The Morality of Capitalism -Craig Smith
Gold last traded at $1,347 an ounce. Silver at $16.17 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on momentum buying and dollar weakness. U.S. stocks traded mostly flat as investors awaited the release of a summary from the Federal Reserve's meeting in January.
Only A Matter Of Time Before Gold Beats The U.S. Dollar -Analysts/Kitco
"Commodity analysts have noted that gold's recent bullish moves are impressive, as they have been made in the face of continued U.S. dollar strength...Gold has managed to hold above the critical psychological level at $1,300 an ounce. April gold futures last traded at $1,323.90 an ounce, slightly up from last Friday's settlement price....While it's not uncommon for the U.S. dollar and gold to rally together, the trend has never proven sustainable. Looking ahead, many analysts think that gold will eventually beat the U.S. dollar. Eugene Weinberg, head of commodity research at Commerzbank, said that he sees growing headwinds for the U.S. dollar, which will continue to benefit gold. 'There are a number of factors weighing on the U.S. dollar: growing recession fears, weaker manufacturing data and a Federal Reserve that will not be raising interest rates anytime soon,' he said....Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that he also sees the recent rally in equity markets supporting the U.S. dollar, but this will only prove to be a limited catalyst. 'The dollar is on thinner ice, in our view, with its primary remaining support factor - the outperforming stock market - running into layers of resistance,' he said in a report Friday."
Reflections On Capitalism And The Morality Of It with Craig R. Smith -The Wealth Standard
"Capitalism seems to have more bad than good reputation among people. Breaking down some reasons why it is misrepresented is Chairman of Swiss America Trading Corporation, Craig R. Smith. He gives his thoughts about capitalism and the relevance of money in a laissez-faire capitalist society. He talks about China, the government, and what they have been doing to the markets. Helping those who are still grappling with the monetary system, Craig defines sound money and why it is important. He also reflects about humanity, equality, and where we are headed in the next ten years with our current situation. Ultimately, amidst everything going on in politics, he reminds us how we, the people, are the government."
Is the Fed Insolvent? -New York Sun
"Is the United States Federal Reserve, central bank to the greatest economy in the history of the world, insolvent? Technically it is, writes James Grant in the latest number of his famed newsletter, Grant's Interest Rate Observer....Mr. Grant, who holds an honorary doctorate in acerbic studies, has pressed this point in an open letter to Wm. C. Dudley, who was until recently the president of the New York Federal Reserve Bank. Mr. Grant was moved to write by an op-ed that Mr. Dudley wrote and that appears on Bloomberg under the headline 'Let's Stop Worrying About the Fed's Balance Sheet.'....The reason we're not supposed to worry about it, after all, is because we live in the age of fiat money. Or irredeemable electronic paper ticket legal tender...Such scrip enables the central bank to print endless amounts of money to cover its largesse. The scale of this was described in an article by Alex Pollock in American Banker. Mr. Grant cites the piece, which notes that in December the Fed disclosed that it had, as Mr. Pollock put it, '$66 billion in unrealized losses on its portfolio of long-term mortgage securities and bonds (its quantitative easing, or QE, investments), as of the end of September.' That amounts, Mr. Pollock notes, to '170% of the Fed's capital' and means 'on a mark-to-market basis' that 'the Fed had a net worth of negative $27 billion.' If long-term interest rates rise by 1%, Mr. Pollock estimates, 'the Fed's mark-to-market loss would grow by $200 billion more.'....Mr. Grant...ends his piece with an expression of admiration for the classical gold standard. He quotes a study from the Fed itself that, in 1959, suggested that under the gold standard, as Mr. Grant summarized, 'a currency derived its strength from the integrity of the balance sheet of the central bank that issued it.'"
Government debt, a real crisis -Rahn/Washington Times
"There is a real crisis that is much more likely to adversely affect most people's lives much sooner and with greater consequences than climate change, and that is the rise in government debt as a percentage of GDP in many of the major countries. For an individual or private business that has a debt burden and an interest payment burden growing faster than net income, eventually, there will be a day of reckoning. This will necessitate a cut of expenditures until their spending - after payment for interest and principal on their debt - is no greater than income. There is also a day of reckoning for governments that take on too much debt. At some point, interest payments take a higher and higher percentage of government outlays....In 2015, interest payments on the debt amounted to 6 percent of U.S. federal government spending. This year they will be 8.5 percent, and in four years (2023) they are projected to rise to 12 percent. As bad as the situation is in the United States, it is much worse in Japan, Italy and France....Both political parties in the United States are in denial. Some Democrats have proposed trillions of dollars in new spending - for free medical care, education, a guaranteed income, etc., etc. - moving the day of reckoning closer....The real crisis is the failure of too many in the global political class and their media enablers to admit to the public that they are spending addicts, and their refusal to go into fiscal rehab."
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Latest Feature Commentary
2019: What Could Go Wrong?
By Craig R. Smith
- If you thought the U.S. stock market correction of 5% to 9% in October was bad, 'you ain't seen nothing yet'; according to a growing choir of leading economic voices. Five trillion dollars was erased globally from stocks and bonds in just one week during the October market sell-off. "October's Market Rout Leaves Investors With No Place to Hide," reported The Wall Street Journal.