GOLD'S BEST FRIEND REFUSES TO LET GOLD SELL OFF

May June is when gold normally sells off seasonally.  It tried for a day or two,  Then Gold's Best Friend on successive days launched a new vicious round of his Trade War on China, and lashed out at his enemies "on the left" who are "stoking riots across America", vowing to unleash "Vicious Dogs and Ominous Weapons."

Never missing on opportunity to fan the flames of hatred and discord, while steadfastly refusing to do any actual work of preparing for eminent disaster such as pandemic, or laying the groundwork for healing in the wake of tragedy he is making the Yellow Metal into the most valuable commodity anyone can own. 

His government is a shell, having fired everyone who is not a yes man, filling crucial posts with donors, lackeys and half witted family members, it will take years to reassemble a working government even if he loses the next election.

And the damage from the mishandled covid crisis coupled with a response that shovels trillions in the pockets of the wealthiest Americans while leaving the working middle class to fend for itself as the unemployment rolls top 40 million will also not be reparable for many years.

So load up on gold, while you can.  Because the yellow metal has never had a better friend than Ttump, and there's plenty of time for him to do much more damage before November.

Gold Seasonals generally work: Get Ready!

We are entering the slow period for gold.  The next few weeks tend to be selloff time. 

The reason is that for both China and India - about 1/2 of the world's population, and a gold-hoarding half at that, jun and july are absent of any festivals and are at the low point for marriages.  This drops the physical demand and the investment demand follows.  For reasons I can't fathom there is often a blip upward in early july, but on the whole this is a period where the large investment (read: gambling) houses can engineer big paper takedowns of the gold price.   This is when you often see a couple of back to back down $40 to $50 dollars days,

A great time to take advantage of an artificially low gold price!

V - U ---------------------?

Joseph Brusuelas: Mass Unemployment Continues to Rise

Why You Should Read: The latest weekly jobless claims report brought the total number of job losses up to 38.9 million in just nine weeks, with millions more coming. RSM Chief Economist Joseph Brusuelas describes what policymakers should be doing about it. He also has a great weekly claims chart.

Key Points:

• The number of newly unemployed Americans is roughly equal to the entire population of California losing their jobs.

• Continuing claims for the week ending May 9, which will be the measurement period for the May unemployment rate, rose to 25 million.

• This data implies 26% of all those employed in February have lost their jobs since then.

• Including marginally attached and involuntary part-time workers, the real-time unemployment rate is approximately 29.4%.

• With little hiring activity, there is every reason to think total unemployment will reach 50 million in the next few months.

Bottom Line: Brusuelas would like to see political authorities find ways to bridge the gap between today and the point at which workers can return to work safely. A coronavirus testing, tracing and treatment regime that reduces public fear would help, but he is not holding his breath.

GOLD'S BET FRIEND FEVERISHLY SUPPORTING GOLD PRICES

President Donald Trump, Gold's Best Friend, is furiously trying to boost the price of gold.  To this end, in the middle of a depression, he is:

A) Starting to new trade war with China! 

B) Pledging to screw California and New York because they are blue states, by refusing them any bailout money - forgetting that California and New York account for a full %25 of US GDP!

C) Promoting anti-vaccine conspiracy theories which undermine any chance of getting the country behind a vaccine once one is developed!

D) Refusing to get involved in a government funded PPE supply that would enable small businesses to reopen sooner!

E) Blithely announcing idiotic "Hunches" on a daily basis that make it sound like nobody's home at the top of the US Government.

Got Gold?

BROKEN ECONOMY: CONSUMER SPENDING THAT FUELED THE BOOM IS DEAD

• Government numbers suggest average Americans are savings 13% of their income, but the top earners skew the savings rate sharply upward.

• The lower 80% of income earners save little or nothing, spending almost all their income every month.

• Any loss of income or rise in expenses generates a shortfall for most people.

• The top earners who have capacity to spend have little need to spend more.

• Rising consumer debt levels prove average consumers aren’t saving anything like 13% of their income.

• Lower income makes paying expenses harder and makes it harder to obtain additional credit.

• Rising debt service increasingly restricts spending. 

ALL the Savings confined to the top 20 percent looking for opportunities to either put that savings to work or at least keep it safe from the inevitable erosion of the currency will lead inevitably to higher gold prices.

Chapwood Index: the true inflation index

https://chapwoodindex.com/

Go see this for yourself.  Real inflation has been steady at 10 percent year over year for the last 40 years.  Now it is about to go on steroids.

That means real rates are about negative  10 percent.  Which makes gold about the world's most undervalued asset.

Buit don't take my word for it.  Go see the Chapwood index.

Hedge fund involvement in gold deep and unlikely to unwind soon

Hedge fund involvement in gold deep and unlikely to unwind soon

Financial Times ran a comprehensive report on recent involvement of hedge funds in the gold market citing several prominent names, among them Paul Singer’s Elliot Management. “New York-based Elliott,” says FT, “which manages about $40bn in assets, told its investors last month that gold was ‘one of the most undervalued’ assets available and that its fair value was ‘multiples of its current price’.” Hedge funds have been among the chief supporters of the gold bullion market in recent months. Gold ETFs, the primary beneficiary of that interest, added a strong 298 tonnes to their holdings in the first quarter of the year, according to the World Gold Council. Total ETF holdings now stand at 3,185 tonnes – a new record and the third-largest holding after the United States (8,133.5 tonnes) and Germany (3,373.6 tonnes).

Hedge fund involvement in the gold market is deep, the players are prominent, and their commitments, given the rationales publicly stated, are unlikely to unwind anytime soon. “ALL the smart money,” writes market analyst Fred Hickey at his Twitter feed, “Dalio, Druckenmiller, Tudor Jones, Zell, Gundlach, Singer, Klarman, Einhorn, Mobius (and some who I know are loading up but are doing it quietly) are long gold and understand the simple concept Hugh Hendry explains here. Question is: What are YOU waiting for?” Hickey then reposts famed hedge fund manager Hugh Hendry’s comments: “Today, however, ‘if you fear inflation then you should buy more gold.’ It is simple. The Fed is trying to debase the $ to help the economy. Will it help? Maybe. Will it help the stock market? Probably. Will it help gold? Definitely. This is the final leg that I envisaged in 2002.”

GOLD AND UNCERTAINTY

GOLD IS ABOVE ALL ELSE A MEASURE OF GLOBAL INSTABILITY.  Another word for Instability might be Uncertainty.

The World Uncertainty Index measures how many times the words Uncertain and Uncertainty are mentioned in newspaper articles referencing economic policy in the world's 20 largest economies.

Trump's trade war made the uncertainly index spike to levels only seen after the 9/1/1 crisis.

Not coincidentally this coincided with a spike in the gold price from $1400 to $1700.

This is perhaps the best guage of how badly Trump damaged global economic stability before the pandemic.

Now, with covid 19 the index has spiked to levels well beyond 9/1/1 and well beyond the financial crisis fo 2008,

We are in uncharted territory,  And for now, while Trump and the mainstream economic community pound the table for a return to pre covid economic norms, when it finally dawns on the economic community that this will never happen, watch the Uncertainty index spike to new highs - along with gold.

UNCERTAINTY INDEX POST COVID:



UNCERTAINTY INDEX DURING TRUMPS"S TRADE WAR:

BROKEN ECONOMY - FED FUNDS FUTURES POINT TO NEGATIVE RATES IN THE US

TODAY MAY 5 2020, for the first time in US History Fed Funds futures point to negative rates here in the USA.

Negative Rates means the Bank will charge you to lend them your money.

Negative Rates means anyone trying to save money will be fined, and that money will then be given to Hedge Funds and Private Equity for free to buy up all the real estate you can no longer afford to live in.

That is what had been going on with Negative Real Rates.  But Negative Absolute Rates means the process will be put on steroids, bankrupting the working/saving  classes and enriching the investing/gambling class

Negative Rates mean the economy is irrevocably broken.

Got gold?

THE BROKEN ECONOMY - FED ANNOUNCES IT WILL BUY ETF'S IE STOCKS

(Bloomberg) -- The Federal Reserve is close to standing up two corporate lending programs that could buy up to $750 billion in debt and exchange-traded funds under its emergency coronavirus actions.

The New York Fed announced on its website Monday that it expects to begin purchasing shares of eligible ETFs in early May through its Secondary Market Corporate Credit Facility. Lending through the Fed’s Primary- and secondary-market corporate credit facilities via purchases of corporate bonds will begin soon thereafter, it said. ETFs are included in the secondary facility and the program’s announcement in March had a major impact on that market.

“Additional details on timing will be made available as those dates approach,” the New York Fed said.

The corporate facilities are among nine emergency lending programs announced by the Fed to help shelter the U.S. economy from the pandemic and keep credit flowing. The move was a dramatic escalation of the central bank’s intervention, stepping into the corporate debt markets for the first time since the 1950s and including some sub-investment grade debt in the ETF purchases.

REGARDLESS OF WHAT THEY CONTAIN - ETF'S ARE STOCKS.  THE FED IS BUYING STOCK.  

THE BROAD MARKET WAS DOWN 200 POINTS WHEN THE FED MADE THEIR ANNOUNCEMENT.  THE DOW ENDED UP 50.

THE TALKING HEADS ALL SAID THE MARKET WAS LOOKING OUT TO BETTER DAYS

HOW CAN THERE BE BETTER DAYS WHEN ALL FINANCIAL ASSETS WOULD COLLAPSE WITHOUT BASKSTOPPING BY THE FED?

HOW LONG CAN THE FED BE THE BUYER OF LAST RESORT FOR ALL FINANCIAL INSTRUMENTS WITHOUT CREATING MASSIVE DESTRUCTION OF VALUE OF THE INSTRUMENT THEY MAGICALLY PRODUCE TO BUY THE INSTRUMENTS - NAMELY THE US DOLLAR?

GOT GOLD?

Zero Hedge: The Financial System is Completely Broken

The system is completely broken, it can’t sustain itself without the Fed’s ever more monumental interventions.

These interventions are absolutely necessary or the system collapses under its own broken facade. And this conflict, a Fed poisoning the economy’s growth prospects on the one hand, and its needed presence and actions to keep the broken system afloat on the other, has the economy and society on a mission to circle a perpetual drain.

So how does the Fed poison everything?

Let’s start with the Fed actual process of working towards its stated mission: Full employment and price stability.

How does it do that? Well, for the last 20 years mainly by extremely low interest rates and balance sheet expansion sprinkled with an enormous amount of jawboning. The principle effect: Asset price inflation.

It’s not a side effect, it’s the true mission. The Fed has been managing the economy via asset prices even though Jay Powell again insisted on saying the Fed is not targeting asset prices.

This is a lie. And I can prove it with one chart. Cumulative $NYAD, the flow into stocks versus M1 money supply:

And guess what? They just saved the $NYAD trend again by going vertical on M1 in a fashion never seen before. All this despite $SPX clearly breaking its long term trend. So yes the Fed is targeting asset prices and Powell is lying when he says the Fed isn’t.

Recklessly widening the wealth inequality equation in the process. 

What happens when you have a slow growth recovery for 10 years and all the wealth benefits going disproportionally to the top 1% who own most of the assets that are targeted while real wage growth stagnates? 

For one you have a sizable portion of society that doesn’t have a pot to piss in, behind in bills, struggling to pay rent, little to no savings or retirement, taking on multiple low paying jobs with no benefits while real estate prices keep rising as the wealthy keep squeezing people out of neighborhoods. What? You think it’s a coincidence that people have to commute farther and farther to their jobs because they can’t afford housing in the areas where they work? Check San Francisco and Silicon Valley housing prices and commute stories. It’s a horror story.

And so what happens when we have a crisis such as this? 

Millions needing help immediately, food banks lined up with thousands in line waiting for help and food. A population not able to sustain itself for lack of savings and resources exposing the structural weakness of our broken system. 

TRUMP CONTINUES TO BANG THE WAR DRUM WITH CHINA:

Mike Pompeo: 'enormous evidence' coronavirus came from Chinese lab

• Secretary of state does not provide any evidence to back claim

“I can tell you that there is a significant amount of evidence that this came from that laboratory in Wuhan,” Pompeo said on ABC’s “This Week.” “These are not the first times that we’ve had a world exposed to viruses as a result of failures in a Chinese lab.”

Trump administration draws up plans to punish China over coronavirus outbreak

The Trump administration is formulating a long-term plan to punish China on multiple fronts for the coronavirus pandemic, injecting a rancorous new element into a critical relationship already on a steep downward slide.

The effort matches but goes far beyond an election campaign strategy of blaming Beijing to distract from President Donald Trump's errors in predicting and handling the crisis, which has now killed more than 60,000 Americans.

Multiple sources inside the administration say that there is an appetite to use various tools, including sanctions, canceling US debt obligations and drawing up new trade policies, to make clear to China, and to everyone else, where they feel the responsibility lies.

GOLD"S BEST FRIEND PUTS ANOTHER COFFIN NAIL IN THE GLOBAL ECONOMY

Treasuries Rise After Trump Renews Threat of China Trade War

By 

Anooja Debnath

May 1, 

Anyone laboring under the misconception that our situation can be remedied by the current administration is suffering a serious case of delusion.  Any and Every mis-step possible will be taken.  Failure to increase testing simply because it is an admission that testing hasn't been adequate.  Failure to track the virus because that would be and admission that we have neglected to track the virus.  And failure to administer the critical loans to small business simply because of placing it in the hands of the few morons left in the administration, while gutting the agencies needed to administer such loans.

But above and beyond incompetence is abject stupidity like renewing a global trade war at a time when global trade has already screeched to a devastating halt.  Why?  Because Trump thinks it makes him look tough.  Which is so much more important than helping to restart the global economy.  

Trade Wars are everywhere and always STUPID.  Nobody ever wins a trade war.  That doesn't mean you can't enforce fair trade policies.   But taxing your own consumers (during a depression) and destroying you own industry is certainly the dumbest way to do it.

The only thing worse would be to start another actual war with another super power like China.  Trump has said he knows the virus was started in a lab in Wuhan, something that all global science and intelligence rejects. He can't tell us how he knows this, he says.  Why is he saying this?  Sounds like laying the groundwork for war...

Got Gold?