Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today’s focus is on Rhodium (See the Precious Metals section.)
Precious Metals (Rhodium):
I see that the spot price Rhodium just touched $3,000 per Troy ounce late last week. You may recall that I issued a buy recommendation for Rhodium back in 2016, when it was languishing around $670 per ounce. I hope that some of you readers took my advice. If you did, then you’re now sitting pretty. The future for Rhodium’s price is uncertain. But I’ll reiterate one key point: Most of the world’s Rhodium comes from just two places: Russia and South Africa. Watch geopolitical, military, and economic events closely. And, as always: Buy low and sell high.
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Michael Pento interviewed by Mike Gleason: Coming QE And Low Rates Will Be ‘Rocket Fuel for Gold’. Here is a key quote:
“So, here’s where what’s going on and we are at a record high position for gold in the inflation-deflation and economic cycle model that I run here at Pento Port. So, why is that, okay? Why is that the case? So we were a 5% goal when it was crashing in 2016 and 17 but we are now at 22% gold and gold related investments. So, why is that the case? Because nominal interest rates, there’s been a proclamation from central bankers that nominal interest rates can never go above zero. You look at the negative rates now in Japan, the German boom has a yield going out 10 years now of 0.7%. So, interest rates can never be allowed to rise. If you look at our 10-year note is now, at least in the terms of yields, is in a bear market. So, a bull market and bond prices in a bear market in that yield.
And when you come to the realization that nominal rates can never really get much above zero, that’s a rocket fuel for gold. Because gold loves are interest rates that are close to zero and falling because it doesn’t produce any income, it “just” preserves your purchasing power. I say just in quotations, “just” is pretty important. Now because its central banks are also going to have to resort to a return to Quantitative Easing. I believe that the ECB is moving in that direction. They also extended the TLTLRO, which is a Targeted Long-Term Refinancing Operation. Basically just to spell it out for your audience, it’s basically when the central bank makes loans to commercial banks and commercial banks don’t have to pay back the central bank, if they make that loan to the private sector.”
Economy:
At ABC (Australia): How central bankers blew up the global economy
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Charles Hugh Smith: How States/Empires Collapse in Four Easy Steps. And here is a brief extract:
“This political expediency works most wonderfully for a time: people don’t realize the silver content of their coinage is being cut to near-zero, or there’s nothing holding up the value of their currency but trickery and vague allusions to past glory.
Trust in the state/empire’s currency suddenly collapses in a phase shift: all seems well until the moment the avalanche sweeps it all away.
It’s a simple progression: during the permanent-growth-is-our-birthright phase of self-reinforcing virtuous cycles, when everything is expanding rapidly–credit, resources, jobs, capital, profits, state tax revenues, etc.–promises are made to elites and constituencies that look easy to meet as the economy is projected to expand rapidly essentially forever.
But virtuous cycles decay to unvirtuous cycles of bureaucratic sclerosis and corruption, systemic friction, declining productivity and resource depletion, and the rise of parasitic elites who contribute nothing but skim plenty saps the surplus available for productive reinvestment.”
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And there is this from Michael Snyder: As The Economy Teeters On The Brink Of A Recession, U.S. Debt Levels Are Absolutely Exploding
Commodities:
The Oil Majors Aiming To Save Alaska’s LNG Dreams
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I see that the May Copper Comex contract is up to $2.90. Though copper has mostly been trading fairly flat, the general long-term trend appears to be upward. It is up substantially from its $2.25 price of three years ago. Of course any major recession will kick the slats out from under the prices all of the industrial metals. Consider yourself warned. Can you smell the recession coming?
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Oil Markets See An Explosion Of Bullish News
Forex & Cryptos:
Consequences Of Lost Global Reserve Status
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Mt. Gox Mark Karpeles May Avoid Jail Time but Class Action Lawsuits Remain
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Dr. Doom Buys First BTC, Is Warren Buffett next?
Banks and Bank Stocks:
At Wolf Street: US Banks Report $251 billion of “Unrealized Losses” on Securities Investments in 2018, the Most Since 2008: FDIC
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The next crash: why the world is unprepared for the economic dangers ahead.
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News Tips:
Please send your economics and investing news tips to JWR. (Either via e-mail of via our Contact form.) These are often especially relevant, because they come from folks who particularly watch individual markets. And due to their diligence and focus, we benefit from fresh “on target” investing news. We often get the scoop on economic and investing news that is probably ignored (or reported late) by mainstream American news outlets. Thanks!