Drag to Reposition Photo

Hard Assets Alliance

Located in United States.
by on January 6, 2022
Our quarterly report—what we prepare for institutional investors—examines the performance of gold and silver vs. other major asset classes during the fourth quarter and full year of 2021. We also review the conditions that could ignite their prices in 2022.   The big story in 2021 was the jump in inflation. And then the Fed’s announcement in Q4 that it plans to raise interest rates multiple times in 2022. Gold and silver ended last year slightly lower, but with new policy and economic shifts emerging, are they poised for a reversal to the upside? Let’s start by looking at their context… Gold and Silver Rebound in Q4 Gold slipped 1.2% in Q3 last year, and silver dropped 16.5%. But both rebounded in Q4. Real estate continued to soar, beating out the major stock indexes, which also logged healthy gains. Gold rose 4.4%, while silver gained 7.2%. Commodities took it on the chin. Dow 50,000? Can this bull market last? 15 experts gather to share their surprising forecasts... The stock market begins the New Year capping off its best 3-year run since 1999. An ominous record to beat, since stocks crashed shortly thereafter in 2000. But times have changed. The Fed is more involved in the markets than ever. So will history repeat itself? Or will the bull rage on?   To answer that, our friends at Wealthion have assembled a “dream team” of 15 financial experts including Jim Rickards, Jim Grant, Lacy Hunt, Luke Gromen, Rick Rule, Danielle DiMartino Booth, and many more... for an exclusive Jan 22 online conference. You’ll get their forecasts for the year ahead as well as strategies and simple portfolio adjustments you can make today to successfully navigate the changes and challenges ahead. It’s a must watch event and perhaps the most important time of the year to attend. Learn More → The stock market begins the New Year capping off its best 3-year run since 1999. An ominous record to beat, since stocks crashed shortly thereafter in 2000. But times have changed. The Fed is more involved in the markets than ever. So will history repeat itself? Or will the bull rage on?  To answer that, our friends at Wealthion have assembled a “dream team” of 15 financial experts including Jim Rickards, Jim Grant, Lacy Hunt, Luke Gromen, Rick Rule, Danielle DiMartino Booth, and many more... for an exclusive Jan 22 online conference. You’ll get their forecasts for the year ahead as well as strategies and simple portfolio adjustments you can make today to successfully navigate the changes and challenges ahead. It’s a must watch event and perhaps the most important time of the year to attend. Learn More → 2021: Outside Forces Pressure Gold & Silver 2021 ushered in some long-desired optimism on the part of investors and consumers, despite lingering effects of the pandemic. The economy rebounded and markets soared.     Oil and real estate were clear winners last year, along with the broad stock market.   Outside of US Treasuries, only gold and silver fell. Gold ended the year down 3.8%, and silver fell 12.9%.   Which begs the question… Why Were Gold & Silver Down With Inflation Spiking? It’s confusing that gold and silver would be weak in a year that saw inflation rise both abruptly and significantly. A deeper analysis provides some answers:   1. Until recently, the market accepted the message that inflation would be transitory. Mainstream investors didn’t buy an inflation hedge since they thought the CPI would come right back down. 2. According to multiple sources, more cash poured into equity funds in 2021 ($900 billion) than the last 20 years combined. Clearly it was a risk-on environment (stocks), not risk-off (gold). 3. The U.S. dollar, typically inversely correlated to gold, rose 6.4%. 4. Economic growth beat most analyst expectations. 2020 fears turned to 2021 optimism. The question in front of investors now is, do these trends continue—or do they reverse and unleash the next uptrend in gold and silver prices? How Deep Are 2022’s Potholes? While market and economic risks are always present, it’s hard to overstate the number of potholes in the road as we enter the near year. The following factors could serve as a catalyst for gold and silver in 2022. Pandemic Persistence. Omicron appears less virulent than previous variants but is more contagious, which means that hospitalizations could remain high. Omicron was responsible for at least 41% of all U.S. Covid cases in December. Its spread could suppress consumer demand and exacerbate supply-chain bottlenecks.   Stubborn Inflation. According to research firm IRI, food prices are expected to rise 5% in the first six months of 2022. Wheat and corn were each up over 20% in 2021, while soybeans hit a third consecutive year of rises. Will they stay elevated? According to the CEO of fertilizer giant Yara International, that answer is a resounding yes. “I want to say this loud and clear right now: we risk a very low crop in the next harvest. I'm afraid we're going to have a food crisis.” Consumer analyst Julie Ramhold at DealNews.com was equally bleak about higher food costs: “I really don’t think there’s any way to escape.”   And it’s global. UK inflation is already over 5% and is expected to hit 6% in 2022, what would be a 30-year high. Alcoa in Spain halted aluminum production for two years due to soaring energy costs, Europe's second-largest aluminum plant, and the biggest aluminum smelter had cut output the week before. India's market regulator suspended futures trading in farm commodities to fight inflation. And of course Turkey has runaway inflation, its annual rate recently hitting 36%.   Citizens feel it, too. According to a Bankrate survey, 26% of Americans believe their financial situation will be worse in 2022, and of those 70% blame inflation. “People are getting worried about inflation continuing to rise,” reports Forbes.   It’s true that some parts of the current inflation spike probably are transitory—but now wages are rising, which could keep inflation elevated for years. If so, the Fed will be under increasing pressure to raise interest rates. Which ushers in problems of its own...   Interest Rate Increases. The Federal Reserve announced it will raise interest rates multiple times in 2022. “It’s going to be the first time in almost two years that the Fed’s incremental decisions might force investors or consumers to become a little more wary,” says David Schawel, CIO at Family Management Corp.   To the surprise of many investors, gold and silver have historically risen during rate hike cycles. They tend to fall at the initial hike, but in the last four periods they both ended higher by double digits.   The bigger question is, will rate increases take some air out of the economy or stock market? When combined with a reversal in the Fed’s emergency asset purchases, it’s hard to imagine there being no impact.   Growing Gold Demand. Comex gold deliveries in 2021 were more than triple the 15-year average. U.S. Mint gold coin sales hit their highest level, over 1.25 million ounces, the most since 2009. In China, retail gold sales have rebounded, with the strongest sales surprisingly coming from 20- and 30-year olds. In India, gold imports hit a record $55.7 billion in 2021, surpassing 2019’s high and more than double 2020.   Meanwhile, central banks continue to buy gold, with global reserves now at a 31-year high. As a group they’ve been net buyers since 2010, and this shows no signs of letting up. According to a survey by the World Gold Council, for the first time in years the #1 reason emerging market central banks bought gold is its “performance during crisis situations.”   Fed Watch and Debt. In addition to the normal rotation of voting members, the Biden administration will fill three vacant seats on the Fed’s Board of Governors. Public comments from the other three Federal Reserve Bank presidents suggests that the 2022 committee will be more “hawkish.”   Meanwhile, the Fed's commitment to phase out Libor isn’t completed (as was projected to end last month). According to the Financial Times, there are still $230 trillion in existing contracts that rely on the benchmark. This is the moment when the past four years of preparation to live without it goes into effect. Dixit Joshi, group treasurer at Deutsche Bank, said “It’s one of the biggest transitions in financial markets in decades. This is a milestone for the regulators.”   Last, US debt continues to not only grow, but according to Treasury data it increased in December by 50% of what had been seen in all of 2021.   Frothy Investment Markets. By almost any measure, financial markets remain frothy, if not outright bubbly. Stocks are expensive, real estate prices are far above their mean in most advanced economies, meme stocks and crypto assets are still arguably in a craze, and government bond yields remain ultra-low. Any sort of “normalization” process could deflate asset prices—and drive investors to gold.   Midterm Elections. While not until November, it goes without saying that the US is experiencing an elevated level of political polarization. Democrats have a minor advantage in the House and a thin majority in the Senate; with President Biden’s low approval rating, Republicans would be able to block any legislative move by winning one chamber. This will likely push Democrats to make big changes before the election, including finally passing their social spending bill and perhaps higher taxes, the latter of which could hurt stocks.   U.S. Dollar Weakness? Most analysts seem to agree that the first couple months of 2022 could be kind to the dollar. However, a number of them see it as vulnerable, based on a positive climate for risk and commodities, along with simple overvaluation. Also, some chartists say the dollar has broken down through support.   Military Interventions? President Biden has repeatedly warned Russian President Vladimir Putin that he is prepared to “respond decisively” if Russia invades Ukraine. Some argue the Russian economy has become more resilient to sanctions than it was in the past, so such threats may be less of a detriment, perhaps increasing the likelihood of an invasion.   Meanwhile, China has increased its military pressure on Taiwan and in the South China Sea, where territorial disputes continue to brew. And Iran is now on the threshold of becoming a nuclear state, with negotiations basically going nowhere. In response, Israel has openly stated it is considering strikes against Iranian nuclear facilities.   Last, Biden recently signed a $768 billion defense policy bill, a major increase in military spending. How Deep Are 2022’s Potholes? I think Hilary Allen, law professor at American University, asks a good question. “Is the current moment the dot-com bubble—or the lead-up to the 2008 financial crisis? If it’s just a dot-com bubble, it sucks for investors. But if it’s 2008, then we’re all screwed, even those of us who aren’t investing.” Either answer argues for investors to be prepared.   And there’s perhaps no better way to get you and your portfolio ready than by attending the Wealthion online conference on January 22.   I’ll be presenting along with a panel of 14 of the sharpest financial experts who will give their strategies for navigating the year ahead.   Precious metals investors will enjoy the mix of macro insights, commodity and hard asset specific investment presentations, and as well as the chance to interact with like-minded speakers and attendees.   Here are all the details of the online conference including the full line-up of speakers and the agenda.   The other way you can prepare today is to check your physical gold and silver holdings to make sure you have the ounces you need for the road ahead.   The circumstance of stubborn inflation, elevated political conflicts, and overpriced stock and real estate markets creates an ideal scenario for gold and silver.   Based on the number and potential severity of the risks entering 2022, it would not be surprising to see the gold price achieve new record highs this year. And silver to outperform if gold takes off. By Jeff Clark, Senior Analyst, Hard Assets Alliance Website WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 1 view 0 likes 0 comments
Read more
by on November 22, 2021
The Golden Constant Is Back It used to be a doctrine. When inflation picks up, so does the gold price. Generations have figured this out, and gold has never gone away as the go-to safe haven asset. After 40 years of relatively low inflation, it’s become perhaps unfashionable, but the fundamentals that have made it a safe haven for thousands of years are still with us.   It used to be the case that you would follow the inflation numbers, and adjust one’s portfolio based on the outlook by buying gold and mining stocks. Today, it might be wise to reverse that: follow the gold price and you gain great insight into the future of inflation. Gold has come alive, reaching $1,800. Central bank purchases, consumer demand, shifts in portfolios by individual account holders all play a role here. The conviction that inflation is bad and getting worse all play a role here. Fiat money has not in our lifetimes had such a bad reputation and prognosis. At the same time, the best way to understand the rise of an inflation hedge is to view it in real terms, which is to say adjusted for the manner in which the dollar itself has depreciated. Here you get a different picture. In real terms, by today’s dollar, gold of October 1979 was running $489. By the end of the year, in today’s dollars with adjustment, gold reached $1,800. That is where we sit today. In other words, in real terms, and depending on how you calculate inflation today, we are nearing or at a high.   For some people, this development is inevitable. Gold has been called a “constant” for a reason. It is a hedge, not a means of profiting as such but as a protection against the chaos of the world. That’s saying something important. It is a wise move, but not necessarily a means of gaining riches — unless and to the extent that we really face an out-of-control hyperinflation. For other people, the activity in gold today might be a bit of a surprise. The only serious competitor that gold has had in our times has been the advent of cryptocurrency. It has all the features of gold. It is scarce, indestructible, fungible, and has an even quality across all possible units. Bitcoin and others add two features that make it even more attractive. It is weightless and instantly transferable without the cost of physically moving the stuff from place to place. There is a downside to crypto. Using it requires access to the Internet under general conditions. If your cell phone dies because the electricity is out, you are out of luck. If the government shuts down the Internet, you are also stuck. All of that is true, but there are several confusions people have here as well. Myth and Fact First, it is possible to have physical bitcoin. You can print out your wallet on a piece of paper. You have it and can use it, even if you go years without internet access. Many high-end holders do this and keep it in a safe. That way, there is no way to gain access to it merely by getting access to the online wallet that stores your encrypted key.   Second, even if you lose access for however long (let’s say you get shipwrecked on a deserted island), that does nothing to change your ownership status. If you have your passphrase stored somewhere (or, more implausibly, memorized) you can recreate your access merely by typing that code in at some point: tomorrow, next year, or in a hundred years. Your money is still there. Third, if you die, even then your ownership is not in question, since none of it exists under your personal identity as such. Your access is controlled by whomever has access to your private key. Therefore, you can store your codes in an email or program somewhere or on paper, and put the instructions on how to get to it in a will or some other method. Whomever gains access to that is now the owner of your holdings. For this reason, it is not really possible to enforce some legal action against anyone who “steals” your bitcoin. In some sense, it is a free-for-all. Anyone who hacks your wallet, or anyone to whom you send you units whether on purpose or by mistake, is now the owner. This is the “law” of cryptocurrency. This is why it is a huge issue to maintain tight security protocols. This problem is not unique to crypto. Gold too had this issue. When FDR demanded that everyone turn in his gold in 1933, only a portion of the population complied. The rest —I’m thinking of very wealthy families mostly in the Northeast at the time and some in the West — had to figure out a way to hide it in their backyards or find a trusted third party who would hold it for decades until it became legal again. There were such options available, but they were kept super secret. Estates around the country in remote locations fashioned themselves as safe houses for gold storage. They kept the secret through the whole of the Great Depression, World War II, and all the way until 1974 when owning gold became legal again. Then their descendants took off to pick up what had been left behind. In this way, gold and Bitcoin both face a problem of security. It is up to the individuals to solve it. The Big Question For the last 13 years, the question people have asked is whether and to what extent crypto has replaced gold as the favored safe haven asset. I’ve seen fierce debates on this. I’ve always believed that they were silly debates. Both serve that purpose.   From a market point of view, gold is going to be more stable, whereas crypto is still in the early stages of price/value discovery. It very likely has a long way to go on the upside. It will eventually settle at some range of price and then respond to inflationary trends in a way that is similar to gold. For this reason, it attracts speculation in a way that gold does not. The bottom line is that we do not have to choose between them. Both are better assets than dollars right now, or at least perform well enough to suggest that a readjustment of the portfolio is in order, given existing trends. They play well together. There is no reason for a war between gold and Bitcoin, or between Bitcoin and every other crypto alternative. What seems increasingly certain is that the dollar, and other fiat currencies, are facing extremely challenging times. Whether that alternative is real estate, hard money, or crypto assets, or even oil and other commodities is in question. That the dollar faces a serious threat to its value is no longer in doubt. By Jeffrey Tucker Jeffrey Tucker is an independent editorial consultant who served as Editorial Director for the American Institute for Economic Research. He is the author of many thousands of articles in the scholarly and popular press and eight books in 5 languages, most recently Liberty or Lockdown. Signing up is easy. It only takes 5 minutes to set up and start precious metals investing on our secure platform that gives you competitive pricing, fully allocated ownership, with optional secure international storage or delivery and full transparency and safety. Open Hard Assets Alliance Account Today For more postings by Hard Asset Alliance, click HERE Website WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 1 view 0 likes 0 comments
Read more
by on November 12, 2021
• Never in human history has “fake” money like the fiat U.S. dollar survived… • It’s tempting to think the Fed can keep up the game forever… • But the evidence suggests the dollar’s days are numbered... • Which means you need to protect the wealth you build from inflation by buying gold.   Dear Reader,   For more than a decade I traveled the world looking for gold and silver mines. It was an incredible education, working with Frank Crerie to take these mines public. I remember looking at the side of a hill in the Peruvian Andes at a line of holes, small gold mines, and following a gold vein in that hill. My mining geologist told me those tiny holes produced gold for the Incas, long before Francisco Pizarro arrived from Spain, killing their leaders and then stealing their gold. One of our most successful mines was an old silver deposit in a remote part of southern Argentina. Our group took that mine public on the Toronto Stock Exchange when silver was less than $3 an ounce. We did very well once silver broke $7 per ounce. Today, silver bounces at around $15 an ounce. Too bad we sold at $7! Our biggest acquisition was an old mine in China. We got the Chinese mine for “nothing down.” The agreement was that the Chinese government would give us the mine if we would raise money by taking the company public on the Toronto Stock Exchange, which we did. The good news is that we found a massive deposit. Millions of ounces, “proven.” For about a year, we knew we were billionaires. Our Chinese goldmine had a Spanish portmanteau: Mundoro Mining, or a world of gold. Then one day, a government official notified us that the Chinese government was not going to renew our business license. Today, that mine is in the hands of friends of the Chinese elites, who are billionaires. The lasting impression left by my years of searching for gold was just how lasting it’s value has been throughout history. From the time of the Incas, when the Spanish stole that treasure… to our era when the Chinese stole mine. Humans have always valued God’s money. And they will continue to. But at the same time, we’ve lost our way by putting to much faith in fiat money. Why do we trust people we don’t even know? Why do we believe the elites just because they write the words “In God We Trust” on our fake money? In fact, we have every reason not to. Look at this chart below: Now, look at the chart of what happens to fake money, when our leaders print more fake money. The bad news is, never in human history has fake money survived.     Which means, the odds are that all of today’s paper money will return to its true value: zero. Savers Are Losers Many people believe it’s smart to save money. The problem is that today, “money” is no longer money. Today, people are saving counterfeit dollars, money that can be created at the speed of light.   In 1971 President Nixon took the U.S. dollar off the gold standard, and money became debt. The primary reason why prices have risen since 1971 is simply because the United States now has the power to print money to pay its bills. Today, savers are the biggest losers. Since 1971, the U.S. dollar has lost 95% of its value when compared to gold. It will not take another 40 years to lose its remaining 5%. Remember, in 1971, gold was $35 an ounce. Today, it’s $1,830 an ounce. That’s a massive loss of purchasing power for the dollar. The problem grows worse as the U.S. national debt escalates into trillions of dollars and the U.S. continues to print more “counterfeit” money. As the Federal Reserve Bank and central banks throughout the world print trillions of dollars at high speed, every printed dollar means higher taxes and more inflation. Despite this fact, millions of people continue to believe saving money is smart. It used to be smart when money was money. The biggest market in the world is the bond market. “Bond” is another word for “savings.” There are many different types of bonds for different types of savers. There are U.S. Treasury bonds, corporate bonds, municipal bonds, and junk bonds. For years, it was assumed that U.S. government bonds and government municipal bonds were safe. Then the financial crisis of 2007 began. As many of you know, the crisis was caused by mortgage bonds such as mortgage-backed securities, a type of derivative asset. Millions of these mortgage bonds were made up of subprime mortgages, which were loans to subprime or high-risk borrowers. You may recall that some of those borrowers had no income and no job. Yet, they were buying homes they could never pay for. The Wall Street bankers took these subprime loans and packaged them into bonds, magically got this subprime bond labeled as prime, and sold them to institutions, banks, governments, and individual investors. To me, this is fraud. But that is the banking system. Once the subprime borrower could no longer pay the interest on their mortgages, these bonds began blowing up all over the world. Interestingly, it was Warren Buffett’s firm, Moody’s, that blessed these subprime mortgages as AAA prime debt, the highest rating for bonds. Today, many people blame the big banks, such as Goldman Sachs and J. P. Morgan, for the crisis. Yet if anyone should be blamed for this crisis, it should be Warren Buffet. He is a smart man, and he knew what he was doing. Moody’s was blessing rotting dog meat as Grade A prime beef. That is criminal. Is China the Biggest Loser of All? China could be the biggest loser of all. China holds a trillion dollars in U.S. bonds. Every time the U.S. government devalues the dollar by printing more money and issuing more bonds, the value of China’s trillion-dollar investment in the United States goes down. If China stops buying U.S. government bonds, the world economy will stop and crash.   Millions of retirees are just like China. Retirees in need of a steady income after retirement believed government bonds were safe. Today, as governments, big and small, go bust and inflation rises, retirees are finding out that savers who saved money in bonds are losers. Bet on Gold and Silver As the dollar declines in value, I’m betting on gold and silver instead of dollars. The Rich Get Richer With Real Assets Robert Kiyosaki is the author of the bestselling book Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur and successful investor. The wealth gap has never been wider than it is today. In order to protect and grow your wealth you must own real assets. If you rely solely on paper assets you’ll wake up one day and realize that Wall Street and the government have stolen all your wealth. The easiest way to get started with real assets is NOT real estate. The easiest way to get started owning real assets is with gold and silver. You can still get silver eagles for less than $40 a piece… but maybe not for very long. If you’re looking to own physical gold and silver, the Hard Assets Alliance has the products and the services you need. You can get a stack of silver delivered to your home. Or you can invest in gold through your IRA for long-term wealth preservation. No matter how you want to own your gold, the Hard Assets Alliance has you covered. Robert Kiyosaki Editor, Rich Dad Poor Dad Daily   Hard Assets Alliance was created as a cooperative of investment professionals who believe there's a better way to invest in precious metals. This is a guest perspective on the markets from one of these partners; we hope you enjoy it. For more postings by Hard Asset Alliance, click HERE Website WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 0 Views 0 likes 0 comments
Read more
by on October 14, 2021
It’s frustrating to watch gold and silver languish when they’re surrounded by major catalysts and since, well, everything else is going up. More than frustrating, it’s bewildering. But what if I told you gold and silver have been in a near-identical scenario before. And that it led to one of their biggest gains in history… Gold’s Déjà vu In the mid-1970s, inflation was soaring, unemployment was high, the US was in a recession, an energy crisis had just kicked off, and there were both political and geopolitical issues. Sound familiar? And yet, from 1974 to 1976, the gold price fell by over 40%, stretched over a two-year period of time. A falling gold price with major catalysts in play that at the time many thought would push it higher. Yet it defied logic and tumbled. Yes, this sounds very familiar. Here’s that two-year gold price action overlaid with today’s price. Despite a strong environment for gold, the price was in a relentless downtrend.   Today, we’re also surrounded by numerous gold-positive factors, and yet you can see that the price behavior is very similar. As you likely know, however, that mid-1970s period, as confusing as it may have been to investors, ended up being only one chapter in gold’s book. And the next chapter, for those that held on, was a whole lotta fun. The gold price rose 717.3% from its 1976 low to its 1980 high. What seems clear is that gold was simply coiling, building up more and more pressure, since the catalysts that puzzled investors early on finally blew the lid off the price. In my view that’s exactly what’s happening now, too. We have a falling price, yet the catalysts are building up more and more pressure, to a point where reality catches up and leads to an explosion in gold. What about silver? The Silver Jail Break   The current silver price is even more eerily similar to the mid-1970s than gold. This compares both price periods after their initial crash, as I wanted to zoom in to see if they were behaving similarly—and you can see they indeed are. Like gold, the silver price was surrounded by factors that most thought would push it up, similar to today, but it remained weak for two years. And also like gold, the next chapter in silver would prove all doubters and naysayers horribly wrong. The spring under silver was basically coiling, eventually leading to a blow-off top that stunned the investment community and led to full-blown mania. Silver rose over 11-fold, from its low to high, in four years. For the investor who bought near the mid-70s low and sold near the 1980 top, they basically could’ve added a zero to their investment. Again, this setup sounds awfully similar to what we have today. A falling silver price, surrounded by major catalysts, that are likely doing nothing but tightening the spring under the price, to a point where it’s likely to explode in the near future. The Spring is Tightening The message here is clear. Unless there is such a thing as a free lunch, the economic, market and monetary catalysts surrounding gold and silver today are building the pressure under them greater and greater. Our job is to make sure we’re financially prepared for what is shaping up to be an event that ignites an explosion in gold and silver prices. We hope you have enjoyed this article by our guest writer. If you agree that now is a good time to own precious metals, log in to your Hard Assets Alliance account, check your exposure, and consider adding to your physical metal positions today. By Jeff Clark, Senior Analyst, Hard Assets Alliance For more postings by Hard Asset Alliance, click HERE Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 0 Views 0 likes 0 comments
Read more
by on September 17, 2021
        Hard Assets Alliance was created as a cooperative of investment professionals who believe there's a better way to invest in precious metals. This is a guest perspective on the markets from one of these partners; we hope you enjoy it. Hard Assets Alliance was created as a cooperative of investment professionals who believe there's a better way to invest in precious metals. This is a guest perspective on the markets from one of these partners; we hope you enjoy it. Dear Reader,   The Fed is considered the “lender of last resort.” But is it really? Today, we’re going to see why that’s not true and why the Fed is basically irrelevant. Let’s dive in...   The dollar is the world’s leading reserve currency. Dollar-denominated assets make up about 60% of global reserves, and dollars account for about 80% of all payments and almost 100% of all oil and natural gas purchases. Dollar-denominated markets in stocks and bonds are multiples of markets priced in other currencies. The EUR/USD cross-rate is by far the most heavily traded foreign exchange pair in the world. The Federal Reserve System creates dollars. They do this by buying U.S. Treasury securities and other assets from bank dealers and large institutional investors. When the Fed buys securities, they take delivery from the banks and pay for the securities with dollars that come from thin air. (The same system works in reverse. When the Fed wants to reduce money supply, they sell securities to banks for dollars and those dollars simply disappear.) If the world runs on dollars for trade, commerce and reserves, and if the Fed is the official source of dollars, it would seem to follow that the Fed is the world’s lender of last resort. When there’s a run on money market funds or banks are nearing insolvency or major corporations such as AIG or General Motors are nearing bankruptcy, the Fed can swoop in, buy assets, create new lending programs, cut rates to zero and take other extraordinary actions to keep the system afloat. In that sense, the Fed poses as the global lender of last resort. But the reality of the financial system is much more complicated and more opaque than the Fed narrative suggests. To understand why, some historical perspective is helpful… Few Americans realize that the U.S. had no central bank for 84 years out of its 232-year history. Those 84 years, 36% of the country’s history, included some of the most prosperous and innovative periods in that history. George Washington was sworn in as the first president in 1789. The First Bank of the United States was given a 20-year charter from 1791–1811. The Second Bank of the United States had a 20-year charter from 1816–1836. The Federal Reserve System was created in 1913 and exists today. This means the U.S. had no central bank from 1789–1791, again from 1812–1816 and again from 1836–1913. During those periods that the U.S. had no central bank, there was no official lender of last resort. If such a lender were needed in a financial panic, it had to come from the private sector — or not at all. This state of affairs culminated in one of the greatest financial rescues in U.S. history — the Panic of 1907. The panic was a consequence of the San Francisco earthquake of 1906. Western insurance companies had to sell assets to satisfy damage claims. This put pressure on New York banks to provide liquidity. In the middle of a budding liquidity crisis, a fraud occurred involving lending by the Knickerbocker Trust and others in an attempt to corner the market in the stock of the United Copper Co. When the fraud was revealed, a full-scale banking panic erupted. This led to the ninth-largest stock market crash in U.S. history. J. Pierpont Morgan convened a meeting of New York City’s top banks in his townhouse in the Murray Hill section of Manhattan to assess the damage. He instructed his agents to examine the books of all of the major city banks. These banks were divided into three categories: those that were sound despite the panic, those that were solvent but illiquid and those that were insolvent. It was financial triage. Pierpont’s plan was to have the sound banks lend to the illiquid banks to see them through the crisis. The insolvent banks would be allowed to fail with losses to depositors and stockholders. The bankers could not agree at first, but Morgan had his servants lock them in his library and told them they would not be allowed out until they had a plan. By the next morning, they had agreed. The plan was announced, the illiquid banks were saved and the panic was soon over.   Despite that success, the bankers and politicians realized that J. Pierpont Morgan was one of a kind and would not live forever (Morgan died in 1913). A lender of last resort was needed that would be institutional and would not rely on any one individual or private bank. For more postings by Hard Asset Alliance, click HERE Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 0 Views 0 likes 0 comments
Read more
by on September 1, 2021
They say to buy straw hats in winter, and stack your firewood in summer. That advice is based on the simple fact that seasons change, and preparing for the next season is easier and cheaper and more useful before it begins to switch. Similarly, we know winter is coming for the economy and markets. It may not feel that way at the moment, but nothing goes up indefinitely. And when things shift, it will likely kick-start the next surge in gold and silver. It may be winter right now for our two favorite metals, but spring and summer are coming (and winter for non-gold holders). Are you fully prepared for it? The worst feeling in the world—worse than how you may feel now about lagging prices—would be to find yourself with too little metal and too much risk. You’d hate to be scrambling to figure out what to do in the middle of an economic or market breakdown. Here’s a checklist I’ve used myself that you might find useful. Here are five questions to ask yourself to make sure you’re ready for the coming change in season… #1. Do I Own PHYSICAL Metal? We live in a world of paper assets, obscene government spending, and watered-down currency. Physical gold and silver are none of these things. They stand alone as real money, in a world where nothing else is. That’s been the case for many years, but the financial condition of the U.S. and many other advanced economies put us all on a path eerily similar to the fall of the Roman Empire. When things start to break down, the world won’t end but it just may feel like it. • The upheaval could be so rocky that you’ll need more than just exposure to the gold price; you may need the actual metal. Gold ETFs and other vehicles may offer some protection for your portfolio, but they may not offer protection for your lifestyle. Only physical bullion can withstand the worst the economy and market can throw at you. #2. How Well Prepared am I for Persistent Inflation? Many still believe the Fed when they say inflation will be transitory. But even some in the mainstream community are starting to doubt that, based on the fact that the CPI remains stubbornly high. There aren’t many episodes in history where inflation spiked and then suddenly fell back down to where it was within a few months. It usually sticks around for a while. And sometimes gets out of control. This video shows it could hit 9% this year alone. Here’s the point: • The higher and longer you think inflation goes, the more gold and silver you need. If your household becomes compromised in any way, having a healthy stash of bullion can help you get through it. “It’s Smooth Sailing From Here Boys!”   Whatever happens, inflation, deflation, a new COVID variant… you’re gonna need a proven safe haven that’s protected investors time and time again no matter what. Save yourself the time and headache of listening to “experts” and pick up history’s best wealth protector! Click here to discover the safest, and easiest way to invest in precious metals. #3. Do You Own Some Gold, Not Just Silver? Our readership knows that physical gold and silver share many of the same characteristics. They’re money, are tangible and portable, and can be sold almost anywhere in the world. But they don’t necessarily react to every event the same. Gold usually rises in recessions, but silver usually falls… gold usually rises in stock market crashes while silver struggles… and central banks buy gold for their Reserves, lending support to its price, but they don’t buy silver. Each metal has distinct advantages over the other. Yes, we stand to earn more profit on silver than gold, but… • The best advice is to have exposure to both silver and gold, not just one, in order to withstand ALL events. The easiest and cheapest way to do that is with our MetalStream service, an easy, automated way to save in gold. #4. How Safe is My Bullion? We got hit with an earthquake last month. It was a tad scary, because the house was literally shaking and swaying. My wife and I ran to the dining room table and were prepared to jump under it, even after it stopped, in case aftershocks came. I don’t keep any bullion in the house, partly because I’m in the public eye and partly because I’ve had gold stolen before. And now I have a third reason; I wouldn’t be very happy if my metal fell into middle earth during an earthquake. Physical gold and silver don’t come with a return-receipt. It’s a good idea to keep some bullion close, in case you need it in an emergency. But as your stack grows, it’s only prudent to keep most of it out of the house. Remember, as gold and silver prices increase, you become a greater target. I see a lot of pictures on twitter of people posting their stacks of bullion. While most are good at not showing clues of where they live, all it takes is someone who follows you to figure it out. Social media is an increasingly common way to communicate, but it’s not good for displays of wealth. I encourage you to diversify where you store your bullion, especially as your stash grows, the reason being you don’t want your physical fortune wiped out in one tragic mishap. Also, here’s a money-saving trick you can use for storage: buy bars, because they have lower premiums. #5. What’s My Exit Plan? It may feel odd to discuss this topic when gold and silver prices are going nowhere. But you need to formulate your plan now, so that you’re not scrambling to figure it out when an economic or market emergency strikes. Whatever your plan might be, I encourage you to formulate it now. Even if it has to be modified due to circumstances at the time, you’ll be operating from a position of strength instead of floundering about and wondering what to do. Are You Ready for the Next Surge? History says the next upsurge in gold and silver is coming. The research clearly shows it is a when question, not if. I want all of our readership to be fully prepared to capitalize on the opportunity, regardless of how bad things might get in the economy and markets. Becoming part of the new wealthy is likely to happen only for the holders of physical gold and silver. Together, let’s all be ready for it. Regards,   Jeff Clark Senior Analyst, Hard Assets Alliance For more postings by Hard Asset Alliance, click HERE Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 0 Views 0 likes 0 comments
Read more
by on August 9, 2021
Gold fell more than 4% at the start of Asian trading early this morning following the sell-off inspired by Friday’s strong payroll numbers. The sudden “flash crash” was likely the result of gold falling through a key technical support level which triggered selling from large institutional traders.   Although gold has recouped much of its early losses today, it remains under pressure surrounding speculation the Federal Reserve may start to taper stimulus.   It’s a similar story for silver…   Silver briefly touched $23/oz, a new low for the year, before quickly rebounding. For now, gold and silver appear to have stabilized… but both remain 1% lower than their Friday close.   Silver is at its cheapest price since last November.   And with fresh inflation data releasing Wednesday, August 11, the wild ride for precious metals could continue as the market and central bankers react to the numbers. Don't have a Hard Assets Alliance account? Signing up is easy. It only takes 5 minutes to set up and start precious metals investing on our secure platform that gives you competitive pricing, fully allocated true ownership, with optional secure international storage or home delivery and full transparency and safety. For more postings by Hard Asset Alliance, click HERE Hard Asset Alliance is also listed in the Marketplace Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 1 view 0 likes 0 comments
Read more
by on June 30, 2021
Most headlines about the Fed’s open market committee (FOMC) announcement focused on the potential change in interest rates. What went largely ignored was that it will continue to purchase $120 billion in bonds every month.   The central bank said it “might” raise rates in 2023, but there was NO hesitation to continue full steam ahead with its aggressive bond-buying program.   This QE program amounts to $1.44 TRILLION annually in new bank reserves (which are used to purchase Treasuries). And it’s all created out of thin air. To put that amount into perspective, the market capitalization of IBM is $130 billion. So the Fed creates the currency equivalent of another IBM nearly every month.   That’s a lot of currency. If you live to 95 you will have been alive for three billion seconds. The Fed is creating 40 times more digital dollars than that each and every month.   It takes only a rudimentary understanding of economics to know that the more you create of something, the less valuable it becomes. This is why fiat currency is ultimately a faulty system; politicians and central bankers can’t resist the temptation to solve their problems by printing more currency… which creates more debt… which weighs down the economy… which they respond to by creating more currency… and around we go. • The current monetary system, as we’re witnessing right now, is a literal fiat free-for-all. Let’s contrast that to real money… Currency Creation vs. Gold & Silver Production How does the Fed’s $120 billion/month compare to the value of gold and silver production? We ask this because gold and silver can’t be created out of thin air, and are limited in supply. This is one reason gold or bimetallic standards have been used in the past: they impose discipline, because a country can’t spend more than the gold and/or silver it produces.   The gold mining industry produced 97.5 million ounces globally last year. On a monthly basis that’s 8.125 million ounces. Gold’s average price so far this year is about $1,800, so the monthly value of production is $14.2 billion.   Silver mining output last year was 729.7 million ounces, or 60.8 million ounces per month. At $26 silver the monthly value is $1.58 billion.   Here’s how those amounts contrast with the Fed’s current QE program. Currency Creation vs Gold & Silver Production The US central bank is creating over eight times more currency than what the entire world produces in gold. And nearly 76 times more currency than silver.   And this isn’t even an applies-to-apples comparison: it excludes QE efforts from other central banks around the world. If we added in their amounts—or just compared US printing to US gold production—the values for gold and silver wouldn’t be visible on the chart. It also doesn’t include fractional reserve lending, which creates even more currency!   Some of you may point out that 2020 mine production was an anomaly due the pandemic. It did decline—but gold production was already in a downtrend. Mine capacity—how much new production is scheduled to come online each year—is just 744,000 ounces for 2021, the lowest level since 2011. And almost every report I read says this trend will continue for at least the next several years.     Ditto silver. New mine supply has been in a declining trend since 2016, and is now at the lowest level since 2012. How Valuable is Something You Create With a Keystroke? We also have to consider the time and effort it takes to produce gold and silver.   The Fed and most central bankers today create new currency with a computer and mouse—point, click, voila! But producing real money takes a full decade—from exploration and discovery to development, production and distribution. Time to create currency vs gold & silver bullion Most currency today is basically “imagined” by a central bank, with the new digits credited to banks and other entities. Easy peasy.   But how valuable is something that can be created in literally seconds, with little effort? This is one reason a gold standard can work; it takes real work and lots of time to bring gold to the market, which limits the amount of spending politicians can do (which is why they’ll fight it if it’s ever introduced again).   But here’s the kicker to all this… Are you prepared to profit from – what could end up being – the BIGGEST gold rally of our lives? Gold in Vault Today’s Paycheck Will Never Buy You More Than Right Now It’s a sobering thought to realize this fact: • The dollar you earned today will never buy you more than it will right now. The cash from your next paycheck will only lose more and more purchasing power as you move forward in life.   Here’s how much buying power the dollar you earned in 2000 has lost. US Dollar Purchasing Power 2000 vs Today Your paycheck from 2000 will now only buy you 63¢ worth of goods and services.   Gold and silver, on the other hand, are long-term stores of value. They maintain purchasing power—and over the past 21+ years have increased one’s buying power. Gold Purchasing Power 2000 vs Today After adjusting for inflation, the ounce of gold that sold for $281.5 in 2000 will now buy you over $1,100 worth of goods and services. That’s nearly a three times increase in buying power.   Silver has improved one’s buying power as well, despite not having risen as much as gold during this period. Silver Purchasing Power 2000 vs Today After adjusting for inflation, silver’s purchasing power has grown 209% over the past 21 years. While the dollar has robbed 37% of your buying power.   Given that silver has historically always outperformed gold in bull markets, it would be entirely unsurprising if its purchasing power exceeded that of gold’s over the next few years. • If your savings is denominated in cash, you have a serious long-term leak in your boat. But if your savings is denominated in real money, gold and silver, you not only preserve your buying power but grow it. Don’t put your faith in the fiat free-for-all. Instead put your financial future in the hands of real money.   Keep accumulating, my friends, because the trend shown by these charts is only going to pick up steam.   Which means our buying power will go through the roof over the coming years. Regards, Jeff Clark, Senior Analyst, Hard Assets Alliance  For more postings by Hard Asset Alliance, click HERE Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 2 Views 0 likes 0 comments
Read more
by on June 24, 2021
There aren’t many investments today where you can find deep value.   But here’s one. Not only does it offer strong value, but it also tells us what assets to favor—and which to minimize—over the next few years. Gold’s current ratio to the broad stock market has a clear message to investors: it is highly likely that sooner or later, gold will strengthen and stocks will weaken. Here’s what the data and history show… Gold STILL Cheap Relative to Stocks Gold rose 19% in 2019, and 24% in 2020. Yet those consecutive annual gains did little to improve its ratio to the broad stock market. Relative to the S&P 500, gold remains deeply undervalued. The ratio is back to where it was in 2006.   You can see the peaks this ratio has hit before. To reach some of those prior highs it would have to rise… • Nearly 3 times to match the 2011 high • Over 4 times to reach the 1987 peak • Almost 6 times to match the 1974 high • And over 17 times to reclaim the 1980 peak! Since it’s a ratio one asset could move more than the other, but the more likely scenario is that gold rises and stocks fall. And probably dramatically.   Why would this ratio reverse? Are you prepared to profit from – what could end up being – the BIGGEST gold rally of our lives?   By almost any measure the stock market is overvalued, and history shows that gold tends to rise in bear markets for stocks.   But the big reason is because there’s been virtually no fallout from the gross financial negligence on the part of central bankers and politicians. When that process gets underway and picks up steam, investors are likely to flee stocks and pursue gold as the fear and turmoil spread. What might a reversal in this ratio look like? Let’s take a look at where gold and the S&P could be headed if we returned to some of the ratios above… Thrills for Gold, Chills for Stocks The following tables show what would happen to the prices of gold and the S&P 500 if three ratios above were to hit from current levels. To keep it simple, the tables are calculated from 4,200 for the S&P and $1,750 for gold.   First, if the ratio returned to its 2011 high of 1.67, here are the various prices gold and the S&P 500 could see. In most scenarios where gold logs a gain, the S&P 500 would experience significant losses. Only at a five-figure gold price would the S&P see a gain at this ratio.   Even if gold fell to $1,000 the S&P would lose almost over 85% of its value. While this scenario is pretty sobering, it only gets worse for stock investors… Here’s what gold and S&P prices would look like if the ratio matched its December 1974 high of 2.93.   At no gold price in the table do stocks see a gain.   The difference between the two asset classes couldn’t be more stark. Clearly gold will win and stocks will lose in the ratio scenario. And consider this: how many investors would sell at least some of their stocks and shift to gold? Throw in the fact that history demonstrates the average investor crowds in near the end and a return to this ratio is not farfetched. And here’s the biggie, a rematch of the early 1980 ratio of 7.58.   This would be an ugly outcome for any diehard stock investor. Even if gold soars to $10,000, stock investors would see their portfolio lose over two-thirds of its value.   Remember, these are not pretend prices, model projections, or wishful thinking on my part. All these ratios have occurred before. And given where the ratio currently sits, the odds of it moving significantly higher are indeed very high. • When the gold/S&P 500 ratio reverses, stock losses will mount and gold’s gains will grow. Based on history the moves will probably be substantial for both sets of investors. For investors that have no exposure to gold, you have to consider what would happen to your stock portfolio when (not if) this ratio begins to reverse.   I hope you’re not one of those that end up selling your losing stock positions near the bottom and buying gold near its top. Do that and you’ll end up a victim of the wealth transfer—and indirectly help me and my gold friends become richer. Instead, given that stocks don’t stay in bull markets forever, and that gold is deeply undervalued relative to stocks and is highly likely to rise when they reverse, might it be wise to allocate a portion of your portfolio to gold now? I encourage you to buy some gold now. At the current ratio, not only is your risk very low but you gain the hedge gold is historically famous for providing. And if you don’t buy gold now? Well, a wealth transfer is likely coming, and you’ll either be a victim or victor. Given where this ratio sits, gold investors are destined to be the victors. By Jeff Clark, Senior Analyst, Hard Assets Alliance  For more postings by Hard Asset Alliance, click HERE Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 0 Views 0 likes 0 comments
Read more
by on June 7, 2021
If you’ve ever wondered why you can’t get a straight answer from the Federal Reserve, you’re not alone. And you’re not imagining it.   Beginning with Paul Volcker in the early 1980s and continuing with Alan Greenspan in the 1990s and early 2000s, Fed officials developed a new language called “Fedspeak.”   Fed governors and chairmen frequently have to testify before Congress, give speeches or do media interviews. They know they have to say something that seems to have substance and is technically correct.   On the other hand, they often don’t want to disclose what they actually intend or what they see behind the scenes. Either that or they really don’t know what they’re doing and can’t let people know that.   The way to reconcile these public appearances with as little transparency as possible is to use Fedspeak.   Fedspeak consists of an artful blend of platitudes and jargon that intends to sound intelligent but actually says nothing.   Fedspeak is both confused and confusing. And that’s the point.   Paul Volcker used to practice Fedspeak behind a cloud of smoke from his huge cigar, back when you could smoke indoors. Alan Greenspan later captured the essence of Fedspeak when he testified to Congress, “If I seem unduly clear to you, you must have misunderstood what I said.”   Another bit of candor was when Greenspan said, “We really can’t forecast all that well, and yet we pretend that we can, but we really can’t.” (It’s a mystery to me why many people actually place credence in their forecasts).   Fedspeak may have been invented by Volcker and Greenspan, but it’s alive and well today. The latest example comes from Fed Vice Chairman Randy Quarles while testifying before Congress on the possibility of inflation due to Fed policies of zero rates and huge asset purchases.   Quarles first says, “I don’t want to overstate my concern” about inflation, and adds that he does not expect a breakout. He then pivots and says, “If my expectations about…inflation…are borne out…and especially if they come in strong…it will become important…to begin discussing our plans to adjust the pace of asset purchases.”   In other words, we may be getting close to a new “taper” and a possible taper tantrum. So, which is it? Inflation or no inflation? Quarles says both and, therefore, really says nothing of substance.   A perfect example of Fedspeak.   What is clear is that the Fed has become a serial bubble machine that has dangerously distorted the entire financial system through constant intervention, which greatly increased during the pandemic.   Right now, it has created not one, not two, but three simultaneous bubbles. What are they? And how much longer can they last before imploding? Read on. The Fed’s Inflated Three Simultaneous Bubbles I don’t hold many mainstream economists in high regard. They mostly cling to obsolete or defective models (such as random walk, efficient markets hypothesis, Phillips Curve, wealth effect, and many more). They are also impervious to contrary data, alternative models, and common sense.   But, one of the few mainstream economists whose work I follow closely is Robert Shiller, winner of the Nobel Prize in Economics in 2013.   Shiller is a true pragmatist. He develops models that reflect reality rather than creating abstract models and forcing data to fit some preconceived and erroneous curve. He has also developed metrics such as the Case-Shiller home price index and the CAPE Ratio to track price movements and potential bubbles in key asset classes.   And right now, Shiller is issuing one of his most dramatic warnings ever...   Shiller is warning that stocks, housing and cryptos may all be in extreme bubbles at the same time.   Shiller uses data series that go back over 100 years in some cases, so he has a deep perspective on business cycles and prior bubbles on which to base his forecast. Savvy investors are well-advised to follow Shiller and be alert to his warnings.   There’s no doubt that U.S. stock markets are in bubble territory.   One of the best metrics in terms of predictive analytic power is the Shiller Cyclically Adjusted Price Earnings Ratio, known as the CAPE Ratio.   The CAPE Ratio uses a price-to-earnings ratio (PE ratio) similar to many other PE ratios in use. The main difference is that the CAPE Ratio uses earnings per share (EPS) averaged over ten years and adjusted for inflation.   These adjustments smooth out earnings through an entire business cycle (with a ten-year average) and present real earnings (with the inflation adjustment).   The all-time high CAPE Ratio was 44.19 in December 1999 at the peak of the dot-com bubble. The ratio was 30.0 immediately prior to the historic stock market crash of October 1929.   Today the ratio is about 37.0, the second-highest in history; higher than it was before the crash that started the Great Depression.   This does not mean the market crashes tomorrow. The CAPE Ratio could go higher. However, it does mean the market is in bubble territory, and no one should be surprised if it does crash.   Another widely used metric, more popular than the CAPE Ratio, is the S&P 500 PE Ratio. This ratio is currently around 44.0.   That’s higher than the rallies in the Roaring Twenties, the dot-com bubble, and the rally that preceded the 2007 subprime mortgage crisis.   Numerous other measures could be used, but they all show similar results. Stocks are at or near all-time highs compared to earnings. That’s indicative of a stock bubble by any definition.   The Bitcoin bubble is an even greater bubble than the stock market. The 630% ramp from $8,900 per coin on May 25, 2020, to $64,830 per coin on April 15, 2021, is one of the most spectacular asset bubbles in history.   If one goes back slightly further to the $210 per coin price on January 20, 2015, the percentage gain is 31,000%. That gain puts the Bitcoin bubble ahead of tulipomania, Beanie Babies, the South Sea Bubble and all of the other investment manias in history.   Bitcoin has struggled lately and trades at around $36,000 today. It’s too soon to say the Bitcoin mania is over, but the fact remains; we’ve been witnessing bubble dynamics in real time.   What about housing?   In real terms (again, adjusted for inflation), Schiller says that housing prices have never been as high as they are today. He uses data going back over 100 years, so that’s pretty remarkable.   One thing bubbles have in common is that they are driven by their own narrative. What are the narratives that propel today’s bubbles?   One narrative goes by the name TINA, which stands for There is No Alternative. U.S. bond yields are near all-time lows, so bonds are not attractive compared to stocks even at sky-high stock prices. European stocks have been hammered by back-to-back recessions since the pandemic began.   Gold has mostly moved sideways lately in the absence of inflation. (Inflation expectations have been high, but inflation has not).   Commercial real estate is in distress because of the work-from-home trend and the exodus of talent from major cities due to COVID, crime and riots.   In short, bonds, gold, foreign stocks and commercial real estate are all unattractive, so investors buy U.S. stocks, Bitcoin and residential real estate because there are no attractive alternatives.   Another narrative has the name FOMO. This stands for Fear of Missing Out. This narrative says stocks, cryptos and residential real estate may be high, but they’re going higher, and if you stand on the sidelines, you’ll miss out on further gains.   The third major narrative for the stock market, in particular, is the idea that “You can’t beat the market.” This idea emerged from academia in the 1960s under the names random walk and the efficient markets hypothesis.   The random walk hypothesis says that stock prices are inherently unpredictable and whether markets will be higher or lower in the near future is essentially equivalent to a coin toss. The efficient markets hypothesis says that markets continuously incorporate new information and move smoothly to new levels (higher or lower) based on that information.   Both the random walk thesis and the efficient markets hypothesis are nonsense and are not supported by empirical evidence. The evidence shows that the time series of stock prices are not random. They move in path-dependent trends with momentum and can be predicted in the intermediate-term with high accuracy.   Markets are not efficient at all. They tend toward bubbles, extreme dips and continually overshoot or undershoot in reaction to the news. Market prices do not move smoothly from one level to another. They gap up or down in huge spikes or dips that leave investors unable to get out of a position before the new level is set.   And you can beat the market with legal inside information that you develop yourself through proprietary models, expert analysis, or superior information gathering techniques, ranging from polling to satellite imagery.   But narratives have their own dynamic and do not rely on truth. Some narratives are true, some are not, but it doesn’t matter. They can exert power on markets either way.   If you think that stocks, cryptos and housing are unrelated markets, you may be in for a nasty surprise. These markets seem unlinked when times are good, but severe problems in one market tend to spill over into other markets quickly.   Investors suffering huge losses in cryptos will sell stocks to raise cash. Investors suffering huge losses in stocks may put off buying a new house or even sell their existing home to deleverage. Crashes in one market quickly lead to crashes in other markets because of leverage, liquidity preferences and simple panic.   In a market meltdown, you don’t sell what you want; you sell what you can, which often means dumping assets in one market to make up for losses in another. That’s how uncorrelated markets become conditionally correlated in a meltdown.   Again, Shiller is not saying markets will crash tomorrow. Bubbles can go much higher and last much longer than most expect. It’s a bad idea to short bubbles because they may continue far beyond the point at which common sense says they should collapse.   Schiller’s only saying they’re exhibiting the kind of melt-up behavior that often precedes a crash, as happened with dot-com stocks in 1999 and the housing market in 2006.   There may be further gains ahead, but we’re closer to the end than the beginning. Based on Shiller’s advice, it may be time to lighten up on exposure to all three asset classes, even if you don’t get out completely.   Be sure to have plenty of cash in reserve. I also recommend you have 10% of your investable assets in gold.   Markets may not crash tomorrow. But no one should be surprised if they do. Don’t be caught in the stampede once it happens because you’re probably going to get crushed. Regards,   Jim Rickards   Jim Rickards is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He was the principal negotiator of the rescue of Long-Term Capital. For more postings by Hard Asset Alliance, click HERE Hard Asset Alliance is also listed in the DIY Marketplace Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance.
0 rating 1 view 0 likes 0 comments
Read more
by on April 26, 2021
Looking at the silver market over the past 50 years reveals some very clear tendencies. Tendencies so strong, in fact, that we can reasonably predict what’s ahead for the price.     Here are five realities about silver that, based on history, point to what’s coming for one of our favorite monetary metals… Reality #1: Corrections Are Normal—and Our Friend Most silver investors know the price is volatile—it’s a tiny market so a small amount of capital can have a big impact on the price.     That volatility includes corrections, of course. And putting them to a chart shows that even during bull markets, corrections abound.      This chart logs every correction of 5% or greater since January 2020. There have been 16 corrections of 5% or more over the past 16 months. And yet look at the gain during this period: 69%.     Even during silver’s biggest run—1979 to January 1980—look how many corrections there were. In the final 13 months of the 1979/80 mania, there were 13 corrections of 6.5% or greater. Like the last 16 month period, that’s an average of one per month. • Corrections are normal. In bull markets they are buying opportunities. In fact, this volatility is why we’ll earn more on silver than gold… Reality #2: Silver Has Always Outperformed Gold in Bull Markets Silver’s greater volatility means it has historically outperformed gold in bull markets.     Here are the five major bull markets in gold and silver, including the current one (from each metal’s low last March, through April 21). It’s something many silver investors know, but it’s worth highlighting to those who might be frustrated at the ongoing lag in price: • Before the bull market is over, history says silver is set to gain more than gold. Reality #3: Prices Spike Suddenly and Violently With little warning, history shows the silver price can ignite and surge like a rocket.     Those spikes usually aren’t small, though they are typically short-lived. Here’s every silver spike since the mid-1970s—notice how big they have been but also how short they lasted. If we average out all those spikes this is what we find: On average, when silver spikes, the price rises 150% over a 7-month period.     There’s an important point about how suddenly these spikes occur: you must be invested before they kick in. You might have to wait for it to ignite, but silver’s history over the past 50 years provides a very clear message: • Another spike in the silver price is coming.   5 Reasons to Purchase Gold and Silver at The Hard Assets Alliance. • Store your precious metals in ultra-secure non-bank vaulting locations throughout the world • Buy precious metals right from the comfort of your own home with a few clicks of the mouse. • Sell your precious metals to bullion dealers who will bid against each other to buy from you when you want to sell. • You get full replacement insurance on all precious metals you store with Hard Assets Alliance. • Competitive, transparent pricing Your Hard Assets Alliance account is FREE to setup… if you already have one, then click here to login and buy some precious metals now.     Reality #4: Current Bull Market is Just Getting Started Some investors lament that the price has been stagnant and weak since its peak last August. But this behavior is actually historically normal—and does not mean it won’t explode again in the near future…     Here is silver’s biggest bull market, from 1976 to January 1980, along with our current one (from the low in March 2020). Notice how dormant the silver price was for the first three years of that bull market too, before the mania kicked in…   The silver price gained over 1,200% in that bull market, most of which occurred in the final year. Our current bull market so far is exhibiting similar behavior. • If our current monetary system falters like it has many times throughout history, then we are likely to see similar gains over the next few years, if not greater. Reality #5: It’s Not Just About Price  As a thought exercise, what if I told you the silver price was going to peak at $85 an ounce? Too low, right? But what if I told you that at $85 you could buy a house with just three mints cases of silver Eagles (or Maples Leafs, etc.)?     That’s exactly what silver investors were able to do in January 1980. At the peak of the market, silver investors could buy an average-priced home in the US with just 1,464 ounces.     Since silver is money, it’s what you can buy with it that separates this hard asset from most other investments.      There’s another advantage: when ratios like this one reach historic lows—regardless of what the silver price may be at the time—it may be time to consider exiting.     No, I don’t think this ratio bottoms at $85 silver. There’s far too much currency abuse for it to peak at that level. But instead of focusing on the price… • Look at what silver can buy you to determine its value, and potentially when to exit. These five realities from history are important for investors to understand. Silver… • Has numerous corrections, even in bull markets   • Always outperforms gold   • Spikes suddenly and violently   • Is gearing up for the next big spike   • Will someday buy us a house with a modest number of ounces. Given the nature of silver’s DNA, the message to us investors is very clear: • Prepare now for the next big run. That’s precisely what I’m doing. And here’s an easy way to do it. Regards,    Jeff Clark Senior Analyst HardAssetsAlliance.com       We hope you have enjoyed this article by our guest writer. If you agree that now is a good time to own precious metals, log in to your Hard Assets Alliance account, check your exposure, and consider adding to your physical metal positions today. Log in to Buy Gold and Silver Don't have an account?   Signing up is easy. It only takes 5 minutes to set up and start precious metals investing on our secure platform that gives you competitive pricing, fully allocated ownership, with optional secure international storage or delivery and full transparency and safety.  Open Hard Assets Alliance Account Today   For more postings by Hard Asset Alliance, click here Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance for purchases make through these links.
0 rating 0 Views 0 likes 0 comments
Read more
by on March 12, 2021
 Just a reminder, “Tax Day” is April 15th.   Now, is a good time to take a look at your returns, even if you’ve filed already. Start by checking line 19 on your Schedule 1: That’s the IRA deduction.   For many investors, an IRA deduction can bump them down to a lower tax bracket. If yours isn’t maxed out… a Hard Assets Alliance IRA is a quick and easy solution to help you cut your tax bill. It works just like a regular stock or bond IRA except you can invest in real, physical gold and silver and enjoy the very same tax advantages… including making a contribution and taking a deduction on your tax return. At this point in history, it may make sense to invest a portion of your retirement savings in pure bullion – a physical asset with a long track record of preserving wealth. But to maximize your savings… You must make a contribution and have it clear by Thursday, April 15 to take advantage of this deduction on your 2020 taxes. (After that, any IRA contribution counts towards the next year.) And because the IRS limits how much you can put in an IRA each filing year, that could be a big missed opportunity for you. Already filed your taxes? Consider this a “second chance” to maximize your savings. You can still make a traditional contribution to a Hard Assets Alliance IRA and file an amended return later. But you have to hit the deadline… funds must be deposited and cleared by April 15 in order to be reported for the 2020 tax year. That may sound like a long time away, but moving funds and opening up accounts can take time. So take the first step and open a Hard Assets Alliance IRA to save on your tax bill now and in the future. If you have any questions? Call us at 1-877-727-7387. Keep in mind, we cannot provide individual tax advice but can walk you through the process of opening a precious metals IRA. Open a Hard Assets Alliance IRA – and make a deposit by April 15 Do you already have a Hard Assets Alliance IRA?   That’s great -- you’ve taken a critical step to diversifying your retirement savings. Now is a good time to log in, check your holdings, and make sure you’re happy with your contribution amounts for 2020. There’s still time to make the most of your precious metals IRA. P.S. Do you already have an IRA or 401k at a different institution or brokerage? All you have to do is open a Hard Assets Alliance IRA and then you can transfer whatever you amount you like from an existing IRA at Vanguard, Fidelity, etc. or rollover funds from an employer-sponsored 401k plan. Our custodian will help you every step of the way and works with all IRA custodians. Transfer or rollover today. P.P.S. Roth precious metals IRAs are also available. A Roth IRA account lets you put in money today that you can withdraw tax-free tomorrow (in retirement). If that’s an option that makes sense for your tax situation you can transfer, rollover, or open a Roth precious metals at the Hard Assets Alliance today. Note: This is NOT tax advice. Content in this blog regarding taxes is for informational purposes only. Hard Assets Alliance cannot answer individual tax questions; we recommend that you contact a tax professional. For more postings by Hard Asset Alliance, click here Website:  https://www.hardassetsalliance.com/?aff=TWC WealthCare Connect may receive a referral fee from Hard Asset Alliance for purchases make through these links.
0 rating 0 Views 0 likes 0 comments
Read more