viera: It’s hard to say, Sanders most likely will follow the trend of other democrats and increase spending. The increase in taxes will probably change the rate on which we spend as consumers perhaps creating more balance in the price of gold.

Interviewer: Any closing statements on the election?

Mr.Viera: I’d choose the lesser of the two evils, although it’s unfortunate it’s come to this election after election. People have lost faith in the system and the money system in place doesn’t represent us anymore…

This conversation is an excerpt from an interview on the 2016 presidential elections with Mr. Alex Viera.

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Do You Really Know How Your 401K/IRA is Doing?

By alexadmin,

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Obama’s last stand as president has him pushing for justice among retirees who are getting swindled by brokers, too bad his bill will never make it through the houses chopping block. This Thursday the bill to “force brokers to keep their clients best interests in mind” was shot down by 234 representatives and supported by 188. Earlier in April, the Obama administration released this rule that will create a standard for financial brokers to keep their clients’ interests above their bottom line.

This isn’t the first time this rule has been in limbo. It was first proposed in 2010 and a year later the Labor Department had to retract it because of fierce industry disapproval.

Many Politicians and Financial Business owners are saying passing it would make buying options very expensive for Americans, and put a burden on stock brokers. They also argue that the rule doesn’t include other laws and regulations regarding financial advice.

“Bureaucrats in Washington, D.C. have no business getting between you and your financial planner. But that’s what the Obama administration’s fiduciary rule does,” say’s speaker Paul Ryan, The senate would have to pass a version and send it to congress before Obama can sign it into law. Obama states that the bill, “reflects extensive feedback from industry, advocates, and members of Congress, and has been streamlined to reduce the compliance burden and ensure continued access to advice.”

What does this mean for your retirement investment? A lot actually, since brokers are not held accountable for selling you assets that you don’t need, and nobody wants to buy, which generates the higher commissions for the broker (and the worst returns to you) from your hard earned cash. There is about $11.5 Trillion dollars at stake in 401k/IRA accounts, making retirees a prime target for fraud and questionable/unethical investments.